Imitation is the best form of flattery, right? Well, when you're learning a new skill, imitation can also be a great way to hone your craft.
If you're learning guitar, you might pick up a book of Jimi Hendrix's licks or download the chords to a couple of Bob Dylan's songs. So when you're trying to become a better investor, it only makes sense to take a peek at what the professional investors are up to.
For the Fools who don't have the time or inclination to pick individual stocks on their own, Shannon Zimmerman at the Fool's Champion Funds newsletter has put together a buffet of mutual funds that have collectively outperformed their benchmarks by 13.9%. The rest of us can tune in directly to what some of the major funds are holding.
You see, the SEC requires institutional investment managers who manage $100 million or more to show their cards via quarterly 13-F filings. This week I've gone back to the well to pull up some of Goldman Sachs' (NYSE: GS ) positions, and, to make things even more interesting, I cross-referenced its holdings against what players in the Fool's CAPS community had to say about the stocks.
Below are five of Goldman's holdings that have also been highly rated by CAPS players.
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Percentage that Goldman owns
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CAPS Rating
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ZOLL Medical (:ZOLL)
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12.6%
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****
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Activision (NASDAQ:ATVI)
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11.2%
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****
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USEC (NYSE:USU)
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15.1%
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****
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Tessera Technologies (NASDAQ:TSRA)
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9.79%
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****
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EZCORP (NASDAQ:EZPW)
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10.6%
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****
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Source: SEC Filings, Yahoo! Finance, and CAPS as of Aug. 13.
Now before you jump to it and make any hasty moves, remember that we're looking at what Goldman has done in retrospect. For all we know, since the last 13-F filing, the firm has drastically reduced its holdings in any or all of the above stocks. With that in mind, here are some thoughts on a couple of these stocks to kick off further research.
Does Goldman have any gold?
With so many funds out there to cover, it might seem strange that I'd retread on Goldman after taking a look at them back in June. It might also seem strange, given the fact that Goldman has arguably not been investing like a pro lately -- it announced a $3 billion investment in its Global Equity Opportunities (GEO) hedge fund that is down somewhere over 30% and also disclosed that its massive Global Alpha fund is down around 27%.
In the press release for the new $3 billion investment, though, Goldman said that it "believe[s] the current values that the market is assigning to the assets underlying various funds represent a discount that is not supported by the fundamentals." In other words, it believes there are some opportunities ready to be reaped in its funds.
While it's tough to glean what specific opportunities Goldman is referring to, the list above includes some stocks that Goldman owns a significant percentage of and have been deemed likely outperformers by the CAPS community.
EZCORP, for example, is off about 35% from highs that it hit earlier in the year. The company, which runs a network of pawn shops and makes payday loans, has been steadily growing and is nicely profitable. At its current price, it's trading at just under 13 times expected fiscal 2007 earnings.
Darkgoody is one of the CAPS players who has rallied behind EZCORP and claims that it "is experiencing unprecedented growth and earnings will likely exceed guidance again this year."
USEC, another stock that Goldman owns a big chunk of, has had a similar drop from its highs of the year. The company provides low enriched uranium for nuclear power plants -- a hot area as power generation attempts to move away from a reliance on fossil fuels.
One CAPS All-Star, StockSpreadsheet, highlighted the company back at the beginning of July and said that he believes the stock could reach $110 in the next five years. In particular, he cited the fact that the company has been improving its debt-to-equity ratio and has averaged over 100%-earnings-per-share growth over the past three years.
Eager to read more commentary from the CAPS community on these Brown Investment-owned stocks? Hop on over to CAPS and start interacting with the other 60,000+ CAPS players. While you're checking out these stocks, you can also find out more about over 4,900 other stocks that are currently rated on CAPS.
More CAPS Foolishness:
Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. Activision is a Stock Advisor recommendation. The Fool's disclosure policy invests like a pro, but has been told that it plays ball like a girl.
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