Here's What This $60 Billion Manager Has Been Buying

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

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 Barrow, Hanley, Mewhinney & Strauss, founded in 1979, and one of the biggest value-focused institutional investment companies around. According to the folks at, over the 15 years ending in 2012, Barrow, Hanley racked up a cumulative gain of 143%, compared with just 94% for the S&P 500. Its massive large-cap value equity fund trailed the S&P 500 over the past year, but beat it over the past decade.

The company aims to invest via portfolios that maintain below-average price-to-earnings (P/E) ratios, below-average price-to-book ratios, and above-market-average dividend yields. It also tends to focus on large-cap companies.

The company's reportable stock portfolio totaled $59.5 billion in value as of June 30, 2013.

Interesting developments
So what does Barrow, Hanley's latest quarterly 13F filing tell us? Here are a few interesting details:

The biggest new holdings are General Dynamics and First Niagara Financial (NASDAQ: FNFG  ) . Other new holdings of interest include Photronics (NASDAQ: PLAB  ) . First Niagara, yielding 3.2%, has more than tripled its asset base since the financial crisis, though it has significantly increased its share count to do so. Meanwhile, it has been managing its credit risk well, which is kind of important for a banking enterprise. And when interest rates rise, as they should eventually do, First Niagara will benefit.

Photronics, specializing in photomasks that are used in the semiconductor industry, got whacked after posting disappointing results for its second quarter. Its third quarter was better, meeting earnings expectations and exceeding revenue estimates. Management pointed out a delay in designing new products -- for kind of good reasons: "Our customers extended manufacturing of current chips creating a pause in demand for new photomasks. We expect new design in memory to start up again during the current year."

Among holdings in which Barrow, Hanley increased its stake were Occidental Petroleum (NYSE: OXY  ) and Emerson Electric (NYSE: EMR  ) . Occidental recently reported a rather flat second quarter, and some have been waiting for the company to break itself up. The company has been improving its performance on several measures lately, though, such as revenue and earnings growth. Dividend growth has also been solid. On the negative side, profit margins have shrunk, while debt has grown. For patient investors, the stock offers a 2.9% yield. Bulls expect production growth from its mature oil assets.

Emerson Electric, recently yielding 2.7%, has been benefiting from its expansions abroad, in regions that are growing more rapidly than the U.S. Still, its last quarter  featured revenue down about 2%, and management tempering expectations. Earnings came in below estimates. Management noted weak government spending, but some stabilization in Europe. Emerson is selling much of its computing and power business to Platinum Equity.

Barrow, Hanley reduced its stake in lots of companies, including Sysco (NYSE: SYY  ) . Sysco is a giant in food delivery to restaurants and other institutions, and recently yielded 3.5%. It recently reported quarterly revenue up 5%, but earnings down 8.5%. On the plus side, management announced a 20-million-share buyback plan. Sysco has won some military contracts, and has generally weathered recent years with our weak economy, but it does face competition. A significant ray of hope is Sysco's international expansion.

Finally, Barrow, Hanley's biggest closed positions included Duff & Phelps and Cognex. Other closed positions of interest include Gentex.

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.

If you'd like another stock idea from another smart investor, The Motley Fool's chief investment officer has selected his No. 1 stock for this year, and you can learn all about it in the special free report: "The Motley Fool's Top Stock for 2013." Just click here to access the report and find out the name of this under-the-radar company.

Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2625107, ~/Articles/ArticleHandler.aspx, 10/1/2016 12:09:15 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 14 hours ago Sponsored by:
DOW 18,308.15 164.70 0.91%
S&P 500 2,168.27 17.14 0.80%
NASD 5,312.00 42.85 0.81%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/30/2016 4:02 PM
EMR $54.51 Up +1.49 +2.81%
Emerson Electric CAPS Rating: ****
FNFG $10.18 Down +0.00 +0.00%
First Niagara Fina… CAPS Rating: *****
OXY $72.92 Up +0.78 +1.08%
Occidental Petrole… CAPS Rating: ****
PLAB $10.31 Up +0.20 +1.98%
Photronics CAPS Rating: ***
SYY $49.01 Down -0.02 -0.04%
Sysco CAPS Rating: *****