Looking at 13F filings is important because they reveal hedge funds’ quarterly moves, and most crucially, their favorite equity investments. Institutional investors who exercise investment discretion of more than $100 million are required to report their positions in 13Fs several weeks after the end of each quarter. David Harding’s Winton Capital Management is one of the funds that recently filed its 13F form with the Securities and Exchange Commission (SEC). In this story we will walk you through five most valuable holdings in its equity portfolio. Highlights from the list are: Kimberly Clark Corp (NYSE:KMB), McCormick & Company, Incorporated (NYSE:MKC), and DTE Energy Co (NYSE:DTE).
We’re analyzing Harding’s top five holdings because quantitative studies have shown that it can benefit average investors by watching hedge fund sentiment. It has been possible for piggybackers to outperform Mr. Market by an average of 18 percentage points each year over the long term.
Numero uno
David Harding’s fund has increased its position in Kimberly Clark Corp (NYSE:KMB) to 594,564 shares at the end of March, from 412,080 shares at the end of 2012. In this way, the value of the stake grew to $58.3 million, from $34.8 million at the end of last year. Kimberly Clark Corp (NYSE:KMB) posted strong net sales of $5.3 billion in the first quarter of 2013, which represents an annual increase of 1%.
Adjusted earnings per share totalled $1.36 at the end of March, versus $1.18 a year earlier. Kimberly Clark Corp (NYSE:KMB) also said that it anticipates adjusted EPS of between $5.60 to $5.75 in 2013; the previous target was between $5.50 and $5.65 per share. According to our database, 20 of the 450 hedge funds we track were long in Kimberly Clark Corp (NYSE:KMB) heading into 2013, 5th highest in its 16-stock industry.
The best of the rest
Another jump in Winton’s portfolio was experienced by McCormick & Company Incorporated (NYSE:MKC). The fund’s stake in the company increased by 204,743 to 674,986 shares, the value of the holding being almost $49.7 million. According to our database, Winton Capital has the largest stake in McCormick of the hedge funds we track. In a statement, McCormick & Company Incorporated (NYSE:MKC) announced that its net sales advanced by an annual rate of 3% to $934 million in the first quarter of 2013. The company posted an EPS of $0.57, compared to $0.55 in the first quarter of 2012. Also, McCormick & Company Incorporated (NYSE:MKC) said that it reaffirmed its outlook for a 3-5% growth in sales for 2013, and EPS of between $3.15 to $3.23 for the whole year.
The position of DTE Energy Co (NYSE:DTE) also advanced. In its most recent 13F, Winton Capital reported owning 694,453 shares of DTE Energy Co (NYSE:DTE), compared to 496,537 shares in the previous filing. The current value of the stake is $47.5 million. DTE Energy Co (NYSE:DTE) posted earnings of $234 million in the first quarter of 2013, or $1.34 per diluted share, against $156 million in 2012. According to our database, 15 hedge funds aside from Winton Capital Management held shares of DTE Energy Co (NYSE:DTE). The year-to-date return of DTE Energy Co (NYSE:DTE)’s stock is 20.55%.
The fourth most valuable equity holding in Winton Capital Management’s portfolio is Verizon Communications Inc. (NYSE:VZ). Even though the fund has decreased the number of shares it held in the company by 22,009 shares to 937,669, the value of the stake is higher at $46.1 million, against $41.5 million declared in the previous filing. Verizon Communications Inc. (NYSE:VZ) is keeping in touch with the current trend to invest in green energy, announcing that it will spend $100 million for a solar and fuel-cell energy project that will help power 19 of its facilities in the country. For the first three months of 2013, Verizon Communications Inc. (NYSE:VZ) posted a net income of $4.9 billion which is 24.3% higher than a year ago. The telecom’s basic earnings per common share totaled $0.68 in the first quarter of 2013, compared to $0.59 posted a year ago.
Last but not least is Amgen, Inc. (NASDAQ:AMGN).
David Harding’s fund has almost doubled its stake in the company which now represents 441,313 shares, versus 249,820 shares at the end of December. The current value of the stake is about $45.2 million. For the first 2013 quarter, Amgen, Inc. (NASDAQ:AMGN) posted revenue of $4.2 billion, which represents a 5% increase year-on-year. Adjusted earnings per share figures for Amgen, Inc. (NASDAQ:AMGN) are impressive, and have advanced by an annual rate of 22% to $1.96 over the past year.
Final Thoughts
Even the top five picks in Winton Capital’s equity portfolio show a diverse range of companies from different industries and fields. David Harding’s conviction in these stocks is even more impressive when considering the fact that his fund has over 400 positions in its 13F filing. This is a bit broader net than what’s casted by many of the hedgies we track, but it’s important to note that Harding has over $30 million invested in each of the aforementioned companies. This may be a bit more than you’d like to invest, but it’s always important to pay attention to hedge fund sentiment.
Disclosure: none
