5 Stocks Billionaire Ken Fisher Dumped Last Quarter

Warren Buffett's right-hand man and business partner, Charlie Munger, offers this advice for successful investing: "Carefully look at what other great investors have done." Luckily for us, great investors are required to divulge changes they make to their portfolios on a quarterly basis. These SEC 13-F filings allow us to peek into the stock comings and goings of money pros, including multibillion-dollar hedge fund manager Ken Fisher.

Let's take a closer look at investments Fisher gave pink slips to this past quarter. I zeroed in on a couple of stocks that Fisher completely sold out of and a few in which he reduced his position but still holds.

Dumped
Diamond Foods
(NASDAQ: DMND  ) was poised to acquire Pringles from Procter & Gamble last year but lost the brand to Kellogg. The deal would've added the popular potato-chip brand to Diamond's existing product lineup of Kettle Chips, Pop Secret, and Emerald Nuts. Ultimately, that deal fell though because of accounting problems, which had Diamond shifting payments to walnut growers into future quarters and falsely inflating profit margins. Diamond Foods' stock lost nearly 58% last year. Fisher probably saw the writing on the wall and took the loss for 2012.

Shares of PSS World Medical (UNKNOWN: PSSI.DL  ) skyrocketed in late October after it was announced that McKesson would acquire PSS in the first quarter of 2013 for nearly $1.5 billion. The all-cash deal values PSS at $29 per share. The 32% bump in PSS's share price (up to $28.57)  on Oct. 25 probably enticed Fisher to sell out of his stake in the company completely.

Dialed back
Several years ago, Las Vegas Sands (NYSE: LVS  ) doubled down on gaming properties in Macau, a bet that's paid off handsomely. But further slowing growth in China may impede progress. Las Vegas Sands is looking to expand in Spain, a country with widespread unemployment and an established gaming industry. Fisher sold nearly all of his Las Vegas Sands stock in the third quarter of 2012, but he dumped even more in the most recent quarter.

Fisher reduced his position in drug maker Celgene (NASDAQ: CELG  ) during the fourth quarter. Of course, that occurred before the company's announcement earlier this month that it projects sales to double in the next five years. Since that Jan. 7 announcement, its stock has rallied 16%. Despite projecting slowing sales for its Revlimid drug, Celgene claims a number of growth drivers for 2013 and beyond.

The hedge fund manager also dumped more than 80% of his stake in the nation's largest natural-foods supermarket chain, Whole Foods Market (NASDAQ: WFM  ) . The company intends to ramp up new store expansion, which slowed considerably through the economic downturn. And Whole Foods is benefiting from its exposure to higher-income households, as they've held up much better than lower-income consumers during the most recent recession.

Foolish bottom line
I don't own any of these stocks that Fisher sold. While I agree with Fisher's decision to sell Diamond Foods and Las Vegas Sands, I'm not so sure about Celgene and Whole Foods. As a patient and long-term investor, I think these two companies still hold a great deal of promise in their respective and highly profitable yet competitive health-care and organic-foods markets.

With Celgene's broad portfolio of drugs and a strong pipeline to boot, many investors see it as a smarter way to play the biotech investing game. While Celgene might be a safer stock than its small biotech brethren, investors need to know about the key opportunities and risks facing the company. We run through them all in The Motley Fool's brand-new premium report on Celgene. To claim your copy today, simply click here now.


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Comments from our Foolish Readers

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  • Report this Comment On January 26, 2013, at 10:56 AM, djstunt101 wrote:

    Just curious. If you a "patient and long term investor", why would you agree with the sell of LVS and holding of Whole Foods?

    LVS has a number of catalyst ahead of it, not to mention that the CEO just recently estimated that they see the Macau market possibly reaching 100 Billion up from what will most likely be a 44 Billion dollar market now.

    LVS just returned $3 ($2.75 plus regular .25) in dividends in December and with the dividend increased to $1.40 per share for 2013, it is yielding about 2.7%. The total $3 paid back in December was equal to a pay back of about 7% as the stock was trading in the mid 40's during the month of December. It is also about 15% from its 52 week high and well off its all time high, even allowing for the added shares outstanding. LVS is also trading at 20x 2013 estimates on what is estimated to be 20% growth so its carrying a peg ratio of 1x.

    It's off to a good start in 2013 as well, up 14% from its 12/31/12 close, compared to the S&P 500's return of 5.4%.

    WFM in contrast is within 5% of its 52 week high and all time high with a dividend yield of .80%. It's $2 special dividend in December amounted to a payback of a little over 2% as it looks like it traded around a $90 average price in December. It is also trading with a p/e of 33x 2013's estimates on what is estimated to be 18% eps growth, a higher peg ratio closer to 2x.

    So far in 2013, WFM is up 5%, slightly underperforming the S&P 500, but not enough to mention I suppose....only by less than a 1/2 pt.

    Who are we to second guess Ken Fisher, but as long as we're doing it, I would have done the opposite of your decision. I would have sold WFM and held and/or added to LVS as long as we were taking a long term and patient stance. LVS seems to be more fairly valued and with better upside as I think the global gaming market is bigger than the organic health food market. I also feel global gaming developers/operators are harder to find whereas the moat for organic food markets seems fairly low.

    Thanks! Hope my numbers are accurate, just glanced through them and did the proverbial "back of the envelope" calculating.

    FF

  • Report this Comment On January 26, 2013, at 12:18 PM, cp757 wrote:

    So you are telling your readers that Ken Fisher was smart to sell most of his Las Vegas Sands shares at 34.00 dollars a share and then the rest at 39.00 and now 90 days later the stock is at 52.00 ?

    I think you should have said "Ken Fisher, he won some and lost some".

    If you said he sold LVS at 60 dollars a share and bought at 36 and now the stock is 52 I would say he "Nailed the Trade".

    He Didn't.

    Las Vegas Sands gets 90% of its revenue from ASIA and that is the growth market. Las Vegas has the biggest casino in the biggest occupied building in the world on the Cotai Strip, The Venetian . Las Vegas Sands has the highest Mass Win Per Day in Macau. It increased 34.9% to $8.5 Million in 3Q12 – Highest in Macao Market.

    The next project to open is The Parisian Macau this will add to the 10,000 rooms they have now.

    Targeted completion date: First quarter 2016

    Total cost of project: ~$2.7 billion

    Hotel rooms and suites: 3,000 to 4,000

    Gaming capacity: ~450 table games and 2,500 slots and ETGs

    Additional amenities including retail mall, replica Eiffel Tower, MICE space, diverse food & beverage options and entertainment.

    Ken Fisher just moved out of a good investment and is now going to rationalize his decision. Its not the decision I made and I have enjoyed the dividend of 3.75 dollars a share that he missed. He sold and lost out on 75 million in dividends and a 280 million in share price. That's a 355 million dollar mistake.

    I guess its just money.

  • Report this Comment On January 26, 2013, at 12:34 PM, cp757 wrote:

    I thought he had more share than he did. He has half as many share so it was a 175 million dollar mistake and he lost on his position.

    Ken Fisher initiated holdings in Las Vegas Sands Corp.. His purchase prices were between $42.51 and $61.57, with an estimated average price of $51.09. The impact to his portfolio due to this purchase was 1.1%. His holdings were 8,970,744 shares as of 06/30/2012.

    Its all about timing.

  • Report this Comment On January 26, 2013, at 3:43 PM, BenKeel wrote:

    It's interesting to see Nicole Spaghetti mention "further slowing in China" when China's econ. numbers are the best they've seen in years.

    Manufacturing, productivity, PMI numbers are all up for about the last 5 months.

    C'mon Nicole, pick up a Wally J. from time to time.

  • Report this Comment On January 26, 2013, at 10:27 PM, xxatrm wrote:

    I wonder if this was written as a favor for the short players because you left out some importanf facts like:

    This is part an old article that was written about 4 months ago

    Ken Fisher bought LVS at an average price of about $52 and sold at an average price of about $42 for a huge loss

    Ken Fisher was selling LVS at a big loss as he was buying Apple at $600+ and higher, another loss

    Bottom line:

    Ken Fisher took big losses on LVS and is a big loser on Apple currently

    Don't take my word for it, check his buys and sells on LVS and buys on Apple

    Try doing some research and put all the facts in your articles, you may get some respect!

    For now your articles are suspect.

  • Report this Comment On January 27, 2013, at 1:07 PM, BenKeel wrote:

    It's interesting to see Nicole Spaghetti mention "further slowing in China" when China's econ. numbers are the best they've seen in years.

    Manufacturing, productivity, PMI numbers are all up for about the last 5 months.

    C'mon Nicole, pick up a Wally J. from time to time.

  • Report this Comment On January 27, 2013, at 10:07 PM, BenKeel wrote:

    Fisher did not "DUMP" his LVS position.

    He reduced it.

    Motley Fool is sssssoooooo appropriately named!

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