The managers who supervise millions or billions of dollars at the top mutual funds didn't gain that responsibility by accident. These investors know how to pick apart a business, find companies poised to excel, and buy stocks at reasonable prices. Investing in those managers' funds is the easiest way to benefit from all that expertise; at our Champion Funds newsletter service, Amanda Kish's portfolio of picks has collectively outperformed its benchmarks by almost 15%.
But Fools with a do-it-yourself streak can also piggyback on managers' savvy by tuning directly into the major funds' holdings. 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 how Janus Capital Group (NYSE: JNS ) altered its holdings between its June and September filings. To make things even more interesting, I've cross-referenced those picks against the opinions of The Fool's CAPS community.
Here are three stocks the firm bought more of ...
|
Company
|
Percentage Change in Janus Position
|
Current Market Value of Janus Position
|
CAPS Rating
|
|
E*Trade Financial (Nasdaq: ETFC )
|
174%
|
$36 million
|
***
|
|
Amgen (Nasdaq: AMGN )
|
35%
|
$243 million
|
***
|
|
American International Group (NYSE: AIG )
|
25%
|
$231 million
|
***
|
Source: Capital IQ (a division of Standard & Poor's), Yahoo! Finance, and CAPS as of Jan. 7.
... and three in which Janus lightened its position.
|
Company
|
Percentage Change in Janus Position
|
Current Market Value of Janus Position
|
CAPS Rating
|
|
Best Buy (NYSE:BBY)
|
(58%)
|
$108 million
|
***
|
|
Akamai Technologies (NASDAQ:AKAM)
|
(55%)
|
$58 million
|
****
|
|
Qualcomm (NASDAQ:QCOM)
|
(39%)
|
$402 million
|
***
|
Source: Capital IQ, Yahoo! Finance, and CAPS as of Jan. 7.
Before you jump to any hasty conclusions, remember that we're looking at these lists in retrospect. Since its last 13-F filing, the firm may have drastically changed its holdings in any or all of the stocks above. With that in mind, here are some further thoughts on these moves.
E*Trade's hole
It's been a long, hard fall for E*Trade's stock this year, and a mostly deserved one. But many investors, apparently including Janus, think that Wall Street's bears have taken the stock too far. Seeking a contrarian play, CAPS All-Star MCKIrobert gave E*Trade a thumbs-up just before the end of the year. He noted:
Clearly, they messed up by getting involved in mortgage lending starting in 2005. But it appears they have cleaned out their inventory as best they can. As long as this company sticks to what it's good at, there's no reason why its earnings can't grow back to $1-2 a share, and this means a stock price of at least $20.
The call hasn't proved profitable yet, and it's cost MCKIrobert almost 18 points of underperformance. That doesn't mean the turnaround won't happen, though -- it can take some time for a company to slog back from a misstep like this. Even if the company does manage to wrangle its operations back into shape, the pessimism around the stock could take even more time to dissipate.
Already, E*Trade has taken one big step in the right direction by selling its $3 billion asset-backed portfolio to Citadel. It ended up banking only $800 million in the sale, but that's one hefty monkey off its back. Citadel also snapped up some freshly issued stock and debt, putting $1.6 billion more into E*Trade's pocket. Those funds should help the brokerage hold out long enough to see the light at the end of the tunnel.
Do you agree that E*Trade presents an opportunity? Or is that a train at the end of its tunnel? Hop on over to CAPS and start interacting with the other 80,000-plus players. While you're weighing in on these stocks, you can also learn more about the more than 5,000 other companies currently rated on CAPS.
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