Here's What the Managers of the $6 Billion TIAA-CREF Trust Have Been Buying

Does this 10.9% dividend yield interest you?

Feb 5, 2014 at 5:36PM

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 the TIAA-CREF Trust Co. In case you're not aware, TIAA-CREF offers financial services to those in the fields of education, medicine, culture, government, and research. Almost 100 years old, it has a solid reputation, with 98% of its funds earning three or more stars in Morningstar ratings. The TIAA-CREF Trust Co. manages much of TIAA-CREF client money, and its reportable stock portfolio totaled $6 billion in value as of Dec. 31, 2013.

Interesting developments
So what does TIAA-CREF Trust's latest quarterly 13F filing tell us? Here are a few interesting details.

The biggest new holdings are the iShares MSCI ACWI Index ETF and the iShares Lehman Intermediate Credit Bond ETF. Other new holdings of interest include NVIDIA (NASDAQ:NVDA), one of the biggest mobile-application processor companies, which offers investors a new 2.2% dividend yield. It has had some trouble competing with Qualcomm and others in mobile processors, but its new Tegra 4 chip has some excited. Bulls like NVIDIA's entry into the mobile IP licensing business, along with its growing presence in cars and its strong position in gaming, while bears don't think it's enough of a bargain at recent levels.

Among holdings in which TIAA-CREF Trust Co. increased its stake was Gilead Sciences (NASDAQ:GILD). The company's oral hepatitis C treatment Sovaldi is on the market, with reported cure rates topping 90% in clinical trials. Gilead Sciences is well known for its success with HIV drugs  and has also recently reported promising clinical trial results for drugs treating lymphomas and blood disorders. With the stock roughly doubling over the past year, some wonder whether it's time to sell Gilead. Many remain bullish, though, with analysts at Robert W. Baird recently upping their target price and projecting that Sovaldi sales in 2014 might top $5 billion.

TIAA-CREF Trust Co. reduced its stake in lots of companies, including Exelon Corporation (NYSE:EXC), the nation's leader in nuclear energy. Exelon has been hurt by the relatively high cost of nuclear power in an environment of very low gas prices, but it has been boosted by rising electricity prices. The stock yields a hefty 4.3%, but that reflects a 41% dividend cut last year. Exelon's third-quarter numbers were solid, and bulls like its valuation and effective cost-cutting, but some worry about nuclear power's long-term prospects and whether some energy-industry regulation might hurt Exelon. Exelon has not been in the best competitive position in the past few years, but rising natural-gas prices could change that. It reports its fourth-quarter results this week.

Finally, TIAA-CREF Trust's biggest closed positions included Raytheon Company and BB&T Corporation. Other closed positions of interest include Ariad Pharmaceuticals (NASDAQ:ARIA) and Eagle Rock Energy Partners, L.P. (NASDAQ:EROC). Ariad Pharmaceuticals' leukemia drug Iclusig was approved by the FDA, but the FDA later had it pulled from the market, only to reinstate it late in the year with more restrictive labeling. Some wonder whether Ariad will be bought out, while others see it offering little beyond tax losses carried forward. Ariad does have more treatments in its pipeline, but most are based on Iclusig. Still, analysts at BMO Capital Markets recently upgraded Ariad Pharmaceuticals to outperform. It's heavily shorted, but its earnings estimates have been rising.

Eagle Rock Energy Partners, yielding 10.9%, had a lousy 2013, dropping nearly 22% while the S&P 500 gained 32%. Given its heavy debt load, some have worried about its dividend's future. (It was already cut by roughly a third last year.) Many have been heartened, though, by its decision to sell its midstream business to Regency Energy Partners for about $1.3 billion, leaving it a pure upstream master limited partnership. The cash infusion is welcome, but Eagle Rock Energy Partners will have to deploy it wisely, making some tough decisions. A further dividend cut is not out of the question.

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.

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Selena Maranjianwhom you can follow on Twitter, owns  shares of Gilead Sciences and Qualcomm. The Motley Fool recommends Exelon, Gilead Sciences, Morningstar, and NIVIDIA. It owns shares of Qualcomm and Raytheon. 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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.

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