Here's What This $19 Billion Hedge Fund Is Buying

Do these dividends of 4.5% and 7.1% interest you?

Apr 30, 2014 at 10:24AM

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 Acadian Asset Management, begun in 1988 as a foreign stock fund manager. It currently manages more than 40 different investing strategies in global stocks and emerging markets and employs "sophisticated analytical models" with a database of more than 40,000 securities.

The company's reportable stock portfolio totaled $19.1 billion in value as of March 31, 2014.

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

New holdings of interest include Gilead Sciences (NASDAQ:GILD). Gilead Sciences reported first-quarter results that blew away expectations, with revenue doubling over year-ago levels and earnings tripling. Sales of its new hepatitis C drug, Sovaldi, were very strong, but some worry that with its steep price tag (about $84,000 for a 12-week course) and competition, sales could stall. Meanwhile, its HIV drug Stribild has also been selling briskly and might achieve blockbuster status soon. (Gilead is a leader in HIV treatments, which generate much of its revenue.) The company's pipeline is promising, too, with several dozen treatments tackling a range of diseases.

Among holdings in which Acadian increased its stake was energy giant Kinder Morgan Energy Partners (NYSE:KMP), a master limited partnership that offers a tempting 7.1% dividend yield. It recently reported solid first-quarter results, with particular strength in its natural gas pipeline segment, where earnings surged 46% over year-ago levels. The company's distributable cash flow grew by 26%, while overall revenue grew by 37% and the company's backlog grew to nearly $15 billion. Bulls see it as more reliable than some peers, growing even during downturns.

Acadian reduced its stake in lots of companies, including Rite Aid Corporation (NYSE:RAD) and Enerplus Corporation (NYSE:ERF). Rite Aid has been executing an impressive turnaround, with some suggesting that it's gaining ground on its key rivals. For one thing, it's remodeling many locations, creating "wellness stores," and it also recently acquired a chain of retail health-care clinics. Rite Aid's last quarter was a great one, with earnings up nearly 43% over year-ago levels and trouncing expectations, while management upped its projections. Bears would caution, though, that Rite Aid still carries a lot of debt.

Canadian oil and gas company Enerplus yields 4.5% and has been investing in boosting its operations in the promising Bakken and Marcellus Shale fields. It also has valuable operations in Canada. The company's stock yields 4.5%, but its payout ratio has grown steep, meaning that Enerplus has been paying out more than it has been earning. That's definitely a red flag, as is the fact that its dividend is lower than it has been in recent years.

Finally, Acadian's closed positions of interest include oil and gas exploration company Sandridge Energy (NYSE:SD). The company has struggled in recent years, but it has been improving its condition via asset sales and better performance. Its last quarter showed it boosting production while cutting costs. Another advantage is that it has additional layers above and below its Mississippi Lime operations that it can drill into.

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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Longtime Fool specialist Selena Maranjian, whom you can follow on Twitter, owns shares of Gilead Sciences. The Motley Fool recommends Gilead Sciences and Petroleo Brasileiro S.A. (ADR). 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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