Editor’s Note: Related tickers: Virgin Media Inc. (NASDAQ:VMED), Tiffany & Co. (NYSE:TIF), B/E Aerospace Inc (NASDAQ:BEAV), Anadarko Petroleum Corporation (NYSE:APC), Thermo Fisher Scientific Inc. (NYSE:TMO).
Several weeks after the end of each quarter, hedge funds and other notable investors submit their 13F filings to the SEC, disclosing to the public many of their long equity positions in U.S. stocks as of the end of the quarter. We track these filings in our database, allowing us to use the included information to develop investing strategies; we have found, for example, that the most popular small cap stocks among hedge funds generate an average excess return of 18 percentage points per year;learn more about imitating hedge funds’ small cap picks.
Investors can also look through 13Fs for stocks that top managers like, including those, which are new, compared to the previous filing and therefore could be taken as somewhat fresher picks. Here are the five largest positions by market value, which billionaire Dan Loeb’s Third Point;see the full filing on the SEC’s website,initiated between January and March of this year or see a history of the fund’s 13F filings:
Virgin Media Inc. (NASDAQ:VMED)
One of the fund’s largest holdings overall was its stake of 11 million shares in
Tiffany & Co. (NYSE:TIF)
The best of the rest
Third Point reported a position of 2 million shares in B/E Aerospace Inc (NASDAQ:BEAV), a $6.6 billion market cap provider of aircraft interior components such as seats and hospitality equipment. This stock is also priced for growth- specifically, it trades at 25 times trailing earnings- but business has been strong according to recent reports.
With Wall Street analysts expecting that trend to continue, B/E Aerospace Inc (NASDAQ:BEAV) carries a forward P/E of only 15 and a five-year PEG ratio of 0.8. We’re skeptical as to whether it is in fact a “growth at a reasonable price” stock, but it may be worth considering.
Loeb and his team bought 1.2 million shares of Anadarko Petroleum Corporation (NYSE:APC) during the first quarter of 2013. Earnings at the oil and gas company have been down- partly due, we’d imagine, to low natural gas prices which have stemmed from high supply- and while the sell-side is forecasting a recovery for Anadarko Petroleum Corporation (NYSE:APC) next year the forward earnings multiple of 17 isn’t that low compared to the company’s peers. We’d also note that at a beta of 2.4, Anadarko Petroleum Corporation (NYSE:APC)’s stock price tends to over exaggerate moves in broader market indices.
Rounding out our list of Third Point’s new stock picks is Thermo Fisher Scientific Inc. (NYSE:TMO). The medical instruments and diagnostics company has done well over the last year, with the stock rising by 70%. While this has been accompanied by rising earnings, quite a bit of the stock’s rally is in anticipation of future growth on the bottom line as shown by the trailing P/E of 26. Analysts are looking for improvements in earnings per share here, but we wouldn’t take those projections at face value as the core of an investment thesis.
Final Thoughts
It’s no secret that at Insider Monkey, we track the best picks of the best hedge funds. Looking at hedgies’ favorite equities via 13F filings is also a useful way to screen investment ideas, but further research should also be done. In Third Point’s equity portfolio, Thermo Fisher Scientific Inc. (NYSE:TMO) represents a nice healthcare-Obamacare play, Anadarko Petroleum Corporation (NYSE:APC) is a bet on natural gas’s bright future, B/E Aerospace Inc (NASDAQ:BEAV) is a bullish play in aerospace (jet propulsion is particularly strong at the moment), Tiffany & Co. (NYSE:TIF)’s future looks cloudy, but should materialize in an improving economy, and Virgin Media Inc. (NASDAQ:VMED) is a merg-arb strategy.
Disclosure: I own no shares of any stocks mentioned in this article.
