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 $3 Billion Hedge Fund Has Been 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.

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 the Eminence Capital hedge fund company, run by Ricky Sandler, who seeks  growing companies in growing industries and out-of-favor companies and industries. He also likes to short stocks, when he finds ones he expects will decline.

The company's reportable stock portfolio totaled $3.3 billion  in value as of Sept. 30, 2012.

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

The biggest new holdings are Vodafone (Nasdaq: VOD  ) and American International Group (NYSE: AIG  ) . U.K.-based telecom giant Vodafone offers a 4% dividend yield and has bulls excited about the projected growth of 4G technology and Vodafone's Smart II low-cost, mass-market smartphone. Others are wary of uncertainty and don't see the stock as a bargain. More pluses include its 45% interest in Verizon Wireless that has generated billions in cash and its entry into the promising mobile payments market.

American International Group ran into serious trouble in the recent credit crisis, to say the least, but it's been turning itself around, outperforming expectations for several quarters in a row. Its life insurance and property and casualty insurance businesses have been doing well. To some, it seems quite attractively priced lately, especially relative to peers. Indeed, its P/E ratio was recently below 3 , and its forward P/E of 10 is below the S&P 500 average.

Among holdings in which Eminence Capital increased its stake was business software specialist MicroStrategy (Nasdaq: MSTR  ) . Its stock has been whacked in recent months, following news of a management shake-up and a disappointing earnings report. On the plus side, revenue has been growing , though earnings are down over the past few years.

Eminence Capital reduced its stake in companies such as NXP Semiconductors NV (Nasdaq: NXPI  ) , which specializes in near-field communications (NFC) chips. Some of its chips help facilitate mobile payment systems, such as on Google's (Nasdaq: GOOG  ) Google Wallet service, while others aid digital video surveillance . Sales of mobile phones outfitted with NFC technology are expected to triple  this year, to 100 million. NXP does have competition, though, such as Skyworks Solutions (Nasdaq: SWKS  ) .

Finally, Eminence Capital's biggest closed position was Lam Research (Nasdaq: LRCX  ) . The semiconductor equipment maker has been posting lumpy  revenue and earnings numbers in recent years. Combined with Novellus now, though, it has laid out  plans to boost its market share in key markets over the coming three to five years, and expects to soon be realizing $100 million  annually in cost savings from its merger. Some worry, however, that it's dependent on too few customers. Its net income and free cash flow are down  in recent years, too.

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.

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: 2163111, ~/Articles/ArticleHandler.aspx, 10/25/2016 10:13:44 AM

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 18,223.65 0.62 0.00%
S&P 500 2,150.46 -0.87 -0.04%
NASD 5,307.04 -2.79 -0.05%

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

10/25/2016 9:58 AM
AIG $60.43 Up +0.11 +0.18%
American Internati… CAPS Rating: ***
GOOGL $833.71 Down -2.04 -0.24%
Alphabet (A shares… CAPS Rating: *****
LRCX $98.65 Down -0.33 -0.33%
Lam Research CAPS Rating: ***
MSTR $174.47 Up +0.43 +0.25%
MicroStrategy CAPS Rating: ***
NXPI $101.20 Down -0.64 -0.63%
NXP Semiconductors… CAPS Rating: ****
SWKS $78.62 Up +0.13 +0.17%
Skyworks Solutions CAPS Rating: ****
VOD $27.98 Up +0.31 +1.10%
Vodafone CAPS Rating: ****