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 Point72 Asset Management, formerly known as SAC Capital Advisors. SAC Capital, run by Steven Cohen, was one of the biggest hedge fund companies around -- until allegations of securities fraud and insider trading led to a fine of more than $1 billion. Now the company, which will no longer manage anyone's money other than that of Cohen, his family, and some employees, has a new name. (It's worth noting that Cohen reportedly averaged returns of roughly 30% annually over two decades.)
Gogo might be familiar to you if you've taken any flights lately, as it provides in-flight Internet access and entertainment to airline passengers. Its stock has been volatile this year, in large part because its IPO shares exited their lockup period and flooded the market. The company is developing new apps for in-flight passengers, and bulls like that Gogo recently increased an order for more radio modems, suggesting continuing growth. They also like its long-term contracts with airlines and some hefty recent insider purchases, which signal optimism. Bears note that the company is likely to soon face serious competition from deep-pocketed major telecom companies. With its price-to-sales ratio about twice that of the S&P 500 and its bottom line in the red, Gogo might experience further turbulence in the near term, but has a shot at long-term growth. Its first-quarter results were strong, with revenue rising 35% year over year.
Verizon Communications is a telecom titan, with bulls loving its market dominance and competitive strengths -- and its resulting fat profit margins. (Net margins recently topped 11%.) It boasts gobs of free cash flow (more than $20 billion annually), too, which can help it further build out its network while generously rewarding shareholders. Verizon recently bought the 45% of Verizon Wireless that it didn't own from Vodafone, and that's seen as a good thing due to Verizon Wireless' solid growth rate. More than a few hedge funds are snapping up shares. The company's first-quarter results were mixed, though, featuring double-digit earnings and operating income growth, but earnings missing expectations. Verizon stock offers investors a fat 4.3% dividend yield.
Talisman Energy, a Canadian oil company, sports a market value above $10 billion and a 2.6% dividend yield. It has been letting investors down over the past few years, but it seems to have a turnaround in progress. Its first quarter featured North American liquids production rising 45% year over year and cash flow popping 19%. It has been selling off assets and paying down debt, which is admirable -- but reducing assets can limit growth potential. Talisman has assets around the world, but it's focusing on North America and the Asia/Pacific region. Some have been speculating that Talisman may soon be acquired, and activist Carl Icahn sees the stock as undervalued.
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