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 Farallon Capital Management, founded by Thomas Steyer in 1986, and employing a bottom-up fundamental investing strategy.
The company's reportable stock portfolio totaled $3.6 billion in value as of Sept. 30, 2012.
So what does Farallon's latest quarterly 13F filing tell us? Here are a few interesting details:
The biggest new holdings are Nexen (NYSE: NXY ) and Shaw Group (NYSE: SHAW ) . Shaw has been bought by another new holding, Chicago Bridge & Iron (NYSE: CBI ) , which, among other activities, provides services to the energy and natural resources sectors, working on projects related to water, hydrocarbon, and nuclear industries. The purchase has some worried about additional debt, and others not happy about Shaw's nuclear energy operations. A plus, though, is Shaw's big backlog.
Among holdings in which Farallon increased its stake were priceline.com (Nasdaq: PCLN ) and Qualcomm (Nasdaq: QCOM ) . Priceline has been experiencing strong growth internationally, with growth in Asia and the U.S. making up for weakness in Europe. The stock has been a big winner for many Motley Fool Stock Advisor investors. Some think it has risen too quickly, though, while others think it has plenty of room to run, liking its fat profit margins and growth rates of more than 25% for both revenue and earnings.
Qualcomm is supplying many millions of iDevices and Android devices with its LTE chip technology. It has been broadening its line of S4 Snapdragon processors for smartphones, but shares took a hit recently, on reports that Apple (Nasdaq: AAPL ) is cutting back on orders for iPhone 5 components. Two promising moves by the company are its push into emerging markets and display technology.
Farallon reduced its stake in lots of companies, including Merrimack Pharmaceuticals (Nasdaq: MACK ) , which is developing a treatment for metastatic pancreatic cancer that's also being tested against other cancers. Like many biotechs, though, Merrimack is burning through cash as it nears an FDA decision. If approved, Merrimack's drug will be a big deal , as there's a big need for effective drugs to fight pancreatic cancer.
Finally, Farallon's biggest closed positions included Goodrich (bought by United Technologies (NYSE: UTX ) ) and Target (NYSE: TGT ) . Other closed positions of interest include Dole Food (NYSE: DOLE ) . Saddled with debt, Dole recently posted disappointing revenue and earnings numbers, and is selling off its worldwide packaged foods and Asia fresh businesses to raise money. It will now be focusing more on fresh fruits and vegetables. Insider selling has been another concern with the company.
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.