See What This 961% Gainer Has Been Buying

Should you buy any of these stocks, too?

Jun 4, 2014 at 6:17PM

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.

Today let's look at investing giant Daniel Loeb, founder of the Third Point LLC hedge fund. Loeb is a well-known activist investor, famous for publicly airing his opinions about companies in which he invests and not mincing words when he's displeased. His activity warrants watching, because the guy seems to know a thing or two about investing. According to the folks at GuruFocus.com, over the 15 recent years ending in 2013, Loeb racked up a cumulative gain of 961%, compared with just 98% for the S&P 500.

Third Point's latest 13F report shows that it increased or initiated positions in Actavis plc (NYSE:AGN), Cabot Oil & Gas Corporation (NYSE:COG), and Citrix Systems (NASDAQ:CTXS).

Actavis is a $37 billion specialty pharmaceutical giant, up 73% over the past year and averaging 16.8% annual growth over the past two decades. It's buying Forest Labs (NYSE:FRX) in a deal that has some scratching their heads, as Forest Labs is facing patent protection expiration for two key revenue drivers, its Lexapro and Namenda drugs, which tackle depression and Alzheimer's disease, respectively. Still, Forest Labs will provide cash flow, sales strength, and a promising pipeline. Acquisitions are not new to Actavis, which gobbled up Warner Chilcott last year. That helped its first-quarter results, which saw revenue surge 40% year over year and adjusted earnings per share jump 75%. With a forward P/E ratio near 13, the stock seems attractively priced.

Cabot Oil & Gas Corporation has been posting strong, and accelerating, revenue and earnings growth (averaging in the double digits over the past three years), and with a forward P/E ratio near 23 its stock seems attractively valued. Its first quarter featured average production jumping 34% year-over-year, while costs per unit dropped 19%. Cabot is focused on natural gas, and, while enjoying great performance from its Marcellus assets, it's spending more on its Eagle Ford shale development in a shift that could pay off well over the long run. Production has been growing in the Eagle Ford, while Marcellus pricing has been weak lately, so the shift has many nodding in approval.

Cloud-computing and virtualization specialist Citrix Systems is a $10 billion business that has been in a bit of a slump in recent years. It posted a fairly solid first quarter in April, with revenue jumping 12% year over year and earnings topping expectations, but then management lowered near-term projections. Its profit margins and bottom line have been shrinking in recent years, but free cash flow has been growing, and there's no debt concern with Citrix. The company is developing apps for Chromebook and trying to adapt to the growing importance of the mobile realm, but it faces tough competition and isn't yet firing on all cylinders. Management recently upped its share repurchase plan, too, which can boost shareholder returns.

Top dividend stocks for the next decade
The smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

Longtime Fool specialist Selena Maranjian, whom you can follow on Twitter, has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers