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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 investing giant Graham Capital Management, founded in 1994 by Ken Tropin and in the multistrategy macro-oriented hedge fund business. The overall company manages investments for endowments, foundations, sovereign wealth funds, global pensions, investment advisors, and wealthy individuals, among others.
The company's reportable stock portfolio totaled $1.3 billion in value as of Sept. 30, 2012.
So what does Graham Capital's latest quarterly 13F filing tell us? Here are a few interesting details.
The biggest new holdings are the PowerShares Dynamic Industrials ETF (NYSEMKT: PRN ) and calls on the Market Vectors Gold Miners ETF (NYSEMKT: GDX ) . Other new holdings of interest include Dendreon (NASDAQOTH: DNDNQ ) and Turquoise Hill Resources (NYSE: TRQ ) . Most investors in Dendreon, maker of expensive prostate-cancer drug Provenge, have lost a lot of money. But expectations may now be so low that the company could perform well from here -- though it's burning through a lot of cash, too. The company is raising some money by selling a U.S. facility to Novartis (NYSE: NVS ) , and some are watching to see whether Dendreon will get acquired in the near future. Meanwhile, my colleague Brenton Flynn found some interesting details about it in its financial statements.
Turquoise Hill is majority-owned by U.K.-based mining giant Rio Tinto (NYSE: RIO ) and focuses primarily on mineral mining in central Asia and Australia. Its Oyu Tolgoi mine in Mongolia, which was 96% completed at the end of last quarter, is set to become one of the world's largest copper producers. The $7 billion company used to go by another name, Ivanhoe Mines, and its stock is down about 60% over the past year, making it more attractive to its fans. A potential problem has recently arisen, though, in the form of an alleged financial scandal in Mongolia -- interested investors should learn more before investing.
Among holdings in which Graham Capital increased its stake was Marvell Technology (NASDAQ: MRVL ) . The company's stock seems cheap these days, with the company whacked by weak PC sales. But its partnership with LED specialist Cree (NASDAQ: CREE ) to produce a dimmable LED bulb is promising, as is its potential to profit from the growth of cloud computing. Skeptics would like to see it profit more from the spread of smartphones. Its presence in Microsoft's (NASDAQ: MSFT ) Surface tablets is promising, but it remains to be seen how successful the Surface will ultimately be. In the meantime, there's a new dividend, recently yielding nearly 3%, as well as stock repurchases.
Graham Capital reduced its stake in lots of companies, including France Telecom (NYSE: ORAN ) , which has long sported a hefty dividend yield, though that payout has been shrinking in recent years instead of growing. Part of the problem is the company's focus on Europe, which is a saturated and troubled market. It is expanding elsewhere, though, such as in sub-Saharan Africa, where its majority-owned Orange division's mobile service has been growing well. Bears don't like France Telecom's hefty debt load, but bulls like its dividend, its cash flow, and its growth potential, especially in emerging markets.
Finally, Graham Capital's biggest closed positions included puts on the iShares Silver Trust ETF (NYSEMKT: SLV ) . Other closed positions of interest include Synta Pharmaceuticals (NASDAQ: SNTA.DL ) . Synta is up nearly 90% over the past year, despite some seeing it with a "poor development track record." Bulls like recent insider and big-investor buying and are hopeful about phase 3 trial results for its cancer drug, ganetespib. There's a lot of potential here, but little is certain until some Synta drugs receive approval and sell well.
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. 13F forms can be great places to find intriguing candidates for our portfolios.
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