Here's What This Billion-Dollar 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. More recently, he's known for confounding comments he made, suggesting that women with children shouldn't be trading stocks.

The company's reportable stock portfolio totaled $1.3 billion in value as of June 30, 2013.

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 the Consumer Discretionary Select Sector SPDR ETF, and the Industrials Sector SPDR ETF. Other new holdings of interest include 3-D printing specialist 3D Systems (NYSE: DDD  ) and SAIC (UNKNOWN: SAI.DL  ) . 3-D printing is still in its infancy, with much promise. 3D has been upping its share count, using that money to invest in growth. Despite significant short interest, it recently received an upgrade from Citigroup analyst Kenneth Wong, and it has been innovating and releasing new products. Some see the stock as overvalued now, but others just see lots of room to grow.

Security and intelligence services specialist Science Applications International Corporation, known also as SAIC (UNKNOWN: SAI.DL  ) , does a lot of business with the military, so it has been vulnerable to spending cutbacks and the sequester. Still, it has been collecting some big contracts, and there are additional billions up for grabs. SAIC is planning to split itself in two this month, separating much of its government work from its other work. (The spun-off entity will be called Leidos Holdings and, with its dividend yield of 3.3%, and a recent and forward P/E near 11, some see it as attractive.

Among holdings in which Tudor Investment increased its stake were U.S. Silica Holdings, and TRW Automotive Holdings. Tudor also reduced its stake in lots of companies, including Ellie Mae (NYSE: ELLI  ) and Sirius XM Radio (NASDAQ: SIRI  ) . Ellie Mae, providing business automation software for the mortgage industry, is putting itself up for sale, perhaps because it sees its future performance to not be as powerful as its (short) past. Revenue has indeed been surging, but the company is very vulnerable to swings in the housing market.

Sirius XM Radio has grown large and profitable, sporting more than 25-million subscribers, more than $3 billion in annual revenue, and revenue and earnings growth at double-digit rates. It's not without competition, though -- not only from Pandora, but also from Apple, and even CC Media. The company has struck a deal with AT&T, but AT&T may turn out to be more of a rival. Growing auto sales bode well for Sirius, as its radios are embedded in many vehicles. It recently refinanced a lot of debt at a lower rate, and has been aggressively buying back shares. It has a clever plan to try to reengage former subscribers, too.

Finally, Tudor Investment's biggest closed positions included call options on the iShares Russell 2000 ETF, and the Financial Sector SPDR ETF. Other closed positions of interest include Spectrum Pharmaceuticals (NASDAQ: SPPI  ) . Spectrum's stock has averaged annual gains of 41% over the past five years, but is down by almost a third in the past year. Sales of its colorectal cancer drug, Fusilev, haven't been as strong as hoped for, and other formulations have disappointed, too. When the company lowered its projections a few months ago, the heavily shorted stock dropped sharply. Still, Spectrum has other drugs in its pipeline, and has been growing by acquisition, too, for example buying Allos Therapeutics (and its lymphoma drug, Folotyn), and Talon Therapeutics, which focuses on cancer and hematology and has the FDA-approved leukemia drug, Mariqbo. Spectrum has also secured rights for the bladder-cancer drug apaziquone.

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.

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  • Report this Comment On September 11, 2013, at 3:46 PM, analyze224 wrote:

    For context re Tudor's purchase of DDD, it looks like the share purchase was 17,500 while Tiger Global's move on DDD, (see M Fool post of earlier today), according to filings - represented a reduction of over 1 million shares.

    Obviously there are differing opinions amongst individual investors and apparently institutional investors as well, on DDD.

    Seems to me the million + share reduction is more meaningful than the 17,500 share purchase.

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