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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 SAC Capital Advisors, run by Steven Cohen. SAC is one of the biggest hedge fund companies around, with a reportable stock portfolio totaling $20.7 billion in value as of March 31, 2013. A company doesn't generally grow that large without performing well, and indeed, Cohen has reportedly averaged returns of roughly 30% annually over two decades.
The company has been in the news a lot lately, though, due to an insider-trading scandal. Cohen recently received a subpoena to testify before a grand jury, and is reportedly considering closing his operations to outside investors as part of a proposed deal. The statute of limitations on this case may bring things to a close by the end of July, so we can expect more clarity by then.
So what does SAC Capital's latest quarterly 13F filing tell us? Here are a few interesting details:
The biggest new holdings are Chesapeake Energy puts, and shares of Discovery Communications. Other new holdings of interest include Halcon Resources (NYSE: HK ) , and Thompson Creek Metals (NASDAQOTH: TCPTF ) . Oil and gas company Halcon, operating in the promising Bakken region, as well as Texas's productive Eagle Ford shale region, among others, is expected to grow by 30% annually over the coming years. It recently reported 2012 net daily production 128% higher than year-ago levels, and proven reserves up 417%. Halcon was recently one of my colleague Joel South's top two energy holdings, and analysts at Stifel recently upped its rating from Hold to Buy.
Thompson Creek Metals (NASDAQOTH: TCPTF ) has been challenged by low prices for its primary product, molybdenum, and a costly build-out of its Mt. Milligan copper and gold mine. The mine is due to open soon, and should be productive, helping diversify Thompson Creek's operations. Some maintain high hopes for the company's future.
Among holdings in which SAC Capital Advisors increased its stake was Atmel (UNKNOWN: ATML.DL ) SAC reduced its stake in companies such as PNC Financial Services, and Akamai Technologies. Atmel, which makes touchscreen controllers, is sitting near a 52-week high, despite posting shrinking revenue and earnings lately. The company is cutting costs to boost profit margins, and is optimistic, seeing improving business conditions and a healthier backlog.
Finally, SAC Capital's biggest closed positions included Coach and Dover. Other closed positions of interest include Exelixis (NASDAQ: EXEL ) and, also, Tronox Ltd. (NYSE: TROX ) . Biotech company Exelixis recently reported non-blowout early sales of its thyroid cancer drug, Cometriq. Some are waiting to see if the drug gets approved to treat prostate cancer, too, and the company is looking at treating as many as nine different conditions with it, such as bone tumors. On the other hand, Cometriq is expensive, and the company's debt has been growing, along with its share count.
Tronox is the world's largest fully integrated titanium dioxide producer, supplying paint companies, paper companies, and more. It emerged from bankruptcy in 2011 as a stronger company, and reinstituted its generous dividend in 2012, recently yielding 4.4%. Falling prices for titanium dioxide have hurt, but a recovering housing market will help. The company faces competition, but remains poised to benefit from an industry turnaround.
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. Therefore, 13-F forms can be great places to find intriguing candidates for our portfolios.
Energy investors would be hard-pressed to find another company trading at a deeper discount than Chesapeake Energy. Its share price depreciated after negative news surfaced concerning the company's management and spiraling debt picture. While the debt issues still persist, giant steps have been taken to help mitigate the problems. To learn more about Chesapeake and its enormous potential, you're invited to check out The Motley Fool's brand-new premium report on the company. Simply click here now to access your copy.