Imitation is the sincerest form of flattery, right? Well, when you're learning a new skill, imitation can also be a great way to hone your craft.
If you're learning guitar, you might pick up a book of Jimi Hendrix's licks, or download the chords to a couple of Bob Dylan's songs. So when you're trying to become a better investor, it only makes sense to take a peek at what the professional investors are up to.
For Fools who don't have the time or inclination to pick individual stocks on their own, The Fool's Champion Funds newsletter has put together a buffet of mutual funds that have collectively outperformed their benchmarks by over 15%. The rest of us can tune in directly to what some of the major funds are holding.
You see, the SEC requires institutional investment managers who manage $100 million or more to show their cards via quarterly 13-F filings. This week, I'm looking at the holdings of General Electric's (NYSE: GE ) asset-management arm. I've dug in to see what kind of moves GE Asset Management has been making. To make things even more interesting, I cross-referenced its stocks against the opinions of The Fool's CAPS community.
Below are three stocks that GEAM bought more of between its June filing and September filing ...
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Stock
|
% Change in GEAM Position
|
Current Market Value of GEAM Position
|
CAPS Rating (out of 5)
|
|
Goldman Sachs (NYSE: GS )
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1,748%
|
$101 million
|
***
|
|
Amgen (Nasdaq: AMGN )
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12%
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$680 million
|
***
|
|
Yahoo! (Nasdaq: YHOO )
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6%
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$395 million
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***
|
Source: CapitalIQ, Yahoo! Finance as of Nov. 5, and CAPS.
... and three that the firm lightened its position on.
|
Stock
|
% Change in GEAM Position
|
Current Market Value of GEAM Position
|
CAPS Rating
|
|
The Home Depot (NYSE: HD )
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(84%)
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$22 million
|
**
|
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Pfizer (NYSE: PFE )
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(42%)
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$208 million
|
***
|
|
eBay (Nasdaq: EBAY )
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(26%)
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$146 million
|
***
|
Source: CapitalIQ, Yahoo! Finance, and CAPS as of Nov. 6.
Now, before you make any hasty moves, remember that we're looking at what GEAM has done in retrospect. For all we know, the firm has drastically changed its holdings in any or all of the above stocks since the last 13-F filing. With that in mind, here are some further thoughts on Goldman Sachs.
Striking gold with Goldman
At the end of the second quarter last June, GE Asset Management owned just more than $5 million worth of Goldman Sachs stock. During the following quarter, though, GEAM bulked up that position, finishing the period with just more than $100 million in Goldman shares.
Why such a large buy? Check out the price chart for Goldman. Between June 29 and Aug. 15, Goldman's stock cratered to the tune of 24%, amid the general turmoil in the financial services sector. From that low point to now, though, the firm has bucked the industry trend; while others reported huge write-offs, it announced some darn impressive third-quarter earnings. On that strength, the stock price has run right back up to where it was before at the end of June -- and then some.
The dip in Goldman's stock in August appears to be a picture-perfect example of Mr. Market getting it wrong, offering alert investors like GEAM a chance to get shares of a great company at a great price.
Looking ahead for Goldman, while some players on CAPS believe that big writedowns are still on the way, even more believe that the firm will continue to weather the storm better than anyone else. One such player, CAPS All-Star PI09, rated Goldman's stock an outperformer, saying that Goldman is an "unfortunate ... case of a good company with a stock that got sucked into a bad market." PI09 added that "Goldman is the cream of the crop when it comes to I-Banks."
So who's correct here? Will Goldman continue its run? Or will it end up having to write down positions like everyone else? Hop on over to CAPS and start interacting with the other 73,000-plus CAPS players. While you're weighing in on these stocks, you can also find out more about over 5,000 other stocks that are currently rated on CAPS.
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