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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.
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.