Here's What One of the Richest Hedge Funds Has Bought and Sold

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

Today let's look at GMT Capital, a private investment company founded by Thomas Claugus in 1990 that manages several hedge funds and other accounts. Its reportable stock portfolio totaled $3.6 billion in value as of June 30, 2012. You don't generally grow that large without doing some things right. The company's Bay Resource Partners hedge fund was named one of the richest 100 last year by Bloomberg. In its first 15 years, it averaged a 20% annual return, almost twice that of the S&P 500.

Interesting developments
So what does GMT Capital's latest quarterly 13F filing tell us? Here are a few interesting details.

New holdings include Enerplus (NYSE: ERF  ) and Sequenom (Nasdaq: SQNM  ) . Canadian oil and gas exploration and development company Enerplus has been suffering from very low natural gas prices, but it's also operating in oil-rich regions and has been boosting its higher-margin activities there. It does carry significant debt and hasn't been cash flow positive lately, but many, including some Wall Street analysts, are still bullish on it. The company cut its dividend in order to conserve cash in this tough environment, but it still yields about 6.7%.

Sequenom, which makes molecular and genetic diagnostic tests, has signed up insurers to cover its offerings, but also lost one in Coventry Health Care. (Coventry is being bought by Aetna, though, so this decision might be revisited.) One of the company's tests checks for Down syndrome in a noninvasive manner, which should be of interest to many older pregnant women. Future tests might address conditions such as macular degeneration. Meanwhile, the company is expanding its reach abroad, and some insiders have been snapping up shares,

Among holdings in which GMT Capital increased its stake was drilling-services giant Halliburton (NYSE: HAL  ) , which has been affected by a glut of natural gas that could lead to a cutback in drilling operations. The company has already warned of a soft third quarter in North America due to this. On the other hand, though, the company's expertise in mature fields, unconventional markets, and deep drilling are pluses. And its revenue and earnings growth rates have been accelerating in recent years, and are both firmly in double-digit territory.

GMT Capital reduced its stake in lots of companies, including Latin American telecom provider NII Holdings (Nasdaq: NIHD  ) . The company's revenue has been flat lately, and its earnings have dropped. That's partly due to it investing in its network -- though even there it's a bit behind the times, offering 3G technology in a world increasingly interested in 4G. Meanwhile, Brazil's growth seems to be slowing, and competition is tough. Still, some see the stock as attractively priced right now.

Finally, GMT Capital unloaded several companies, such as Arch Coal (NYSE: ACI  ) , which produces coal used in the utilities and steel industries. The company has been whacked by a slowdown in China's economy coupled with low prices for natural gas. Some wonder whether Arch Coal might get acquired by a healthier rival. A bit of good news recently was China's announcement that it plans to spend $156 billion on infrastructure, which will require a lot of metallurgical coal for making steel.

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're looking for an energy stock for your portfolio but aren't completely sold on Halliburton or Enerplus, learn about another contender in our special free report: "The Only Energy Stock You'll Ever Need." Don't miss out on this limited-time offer and your opportunity to discover this company before the market does. Click here to access your report -- it's totally free.

Longtime Fool contributor Selena Maranjian, whom you can follow on Twitter, holds no position in any company mentioned. Click here to see her holdings and a short bio. Motley Fool newsletter services have recommended buying shares of Coventry Health Care and Halliburton. The Motley Fool has a disclosure policy.

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Read/Post Comments (2) | Recommend This Article (2)

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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 September 13, 2012, at 2:06 PM, Straightener wrote:

    "Future tests might address conditions such as macular degeneration."

    Sequenom has had their test for AMD on the market for almost a year now.

  • Report this Comment On September 14, 2012, at 2:16 PM, Troy2008 wrote:

    SQNM's test is actually invasive, unless you're leaking blood. Amnio and the T21 test both require an office visit with a professional to draw fluid. Just sayin, can't be done at home.

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ACIIQ $0.00 Down +0.00 +0.00%
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