This $12 Billion Hedge Fund Sold Hewlett-Packard, Micron Technology, and Broadcom

Will you want to sell them, too?

Jun 12, 2014 at 8:22AM

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 Bridgewater Associates, one of the world's largest hedge fund companies. According to its recently released 13F statement, the company has reduced or eliminated its positions in Hewlett-Packard (NYSE:HPQ), Broadcom (NASDAQ:BRCM), and Micron Technology (NASDAQ:MU).

Hewlett-Packard has struggled in recent years, but its stock doubled in 2013 and it's up by double digits so far this year. The printing giant has been hurt by the weak PC market, with shrinking revenue to show for it, while earnings have risen in part due to aggressive cost-cutting. The company's turnaround strategy includes enormous layoffs, to the tune of about 45,000 to 50,000 jobs, with some worrying whether it's cutting bone along with fat. (It hasn't been cutting its R&D spending, though.) A bright spot is its hefty free cash flow, topping $8 billion annually. Hewlett-Packard bulls like its moves into areas such as 3-D printing and in health care analytics, as well as its 1.9% dividend yield. The company's forward price-to-earnings ratio of 8.6 is appealing, but Hewlett-Packard's future is rather uncertain.

Broadcom is a telecom chipmaker whose stock has averaged 3% annual growth over the past decade. It did pop close to 10% recently, though, when the company announced that it's giving up on its low-margin cellular business (which some think Apple might want to buy). A bit of good news is that Broadcom is working with Apple on its HomeKit home-automation technology that should appear in this year's iOS8. Bulls are hopeful about its investments in the infrastructure, mobile, and wearable-computing arena. Bears don't like the company's deteriorating financials and disappointing recent quarterly results -- but many of these numbers could change for the better soon. Broadcom's stock yields 1.3%.

Micron Technology's stock has surged some 130% over the past year, and its P/E ratio is still just near 12, suggesting that it's attractively priced. It offers a lot of reasons to be bullish, such as stabilizing prices, expected continued demand growth for memory, and Micron's presence in iPhones, which are likely to experience a surge in sales with the upcoming debut of the iPhone 6. Some expect the company to start paying a dividend again, as its free cash flow is substantial and profit margins are growing. There are still some worries, though, such as the commoditization of memory, the risk of falling prices, and tough competition.

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Longtime Fool specialist Selena Maranjian, whom you can follow on Twitter, owns shares of Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. 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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