The latest 13F season is here, when many money managers issue required reports on their holdings. It can be worthwhile to pay attention, as you might get an investment idea or two by seeing what some major investors have been buying and selling.
For example, consider Lone Pine Capital, founded by Steve Mandel in 1997. Prior to that, Mandel was a managing director at Tiger Management. Lone Pine is one of the biggest hedge fund companies and has reportedly outperformed the S&P 500 handily since inception. Like many value investors, Mandel is known to dig deep into companies, aiming to buy undervalued stocks. Lone Pine's reportable stock portfolio totaled $23.2 billion in value as of Dec. 31, 2013.
Lone Pine Capital's latest 13F report shows that it sold out of Visa (V 0.65%) and Kinder Morgan (KMI -0.32%), while trimming its Monsanto Company (MON) position by 37%.
Visa is poised to profit as more and more people and businesses shift from cash transactions to electronic ones, and its presence in emerging markets is also auspicious. Visa was added to the Dow Jones Industrial Index this year, which is significant, given that the index includes only 30 blue chips. It sports many strong numbers, such as solid (and growing) profit margins, and it has been buying back many shares, too, while delivering estimate-topping earnings and revenue. Its 0.7% dividend yield might seem puny, but the company has increased its payout close to fourfold over the past five years. Bears worry that Visa's stock is a bit overpriced right now, and they see growth slowing, perhaps in part because of competition from newer forms of electronic payments.
Pipeline giant Kinder Morgan is a premier midstream MLP (master limited partnership) enjoying reliable income as it collects gobs of cash from its partners. Its natural-gas network is the largest in North America, and it has a five-year backlog of currently identified growth projects totaling $15 billion. Analysts at TheStreet recently rated the stock a buy, citing its revenue growth, growing profit margins, and healthy return on equity, among other things. The long-term picture remains promising for Kinder Morgan. Its dividend recently yielded 5.1%.
Agriculture and seed giant Monsanto, yielding 1.5%, is often in the midst of controversy over herbicides, genetically modified organisms (GMOs), and more. There's more to the company than that, though, as it also sports non-GMO offerings, develops new agricultural technologies (such as agricultural enzymes), and even works to save honeybees. It has generally been triumphant in courtrooms, but that may not continue. Still, bulls like the strong demand for its herbicides and its rich pipeline of products in development, among other things.
