Here's What This Market Wizard Has Been Buying

Every quarter, many money managers have to disclose what they've bought and sold, through 13-F filings. Their latest moves can shine a bright light on smart stock picks.

Today let's look at Tudor Investment, founded in 1980 by Paul Tudor Jones and featuring the flagship Tudor BVI fund. Jones, featured in Jack Schwager's Market Wizards: Interviews With Top Traders, was one of the few to foresee the 1987 market crash (and he made many millions on it as well). Known for focusing on short-term trading, equity, venture capital, debt, currency, and commodity markets, he has recently been employing a more conservative strategy, resulting in some performances that have been less spectacular than usual.

The company's reportable stock portfolio totaled $2.9 billion in value as of March 31.

Interesting developments
So what does Tudor's latest quarterly 13-F filing tell us? Following are a few interesting details.

New holdings include Seadrill (NYSE: SDRL  ) , an offshore driller recently yielding close to 8% in dividends. Bulls like its geographically diverse operations and its prospects, as many companies will need its services as they explore for oil. But bears note that it has been burning cash for a long time and sports billions of dollars of debt. Still, in its last quarter, it noted that its order backlog is at record levels, near $14 billion, and that the daily rates charged for its ultra-deepwater services have been rising.

Among holdings in which Tudor increased its stake were Frontier Communications (Nasdaq: FTR  ) and Entropic Communications (Nasdaq: ENTR  ) . Frontier, recently yielding a whopping 10.7%, has been challenged by falling subscriber rates, steep debt, and financial conditions troubling enough to cause it to cut its dividend. Still, while its landline phone business isn't the most attractive, it's also developing its broadband offerings.

Entropic, focusing on semiconductor technology for the home entertainment niche, has bought the set-top business of bankrupt Trident Microsystems and is working with Intel to get into the Internet-TV business as well. Bulls like its double-digit revenue growth and its balance sheet, while bears fret over its volatility, falling margins, and potential overdependence on a few customers.

Tudor reduced its stake in lots of companies, including wireless broadband provider Clearwire (Nasdaq: CLWR  ) , which has seen its stock plunge some 70% over the past year, partly because of its having bet on the wrong horse, WiMAX, as the emerging 4G standard, and partly because of slowing subscriber growth rates. It's now firmly in dangerous penny-stock territory and sports $4.2 billion in debt. A bit of good news for Clearwire bulls is the company's renegotiated deal with Sprint Nextel.

Finally, Tudor unloaded plenty of companies, such as Sirius XM Radio (Nasdaq: SIRI  ) . Some worry that streaming music competition will sink Sirius, but Sirius has been growing its subscribership and monthly price nevertheless. A serious issue is the company's debt load, but if it can grow its cash flow more, that will become less of a worry.

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, and 13-F forms can be great places to find intriguing candidates for our portfolios.

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Editor's note: A previous version of this article mistakenly said that Clearwire's subscriber levels had fallen. The Fool and the author regret the error.

Longtime Fool contributor Selena Maranjian, whom you can follow on Twitter, owns shares of Entropic Communications, Intel, and Seadrill, but she holds no other position in any company mentioned. Check out her holdings and a short bio. The Motley Fool owns shares of Seadrill and Intel. Motley Fool newsletter services have recommended buying shares of Intel and Seadrill. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.


Read/Post Comments (6) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 01, 2012, at 6:56 PM, Austin77478 wrote:

    Another veil swipe at Sirius, Selena! Why didn’t you add the other companies the so called “Market Wizard” dumped? What about the “Market Wizard” that added Sirius to their portfolios?

  • Report this Comment On July 02, 2012, at 10:00 AM, wtfiswrongwithu wrote:

    This is probably the worst article I have ever read.

    You are either an idiot or a shill paid by someone to write BS about these companies, especially Clearwire and Sirius.

    I think working the counter at McDonalds suits you better.

  • Report this Comment On July 02, 2012, at 10:29 AM, cjmac136 wrote:

    You are correct acout Clearwires' stock price but are totally incorrect about falling subscriber numbers. In fact, Clearwire has added more wireless subscribers than the much bigger Verizon has each quarter over the past year. You need to check some facts before posting.

  • Report this Comment On July 02, 2012, at 11:57 AM, TMFSelena wrote:

    I think you're right, cjmac136. Have asked for a correction. I did look at facts, but misread one.

  • Report this Comment On July 02, 2012, at 3:12 PM, spokanimal wrote:

    Absolutely, you mis-read that, Selena... badly.

    I'm not sure cjmac was entirely correct when he insinuates clearwire added more subs that ALL of Verizon's additions, but this much is absolutely accurate...

    Clearwire added substantially more WiMax subscribers to it's network in EVERY quarter of 2011 than Verizon added (net) to it's LTE network.

    I'm not certain how the tally goes for Q1 of 2012, but clearwire did have about 600,000 net-net WiMax subscriber adds in Q1... fewer net-new adds than in any quarter stretching back over 2 years... but more than anybody expected considering Sprint's comments in December about WiMax's future...

    ... comments that appear very un-realistic when you consider that Sprint has since launched new, WiMax service programs on BOTH of it's wholly-owned subsidiaries, Virgin and Boost Mobile.

    The reason WiMax is doing so well?

    It's cheap wholesale-wise for service providers like FreedomPop and NetZero (new wholesale customers of Clearwire's WiMax service) but for sprint, it's even way cheaper than that... and thus extremely profitable.

    The reason is because sprint's deal with clearwire last december allows sprint to pay 1, flat rate for all the WiMax it wants for 2 full years. That means that every new WiMax sub Sprint signs up... and every unlimited sprint WiMax plan that ramps up heavy usage of the network... incrementally costs sprint zero dollars to facilitate.

    If only they could have gotten such a sweet deal for I-Phone!

    Meanwhile, clearwire builds more and more dependency on it's massive spectrum from sprint and others... which will come in handy in december of 2013, when it comes time to re-visit the contracts.

    Spokanimal

  • Report this Comment On July 02, 2012, at 5:42 PM, spokanimal wrote:

    @ Selena:

    It appears that you changed your wording in this article.

    Readers note: I made my comment above when the author originally stated that clearwire's WiMax subscriber count was "falling".

    S

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