Here's What This $3 Billion Money Manager Has Been Buying

There are some hefty dividend yields in here -- one of 10.6%.

Feb 3, 2014 at 5:47PM

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 Todd Asset Management. Based in Kentucky, the money manager has an investing strategy centered around its estimate of price in relation to intrinsic value, stating: "We believe investing in stocks with attractive valuation, improving fundamentals and market acceptance of those characteristics increases the probability of out performance."

The company's reportable stock portfolio totaled $3.4 billion in value as of Dec. 31, 2013.

Interesting developments
So what does Todd Asset Management's latest quarterly 13F filing tell us? Here are a few interesting details.

The biggest new holdings are Tata Motors and First Solar. Other new holdings of interest include PotashCorp (NYSE:POT) and Kinder Morgan Energy Partners (NYSE:KMP). Fertilizer giant PotashCorp is yielding 4.5%, and its dividend has increased by nearly 1,000% over the past three years. The company has been challenged lately by an oversupply in the market and the breakup of a key Russian cartel (now seemingly repaired). Potash's last quarter wasn't strong (due to "pricing headwinds," among other factors), and while its long-term promise is intact, there are short-term concerns such as falling margins. Demand from China is a plus, though, and some see the stock as having fallen enough to now be attractively priced.

Energy giant Kinder Morgan Energy Partners offers a tempting 6.8% dividend yield and has been steadily growing its distributable cash flows in recent years. Bulls like that it has identified sizable investment opportunities and is investing more in shipping oil by rail. Kinder Morgan's COO recently spoke with The Motley Fool about shifts in the global energy market, and about how investors might view master limited partnerships, or MLPs, such as Kinder Morgan Energy Partners.

Among holdings in which Todd Asset Management increased its stake were drilling specialists Seadrill (NYSE:SDRL) and Transocean. Seadrill is a deepwater drilling specialist that has been dominating its realm. Some don't like that it has taken on a lot of debt, but others are reassured by an order backlog that tops $19 billion. Seadrill's third quarter featured revenue rising 17% from year-ago levels to top expectations but earnings falling a little short. Seadrill's fleet is more modern than those of its peers, and it has more rigs under construction than some key rivals, too. That might lead to an oversupply problem if oil companies cut back on expenditures for a while, but long-term demand seems likely, and Seadrill is positioned well for the long run. Seadrill's dividend yields a huge 10.6%, making it another IRA candidate.

Todd Asset Management reduced its stake in many companies, including Philip Morris International (NYSE:PM) and Celgene (NASDAQ:CELG). Philip Morris International yields 4.8% and its dividend looks rather secure, thanks to a sizable free cash flow fueled by addicted customers. It has been challenged by many smokers quitting or switching to value brands, and by increased regulations and taxes. Philip Morris International, though, still has many fans who like its international growth prospects, its innovation, its share buybacks, and its embrace of electronic cigarettes, or e-cigs, and heated products. Bears don't like its debt, though. The company reports its fourth quarter on Feb. 6.

Celgene is a biotech company whose stock has averaged annual growth of 31% over the past decade. Contributing to its performance is its successful cancer drug, Revlimid, as well as pancreatic-cancer-treating Abraxane and Pomalyst, targeting multiple myeloma. Celgene's pipeline is also promising, featuring drugs such as apremilast, which fights arthritis, and it has been investing in other companies' promising drugs as well. Celgene's fourth-quarter, revenue jumped 21%, while net income rose by 13%. Lest some investors get carried away, management has tempered near-term expectations.

Finally, Todd Asset Management's biggest closed positions included Ensco and Yum! Brands.

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. 13F forms can be great places to find intriguing candidates for our portfolios.

The No. 1 Way to Lose Your Wealth Without Even Knowing It
You’ve fought hard to build wealth for you and your family. Yet one all-too-common pitfall could completely derail your dreams before you even know it. That's why a company The Economist hails as "an ethical oasis" has isolated five simple questions you must answer to ensure that your financial future is really secure.

Can you answer YES to all five of these eye-opening questions?
Click here to find out -- before it’s too late!

Selena Maranjianwhom you can follow on Twitter, owns shares of Celgene and Seadrill. The Motley Fool recommends Celgene and Seadrill. The Motley Fool owns shares of Philip Morris International, PotashCorp, Seadrill, and Transocean. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers