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Every quarter, many money managers have to disclose what they've bought and sold. Their latest moves can shine a bright light on smart stock picks.
Today let's look at investment management company Avenir. Founded in 1980 and based in Washington, D.C., it oversees accounts for families, individuals, trusts, institutions, foundations, and retirement plans. The investors there seek a margin of safety in their investments, and eat their own cooking, putting their money where their mouths are.
Why should you look at Avenir's moves? Well, according to TickerSpy, Avenir has outperformed the S&P by more than 16 percentage points since the middle of 2007.
Avenir's stock portfolio totaled more than $700 million in value as of March 31, 2012. The fund's top holdings, representing 22% of the portfolio's value, were American Tower (NYSE: AMT ) , Pioneer Natural Resources, and CarMax.
So what does Avenir's latest quarterly 13F filing tell us? Here are a few interesting details:
New holdings include General Electric (NYSE: GE ) . The massive and well-diversified conglomerate recently reported some very bullish news: Its beleaguered GE Capital unit has resumed paying a dividend to its parent company, signaling that its health has improved. It also acquired mining equipment company Industrea for $700 million, along with some oil and gas companies, and is focusing more on growing its industrial businesses.
Among holdings in which Avenir increased its stake were Frontier Communications (Nasdaq: FTR ) and Antares Pharma (NYSE: AIS ) . The main attraction with Frontier would seem to be its hefty dividend, which even after being nearly cut in half, was still recently yielding nearly 11%. Frontier provides telecommunications services in rural areas, and though its revenue has been growing, investors might want to see stronger cash flow. And in general, landlines look to be a tougher business now, given the rapid proliferation of mobile phones.
Antares is somewhat unusual for a biotech company in that it develops drug-delivery systems (such as injections and gels) that can be used for all kinds of drugs. Also, Antares typically doesn't have to market these systems to doctors or the public -- those offering the drugs will do that. The stock has a lot of short interest, but its bulls point to strong growth projections for injectable drugs. Some speculate that the company may be an acquisition target, as well. The company has various drugs in development. Still, it's a penny stock at the moment, and pennies tend to be extra risky.
Avenir reduced its stake in lots of companies, including American Tower. The stock is the company's biggest holding, at nearly 9% of the overall portfolio, so the 15% drop in shares held might simply reflect some thinning of the position rather than a lack of faith in the company. American Tower recently became a real estate investment trust (REIT), which means it will now have to pay out at least 90% of its income in dividends. Its revenue has been growing at an accelerating rate, but earnings growth has been slowing and it carries a lot of debt. The company has long-term potential, as it builds infrastructure to support the exploding mobile communications industry.
Finally, Avenir unloaded several companies, including Sprint Nextel (NYSE: S ) , America's third-biggest wireless carrier. It has been losing hundreds of millions of dollars as it shuts down Nextel's outdated network, and lost some of those customers, as well. Still, Sprint recently gained more new customers under the Sprint name than did AT&T, and its bulls are excited about revenue from Sprint-supported iPhones.
We should never blindly copy any investor's moves, no matter how talented the investor. But it can be useful to keep an eye on what smart folks are doing. 13F forms can be great places to find intriguing candidates for our portfolios.
If you'd like to profit from the rapid growth of cell phones, smartphones, and tablets, check out our special free report, "The Next Trillion Dollar Revolution." It will introduce you to a compelling candidate for your portfolio.