John Horseman, the manager of Horseman Capital Management, has high hopes for gold mining companies and is perhaps betting on a recovery of Gold. His fund’s latest 13F filing reveals the addition of several gold mining companies to its equity portfolio. Horseman is also betting big on financial stocks, having increased his fund’s stakes in a number of finance giants.
Financial Picks
During the previous quarter, Horseman has increased his fund’s investment in The Bank of New York Mellon Corporation (NYSE:BK) by a third, taking it to 875,300 shares valued at $30.8 million. Warren Buffett also holds a position in this company: 24.6 million shares reportedly worth in excess of $861 million. The company has a market cap of $37.8 billion and pays an annual dividend of $0.6 per share, which corresponds to a yield of 1.80%. The stock is traded at a trailing Price to Earnings (P/E) ratio of 19.xx, in line with industry average of 19.10. For the fourth quarter of 2013, Bank of New York Mellon announced $711 million in income before tax and earnings of $0.44 per share.
Another financial stock Horseman is betting big on is Goldman Sachs Group Inc (NYSE:GS), adding 18% and taking his position to 160,500 shares reportedly worth $26.3 million. Ken Griffin, the billionaire hedge fund manager, is particularly bullish on this stock, having made a significant addition to his fund’s position during the fourth quarter of 2013. The stock has a market cap of $70.3 billion and is traded at a trailing P/E ratio of 10.xx, only half the industry average of 19.40. Goldman Sachs also pays an annual dividend of $2.10, which yields 1.4%. 2013 fourth quarter brought revenues of $10.3 billion and $5.36 in earnings per share.
In contrast to the moves above, Horseman Capital has revealed a small reduction in its holding of Wells Fargo & Co (NYSE:WFC), another stock held by Warren Buffett as well. The banking giant has a market cap of $257 billion and pays an annual dividend of $1.2 per share making for an yield of 2.5%. So far this year, the stock has appreciated by 8% to a current price of $48.85 per share and is traded at a trailing P/E ratio of 12.xx. Wells Fargo has posted $20 billion in income before tax and earnings of $1.05 per share for the first quarter of 2014. Second quarter is expected to bring revenues of $20.8 billion and earnings per share of $1.01.
Gold Mining
Through the acquisition of 529,600 shares valued at $12.4 million, Horseman made Newmont Mining Corp (NYSE:NEM) his biggest new position during the first quarter of 2014. The company has a market cap of $11.9 billion and pays an annual dividend of $0.95, which represents a yield of 3.1%. The stock has been in a downtrend since November 2011 and has possibly bottomed in January 2014, as it has been trending sideways since then. The company reported revenues of $2.16 billion and earnings of $0.49 per share for the three months ending December 31, 2013. The subsequent quarter is expected to bring $1.85 billion in revenues and earnings per share of $0.19.
Next up is IAMGOLD Corp (USA) (NYSE:IAG), a Canadian mining company. Horseman acquired 3.26 million shares valued at $11.5 million. John Paulson also holds a significant position in this stock: 3.86 million shares worth $12.8 million according to his fund’s latest 13F filing. The company has a market cap of $1.31 billion and does not pay a dividend. It posted revenues of $247 million and a loss of $0.71 per share, for the 2013 fourth quarter. Analysts estimate revenues of $286 million and earnings of $0.02 per share for the first quarter of 2014. The stock is touted mainly as a ‘Hold’.
Harmony Gold Mining Co. (ADR) (NYSE:HMY) is also a notable addition, with Horseman Capital reporting a stake comprising 3.18 million shares worth approximately $9.71 million. Based in South Africa, this company has a market cap of $1.34 billion and does not pay a dividend. So far this year, the stock has advanced 19% to a current price of $3.09 per share. For the three months ending December 31, 2013, Harmony Gold posted $402 million in revenues, a 24% year-over-year decrease, and a loss per share of $0.02. The stock is recommended as a Strong Buy and has a mean price target of $4.05.
Disclosure: none.
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