Here's What This Market Wizard Has Been Buying

Every quarter, many money managers have to disclose what they've bought and sold, via "13F" filings. Their latest moves can shine a bright light on smart stock picks.

Today, let's look at Tudor Investment, founded in 1980 by Paul Tudor Jones and featuring the flagship Tudor BVI fund. Jones, featured in Jack Schwager's Market Wizards : Interviews with Top Traders, was one of the few to foresee  the 1987 market crash (and he made many millions on it, too). He's known for focusing  on short-term trading, equity, venture capital, debt, currency, and commodity markets.

The company's reportable stock portfolio totaled $1.9 billion  in value as of Sept. 30, 2012.

Interesting developments
So what does Tudor Investment's latest quarterly 13F filing tell us? Here are a few interesting details:

The biggest new holdings are exchange-traded funds (ETFs) focused on the financial and energy sectors -- the PowerShares KBW Bank ETF (NYSE: KBWB  ) and the SPDR Select Sector Energy ETF (NYSE: XLE  ) . Other new holdings of interest include wireless chip maker RF Micro Devices (Nasdaq: RFMD  ) and Western Asset Mortgage Capital (NYSE: WMC  ) .

RF Micro Devices posted estimate-beating numbers in its second quarter and offered very upbeat projections for its next quarter. Bulls are hopeful about it doing a lot of business in China, where smartphones and upgrades of phones are selling briskly. Western Asset is a real estate investment trust (REIT) that pays out most of its earnings in dividends -- and it has recently been yielding more than 16%. The company focuses on mortgage-related investments, and invests in both agency- and non-agency-backed ones, upping its risk profile some in exchange for the chance of higher returns. It doesn't hurt that a director recently bought  some $300,000 worth of shares.

Among holdings in which Tudor Investment increased its stake was NVIDIA (Nasdaq: NVDA  ) . With Texas Instruments (Nasdaq: TXN  ) bowing out recently, NVIDIA becomes the second-largest mobile-application processor company. Some have questioned whether its new cloud technology will eat away at its main bread and butter. It may be the right strategy, though, and in the meantime, NVIDIA should benefit from expected growth of roughly 36% for global smartphones over the coming years. Its strong balance sheet and solid cash-flow generation  are pluses, and its valuation, with a forward P/E ratio of 11, is attractive as well.

Tudor Investment reduced its stake in lots of companies, including wireless broadband provider Clearwire (Nasdaq: CLWR  ) , which recently jumped on speculation that it might be acquired. The company carries a lot of debt (recently more than $4 billion ) and is looking to sell some of its spectrum to help pay that down. A surging  share count is another worry, as it dilutes the value of existing shares. On the plus side, though, Clearwire is making sure its new LTE standards are compatible with offerings in China. 

Finally, Tudor Investment's biggest closed positions were ETFs -- the SPDR S&P 500 ETF (NYSE: SPY  ) and SPDR Select Sector Consumer Staples ETF (NYSE: XLP  ) . Other closed positions of interest include Micron Technology (Nasdaq: MU  ) , which has recently gone from making money to losing it. The company has bought a troubled rival that supplies iDevices, and appears undervalued. Bears worry about share dilution and those losses, though.

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.


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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.

  • Report this Comment On December 10, 2012, at 11:27 PM, MattC69 wrote:

    Selena, Selena, Selena...

    It seems you have just cut and pasted from your December 01, 2012 effort in relation to your "analysis" of CLWR, because you have made the same mistake I pointed out to you in that regard, in my December 03, 2012 Comment. I'll post it again here:

    "Clearwire... The company's surging share count is worrisome, though, as it dilutes the value of existing shares..."

    I would be grateful if you would please back this statement up with some facts. As I understand it, the equity offering of earlier this year was canned nearly 6 months ago. So I'm very interested to hear how "the company's surging share count" is occuring as I am likely one of those to be affeted "as it (CLWR) dilutes the value of existing shares..."

    So please, avail us all of this new information, which appears to lack any filing with SEC as its basis... Thanks!"

    You blogs are sloppy, lazy and devoid of research and even cursory fact-checking... I'm glad at least MF will accept your work, coz no publisher with an once of credibility would. Just sayin... ABOOSH!!

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