The most comprehensive picture of activity by hedge funds and other notable investors comes in the form of quarterly 13F filings, and we’ve found that tracking these picks can be useful in developing investment strategies; for example, the most popular small cap stocks among hedge funds generate an average excess return of 18 percentage points per year (learn more about our small cap strategy). Since the information in 13Fs is a bit old, however, some investors prefer to track 13D and 13G filings, which are filed with regard to individual stocks shortly after a fund takes a 5% ownership stake or makes changes to that position. These names can then be reviewed for interesting ideas for further research. Here are five stocks which the filers we track have bought recently:
Warren Buffett’s Berkshire Hathaway has continued to buy shares of DaVita HealthCare Partners Inc (NYSE:DVA), which provides kidney dialysis services at dialysis centers and in hospitals; its most recent purchases have given it a total close to 16 million shares (check out Buffett’s stock picks). When we looked at the company we saw that it was increasing its own revenue nicely even aside from its recent merger with Health Care Partners, with pretax income growing almost 40% in its last quarterly report compared to the first quarter of 2012 if we add back a loss contingency reserve. Some of that is from the merger of course, but DaVita HealthCare Partners Inc (NYSE:DVA) appears to be growing nicely in any case.
Steadfast Capital Management, managed by Robert Pitts and his team, reported a position of over 19 million shares in Chinese chatting platform company YY Inc (ADR) (NASDAQ:YY), giving it over 10% ownership. Find Steadfast’s favorite stocks. Revenue more than doubled in the first quarter of 2013 versus a year earlier, and net income increased strongly as well. The stock carries trailing and forward earnings multiples of 47 and 31, respectively, so markets are already expecting high growth in the business. Even with its impressive numbers, then, we would avoid YY Inc (ADR) (NASDAQ:YY) at least for now.
Mohnish Pabrai’s Dalal Street has more than doubled its holdings in HORSEHEAD HOLDING CORP. (NASDAQ:ZINC) since the end of March, to 4.6 million shares or about 10% of the company (research more stocks Pabrai likes). As might be divined from its ticker symbol, HORSEHEAD HOLDING CORP. (NASDAQ:ZINC) is a miner of zinc and producer of zinc oxide. The stock’s beta is 2.0, as zinc prices partially depend on macro activity. Recent reports have shown fairly low earnings numbers compared to the valuation, though Wall Street analysts expect the company to rebound and as a result the forward P/E is only 13.
Our database of filings has Kenneth Garschina’s Mason Capital Management disclosing ownership of about 14 million shares- 5.3%- of Health Management Associates Inc (NYSE:HMA). Health Management Associates Inc (NYSE:HMA) is a $4 billion market cap hospital company primarily operating in the southern half of the United States. Recent reports show a small decline in revenue, with earnings falling as well. The sell-side is looking for financials to improve here as well, and as a result the stock trades at 15 times forward earnings estimates, though given the company’s struggles we might prefer to look at other hospitals.
Disclosure: I own no shares of any stocks mentioned in this article.
