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 Maverick Capital, founded by Lee Ainslie and Sam Wyly in 1993. Avoiding bonds, commodities, currencies, and options, it sticks with stocks, holding both long and short positions. It employs fundamental analysis and examines management closely.
The company's reportable stock portfolio totaled $7.6 billion in value as of Sept. 30, 2012.
Interesting developments
So what does Maverick Capital's latest quarterly 13F filing tell us? Here are a few interesting details:
The biggest new holdings are Macy's (M 1.19%) and Express Scripts (ESRX). Other new holdings of interest include Las Vegas Sands (LVS 2.42%). The casino giant has been challenged by slowing growth in China (it's a major operator in Macau, the gambling Mecca) and now also by China's crackdown on gambling junkets. Some wonder whether the company is erring by not getting involved in online gambling. It recently announced a big special dividend, and my colleague Jeff Hwang thinks it might do well to buy regional casino company Ameristar Casinos (ASCA.DL).
Among holdings in which Maverick Capital increased its stake were Skyworks Solutions (SWKS 2.08%), Arcos Dorados Holdings (ARCO 0.55%), and SUPERVALU (SVU). Skyworks Solutions makes components for smartphones. The fact that it's inside iPhones has many very excited, but some worry that it's rather dependent on one key customer -- especially now that some expectations about Apple (AAPL 0.51%) have been ratcheted down. Others point out that it actually serves many other markets, such as the automotive, medical, avionics, military, and other manufacturers, too. It was recently downgraded by the folks at Zacks, due to shrinking margins and lowered guidance.
Arcos Dorados is the largest franchiser of McDonald's restaurants in the world, and is focused on Latin America. It has been growing briskly, but has been challenged by some regional economic policies. Down 42% over the past year, some see the stock as simply more of a bargain now. Bulls like its growth potential, relative paucity of competition, and significant short interest .
Supermarket chain SUPERVALU's stock has fallen even further, down nearly 70% over the past year. It's in a low-margin business to begin with, and revenue has been shrinking in recent years. The company suspended its dividend this year. Its cash has been declining while debt rises, and many are looking for it to be acquired. Of course, those who don't think the company is in deep trouble think it's now attractive.
Maverick Capital reduced its stake in lots of companies, including Tyco International (TYC), which has been busy reorganizing, shedding assets and businesses, and becoming a smaller and more focused company.
Finally, Maverick Capital's biggest closed positions included Schlumberger (SLB -0.68%) and Credicorp (BAP 1.34%). Other closed positions of interest include E-Commerce China Dangdang (DANG), frequently referred to (not very accurately) as a Chinese Amazon.com (AMZN 1.49%), though it's far smaller. It offers enormous potential, serving a huge and growing Chinese population, but growth in China seems to be slowing, and Dangdang does face some significant competition -- from Wal-Mart (WMT 1.02%), even. In its last quarter, it posted estimate-topping numbers and was rewarded with a stock-price bump, but then dropped on a strong report from competitors.
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.
