Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Here's What This "Best Investor" Is Buying

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

At The Motley Fool, we understand that it often pays to zig when Wall Street zags, but that doesn't mean that we don't pay attention to what leading fund managers are buying and selling. And funds that aren't always in lockstep with the broader market can be a particularly valuable source of insight.

Every quarter, fund managers overseeing more than $100 million must disclose their quarter-end holdings publicly by filing Securities and Exchange Commission Form 13-F. The form lists all U.S.-traded securities the manager held at the end of the quarter. Although the form doesn't disclose the manager's short positions or the manager's intraquarter trades, it can shine a bright light on his or her "long" stock bets. To help us make use of 13-F data, we turned to Motley Fool partner AlphaClone, a research and investment-management firm that tracks hedge fund public disclosures and develops investment strategies based on them.

Q2 2011 update
Former Fool writer Whitney Tilson joined Glenn Tongue to found T2 Partners in 2004. Tilson has been dubbed "the best investor you never heard of" and is known for his contrarianism, his dedication to value investing, and his respect for Warren Buffett and Charlie Munger.

Why should you care about T2 Partners' moves? While its performance has been volatile, its managers have posted some strong numbers in the past. If you believe in the power of contrarian plays and value investing, they stand a good chance of doing so again. The T2 Accredited Fund has posted returns of 122% since inception, versus 24% for the S&P 500.

The total market value of T2 Partners' disclosed equity holdings as of June 30, 2011 -- the latest quarter for which data is available -- was $243 million across 82 holdings. The fund company's 10 largest positions and associated changes in number of shares held as of June 30, 2011 were:

Knobias (Nasdaq: KBAS  )  -- increased 42.1%.
Seagate Technology (Nasdaq: STX  )  -- reduced 4.3%.
Grupo Prisa (NYSE: PRIS-B  )  -- new.
Berkshire Hathaway (NYSE: BRK-B  )  -- increased 0.8%.
Microsoft (Nasdaq: MSFT  )  -- reduced 24.2%.
Howard Hughes (NYSE: HHC  )  -- increased 49.6%.
CIT Group (NYSE: CIT  )  -- reduced 26%.
General Growth Properties (NYSE: GGP  )  -- reduced 26.7%.
Iridium Communications (Nasdaq: IRDM  )  -- reduced 30.6%.
BP (NYSE: BP  )  -- reduced 11%.

During the quarter, T2 Partners also increased its position in Blue Coat Systems and Himax Technologies (Nasdaq: HIMX  ) , among others. Among the stocks that it reduced its exposure to were American Express and Yahoo! Also, T2 Partners sold out of 13 stocks entirely, including LabCorp and Best Buy.

Himax Technologies has slid sharply in recent months, reducing its dividend along the way. Still, the chip maker has been diversifying its revenue stream and is bullish on the future for its image sensors and smartphone displays.

Selected Q2 2011 commentary
T2 Partners has more than 27% of its assets in technology companies, up sharply from 7% just a few quarters ago. Services have been pared from 34% to 26%, while energy holdings have shrunk from 16% to 4%. Lots of big-name technology companies were looking tantalizingly undervalued during the quarter (and many still are).

Here's where the firm is winning, losing, and making new bets:

Recent winner
Dell was a big winner for the company in the second quarter, rising 15%. After struggling for many years, the company seems to have turned the corner, and it stands to gain from Hewlett-Packard's exit from the PC business. While its revenue growth isn't huge, profit margins are growing. The company has earned two stars out of five from Motley Fool CAPS.

Recent loser
Berkshire Hathaway didn't do as well, dropping 7% in the quarter. Its reputation took a bit of a hit when now-departed manager David Sokol was accused of improper behavior. Even more upsettingly, Sokol was a key contender to succeed Buffett. Still, there's a lot to like about the company, especially at recent levels. For example, it has a huge cash hoard that it can deploy quickly to take advantage of opportunities. The company has a strong five-star rating in Motley Fool CAPS.

New bets
The biggest name among the new additions is Xerox (NYSE: XRX  ) . With a four-star rating in the Motley Fool CAPS community, it's a slow grower, but it pays a respectable dividend and generates plenty of cash. The company has plenty of naysayers, but that just makes it a classic kind of contrarian T2 investment.

During the quarter, the company also started new positions in Activision Blizzard, Pep Boys, and Nelnet.

We should never blindly copy any investor's moves, no matter how talented the investor. But it can be useful to keep an eye on what smart folks are doing. 13-F forms can be great places to find intriguing candidates for our portfolios.

Have any thoughts on this fund company or its holdings? Leave a comment below!

Longtime Fool contributor Selena Maranjian owns shares of Microsoft and Activision Blizzard, but she holds no other position in any company mentioned. Click here to see her holdings and a short bio. The Motley Fool owns shares of Yahoo, Microsoft, Activision Blizzard, Best Buy, Howard Hughes, Iridium Communications, and Berkshire Hathaway, and has written covered calls on Activision Blizzard. Motley Fool newsletter services have recommended buying shares of LabCorp, Activision Blizzard, Microsoft, Yahoo, and Berkshire Hathaway, creating a synthetic long position in Activision Blizzard, and creating a bull call spread position in Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1552461, ~/Articles/ArticleHandler.aspx, 10/28/2016 12:41:04 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,245.55 75.87 0.42%
S&P 500 2,139.91 6.87 0.32%
NASD 5,229.42 13.44 0.26%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/28/2016 12:25 PM
BP $35.82 Down -0.18 -0.50%
BP CAPS Rating: ****
BRK-B $144.94 Up +0.49 +0.34%
Berkshire Hathaway… CAPS Rating: *****
CIT $36.34 Down -0.12 -0.33%
CIT Group CAPS Rating: ***
GGP $24.99 Up +0.36 +1.46%
General Growth Pro… CAPS Rating: **
HHC $107.47 Up +0.41 +0.38%
Howard Hughes CAPS Rating: *****
HIMX $8.07 Up +0.06 +0.78%
Himax Technologies CAPS Rating: ***
IRDM $8.00 Down +0.00 +0.00%
Iridium Communicat… CAPS Rating: *****