Here's What This 2,115% Gainer Has Been Buying

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 Gardner, Russo & Gardner, a hedge fund company with a record that speaks for itself. Over the past 25 years, according to the folks at GuruFocus.com, it has posted a cumulative gain of about 2,115%, vs. 920% for the S&P 500. Over the past 10 full years, it gained 179%, vs. 100% for the S&P 500.

The company's reportable stock portfolio totaled $8.6 billion in value as of June 30, 2013.

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

The only new holding is energy company Dominion Resources (NYSE: D  ) , which yields 3.9%, and has paid 342 consecutive quarterly dividends. Facing a decline in demand for electricity, Dominion is shuttering a nuclear plant. Bulls like its transmissions business and its aspirations for LNG exportation. Dominion has also recently completed a coal-to-biomass plant conversion, and has been beefing up its renewable energy operations, buying solar farms, for example.

Among holdings in which Gardner, Russo & Gardner increased its stake was DuPont (NYSE: DD  ) , yielding 3.2%. There's talk it might spin off its performance chemicals business, and it has been experiencing weakness in agriculture, and demand worries over titanium dioxide.

Gardner, Russo & Gardner reduced its stake in companies such as Hasbro and Washington Post – which was recently bought by Amazon.com founder and CEO, Jeff Bezos.

Finally, Gardner, Russo & Gardner's biggest closed positions included Novartis and Alnylam Pharmaceuticals. Other closed positions of interest include Exact Sciences (NASDAQ: EXAS  ) , Rite Aid (NYSE: RAD  ) , and Corning (NYSE: GLW  ) . Exact Sciences is developing a colon-cancer test, which isn't proving to be as exact as some might have hoped, though it still has value. The company has been issuing new shares, to raise funds for further product testing and development. Some think it might end up bought out. In its second quarter, revenue was flat, and losses shrank.

Rite Aid stock has been soaring lately, and the company is poised to profit from Obamacare, which should deliver more insured Americans demanding more medications. But Rite Aid is still bearing more debt than competitors, and has been addressing that in part by closing some stores. But it's posting growth and net gains instead of losses lately, so there is reason to be hopeful. Its August comps showed improvement.

Corning's second quarter was solid, with core revenue and earnings rising by double digits, and several business segments, such as telecommunications, life sciences, and display technologies, growing briskly. Its Gorilla Glass is selling well, and Corning's partnership with View and its tint-adjusting glass is promising. Some also hope to see Gorilla Glass incorporated in automobiles in the future. The company has upped its dividend recently, and it now yields 2.8%. Its dividend has doubled in less than three years, while the company has been boosting its share repurchase program. Corning's stock seems attractively priced, with a forward P/E near 10. It was downgraded  by Oppenheimer last week, from Outperform to Perform.

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 (8) | Recommend This Article (5)

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.

  • Report this Comment On September 08, 2013, at 9:05 AM, funfundvierzig wrote:

    "...It [DuPont] has been experiencing weakness in agriculture, and demand worries over titanium dioxide."

    Results in DuPont AG in the most recently reported quarter, Q2 2013, were sickly year-over-year, with sales volume up a paltry 1% and operating earnings declining by 1%.

    Looming over DuPont AG are tens of thousands of litigation claims in numerous federal and state courts across the land triggered by DuPont's failed dandelion treatment for the lawn. DuPont Imprelis settlements for extensive tree losses may reach $2 billion or more in our studied estimation. DuPont Management and their PR professionals have largely kept the sheer magnitude of their Imprelis litigation liability exposure under wraps, downplayed and spun.

    ...funfun..

  • Report this Comment On September 08, 2013, at 2:00 PM, mdkca wrote:

    They owned a whopping 439 shares of Exact Sciences (EXAS) for a value of $4,000 in total. Poor integrity on behalf of the author to suggest some grand closing and use it to support their short position.

  • Report this Comment On September 08, 2013, at 2:18 PM, Kleeno65 wrote:

    Of course Exact Sciences' "revenue is flat".... because they haven't begun to sell anything yet. Idiot.

  • Report this Comment On September 08, 2013, at 3:15 PM, nomofunfun wrote:

    DuPont is superior-managed. The Danisco acquisition alone has been bringing in hundreds of millions in rich profits. Throw in that DuPont beat out Monsanto in South Africa for Pannar Seeds, another DuPont blowout of Monsanto!

    As for anyone believing that DuPont will have to pay more than a hundred million for the Imprelis losses clearly doesn't understand how insurance works. Insurance premiums are paid annually by DuPont to protect against any one event that can cost more than a few hundred million. DuPont leaders wisely insure their company (unlike Monsanto which is on the hook for some $7 Billion in losses once Brazil's government finalized payments to farmers).

    DuPont....a SUPERIOR investment!

  • Report this Comment On September 08, 2013, at 4:07 PM, funfundvierzig wrote:

    Investors, proponents for DuPont Management have cleverly and systematically misled the investment community as to insurance covering the waxing Imprelis losses and prospects for loss recovery.

    According to SEC filings, to date after more than two years since Imprelis claims begin to pile up, not a single dollar of insurance has been recovered by DuPont with respect to Imprelis claims paid out by DuPont. Why? We strongly suspect the fact this new product failure is steeped in fraud per the cogent allegations of thousands of Imprelis plaintiffs. As a general rule, state laws and public policy prohibit insurers from insuring against fraud committed by the insured and paying out claims from self-generated fraud is illegal. In short, the insured cannot be enriched by its own commission of fraud. Interesting to note that DuPont Management has never disclosed the identity of these "insurance carriers" alluded to in small print footnotes to SEC filings.

    So far, DuPont has incurred nearly $900 million in Imprelis charges (no insurance recovery) from claims submitted directly to DuPont to the Company's internal claims resolution programme. Pending are what we believe conservatively is another $2 billion or more in claims in litigation in thousands of lawsuits in federal and state courts.

    Investors must assiduously cut through the Teflon Curtain to see what is behind in order to value this unwieldy conglomerate based in Delaware. ...funfun..

  • Report this Comment On September 08, 2013, at 5:35 PM, nomofunfun wrote:

    The highly reputable DuPont (unlike Monsanto, which is being sued by farmers worldwide for GMO wheat fraud) wisely put aside $900 million NOW to pay customers, while getting almost fully reimbursed by insurers lately. DuPont clearly doesn't want customers to suffer and wait for insurance to kick in. That's a classy company!

  • Report this Comment On September 08, 2013, at 7:20 PM, funfundvierzig wrote:

    Investors, the heckler shilling for DuPont Management and who has specifically targeted us with the abusive and derogatory I.D., "nomofunfun", is putting out false and deceptive information on the colossal DuPont Imprelis fiasco. DuPont has not been "almost fully reimbursed by insurers lately", as he alleges. This statement is false and misleading.

    Below is the exact disclosure in DuPont's latest quarterly SEC 10-Q filed on July 23, 2013, Note 9 to the Consolidated Financial Statements, in pertinent part:

    "The company has an applicable insurance program with a deductible equal to the first $100 [$million] of costs and expenses. The insurance program limits are $725 [$million] for costs and expenses in excess of the $100 [$million] DuPont has submitted and will continue to submit requests for payment to its insurance carriers for costs associated with this matter. The process of seeking insurance recovery is ongoing and the timing and outcome are uncertain."

    There is no evidence that DuPont has recovered a single dollar of insurance moneys for Imprelis as of June 30, 2013. Furthermore the process of attempting to collect from these unnamed "insurance carriers is "uncertain" and problematic.

    The zealous advocates and fans of DuPont Management continue to dissimulate and mislead investors with respect to the enormous magnitude of this costly DuPont Imprelis debacle. Investors should beware and be wary.

    ...funfun..

  • Report this Comment On September 26, 2013, at 6:38 PM, napoleon56 wrote:

    I find it funny the fool will keep you hanging on to EXAS when the FDA has not even had an evaluation on this we know DVAS heplisav is going through FDA safety trials and EXAS a stock that I have been trading for over 8 years is holding a value over 11 dollars on a story that has been being told for over 8 years for sure. Since DVAS and the FDA have not been able to We don't even have the FADA giving orders to EXAS yet and we are still trading on a story. Heplisav is showing progress and moving forward with good results with a 1.26 price tag. Now all the investors that did not get gains because of the FDA, are all out to sue. Gee I wonder what will happen when EXAS makes it to the big game will all the bone heads that invested on the story take them to court, of course they will if the finding need more study. I think EXAS has a great story and I think they will do well in the long run. However the Dis on DVAS is stupid.

Add your comment.

DocumentId: 2626680, ~/Articles/ArticleHandler.aspx, 7/23/2014 5:15:48 AM

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...


Advertisement