Here's What This $3 Billion Market Wizard Has Been Buying

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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 Tudor Investment, founded in 1980 by Paul Tudor Jones and featuring the flagship Tudor BVI fund. Jones, featured in Jack Schwager's Market Wizards: Interviews with Top Traders, was one of the few to foresee the 1987 market crash (and he made many millions on it as well). He’s known for focusing on short-term trading, equity, venture capital, debt, currency, and commodity markets.

The company's reportable stock portfolio totaled $3.1 billion in value as of Dec. 31, 2012.

Interesting developments
So what does Tudor Investment’s latest quarterly 13F filing tell us? Here are a few interesting details:

The biggest new holdings are Lowe’s and the SPDR Select Financial Sector ETF. Other new holdings of interest include Pitney-Bowes (NYSE: PBI  ) and the iShares S&P U.S. Preferred Stock ETF (NYSEMKT: PFF  ) . Despite what many people might think, Pitney-Bowes is not just a postage-meter business. It is indeed in that business, which has been threatened by the growth of digital communications, but it’s also involved in other less-threatened and higher-margin businesses, such as providing geocoding software to Facebook and others. Its fourth-quarter results were stronger than expected, but though its single-digit P/E ratio may be enticing, it does carry some risks and considerable debt and its hefty 10% dividend may end up reduced. The stock is also heavily shorted.

The iShares ETF is appealing for its dividend yield of about 6%, and it’s a good way to diversify your portfolio by adding preferred stocks, which tend to yield more while offering less share-price appreciation. The ETF is heavily weighted in financial stocks, with about two-thirds of its assets in them, but those stocks have been rebounding since the credit crisis of several years ago.

Among holdings in which Tudor Investment increased its stake was semiconductor chip designer Cirrus Logic (NASDAQ: CRUS  ) , which has been growing briskly in large part due to having its chips in almost every iProduct. The company has handily topped earnings estimates and has offered robust projections as well. On top of that, with a P/E ratio around 10, it seems attractively priced. Still, it’s quite dependent on Apple, so if you’re not confident about Apple’s future, think twice about Cirrus, too.

Tudor Investment reduced its stake in lots of companies, including Keryx Biopharmaceuticals (NASDAQ: KERX  ) , which offered disappointing trial results a year or so ago for its experimental colorectal cancer drug perifosine, but more recently announced very promising results for its Zerenex treatment for complications due to end-stage renal disease. That boosted the stock, which later slumped on news of a secondary stock offering to raise funds. Bears worry that there are not a lot of other contenders in the company’s pipeline and wonder if Zerenex will be able to fend off competition. The company believes that the growing market of dialysis providers may welcome Zerenex as a way to lower costs.

Finally, Tudor Investment’s biggest closed positions included the PowerShares KBW Bank Portfolio ETF and SPDR Select Energy Sector ETF. Other closed positions of interest include RF Micro Devices (UNKNOWN: RFMD.DL  ) , which specializes in radio-frequency (RF) components and semiconductors. Like Cirrus Logic, it has been benefiting handsomely from being a component supplier for iDevices (and lower-end phones). Bulls are hopeful that it will do a lot of business in China, where smartphones and upgrades of phones are strong sellers. Some analysts are also expecting a rebound in global semiconductor demand, which bodes well for the company, and smartphones are increasingly employing more RF technology. Still, it faces serious competition, including from deep-pocketed Qualcomm.

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.

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9/23/2016 4:00 PM
CRUS $52.39 Down -2.83 -5.12%
Cirrus Logic CAPS Rating: ****
KERX $5.25 Up +0.08 +1.55%
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PBI $17.77 Down -0.05 -0.28%
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PFF $39.83 Up +0.02 +0.05%
iShares S and P U.… CAPS Rating: ***
RFMD.DL $0.00 Down +0.00 +0.00%
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