This Huge Hedge Fund Company Has Been Selling Some Big Tech and Energy

It can pay off to keep an eye on the big investors out there.

Mar 5, 2014 at 4:45PM

The latest 13F season has arrived, 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 D. E. Shaw & Co. Founded by David E. Shaw, the firm has a reportable stock portfolio totaling $73.3 billion in value as of Dec. 31, 2013. Shaw is known as a math wizard and a quantitative-investing pioneer. His firm is extremely selective when hiring, reportedly accepting about one in 500 job applicants -- CEO Jeff Bezos once made the cut.

D. E. Shaw's latest 13F report shows that it reduced its holdings of EMC Corporation (NYSE:EMC), Oracle Corporation (NYSE:ORCL), and Kinder Morgan (NYSE:KMI).

Storage giant EMC stands to profit from the rapidly growing cloud-computing and "big data" arenas, and it holds an 80% ownership stake in virtualization specialist VMware (NYSE:VMW), too. VMware has recently partnered with Google to bring Windows functions to Chromebooks, and its purchase of AirWatch should improve its mobile position. With EMC's forward price-to-earnings ratio near 12, it looks attractively priced, but some warn that it might be a value trap due to slowing growth, especially in its key storage market. Its fourth quarter offered rather strong results, with revenue up 11% over year-ago levels, but a weak outlook for upcoming quarters. EMC initiated a dividend last year and yields 1.5%.

Data management software giant Oracle, yielding about 1.2%, has seen its growth slow in recent years. It has been growing its dividend aggressively while announcing big stock buybacks. Its prodigious free cash flow tops $14 billion annually, and it has been using some of that for acquisitions, such as online marketing specialist Responsys and cloud-computing player Corente. Oracle is facing significant competition from other tech titans and its server business is challenged, but its second quarter still featured estimate-topping results. Oracle stock, trading with a forward P/E near 12, is appealingly priced. The company has gotten some bad press lately due to its key role behind Oregon's troubled Obamacare website.

Pipeline giant Kinder Morgan is a premier midstream 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 totals $15 billion. Analysts at recently rated the stock a buy, liking its revenue growth, growing profit margins, and healthy return on equity, among other things. The long-term picture remains promising for Kinder Morgan, despite some bad press -- a bearish Barron's article, for example. Its dividend recently yielded 5.1%.

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Selena Maranjianwhom you can follow on Twitter, owns  shares of and Google. The Motley Fool recommends, Google, Kinder Morgan, and VMware. The Motley Fool owns shares of, EMC, Google, Kinder Morgan, Oracle, and VMware. 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.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

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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