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Every quarter, many money managers have to disclose what they've bought and sold, via 13-F filings. Their latest moves can shine a bright light on smart stock picks.
Today let's look at one of the biggest hedge fund companies, Eton Park, founded by Eric Mindich in 2004. Mindich had spent 15 years at Goldman Sachs before that, becoming, at age 27, its youngest partner. Mindich invests in both long and short positions on stocks and in private equity investments and specializes in merger arbitrage. He reportedly nearly tripled the value of Eton Park in its first seven years but has posted some bumpy results lately, causing some shareholders to pull out.
The company's reportable stock portfolio totaled $4.9 billion in value as of June 30.
So what does Eton Park's latest quarterly 13-F filing tell us? Here are a few interesting details.
New holdings include Ireland-based biotech concern Elan (NYSE: ELN ) , which is planning to spin off its drug discovery business. Doing so will rid Elan of its discovery arm's research expenses, permitting it to apply tax-loss carry-forwards to its gains and thereby lower its tax bill -- for a while. The company has a multiple sclerosis drug, Tysabri, on the market, and much more in development.
Among holdings in which Eton Park increased its stake was Autodesk (Nasdaq: ADSK ) , which specializes in design software and has its hand in the filmmaking industry, too, as well as the nascent 3-D printing business. The company's 3-D modeling software, Autodesk Inventor Fusion, was recently added to the Mac App Store. Autodesk's recent purchase of video-sharing company Socialcam has some worried that it will detract from Autodesk's successful focus. Indeed, the company's last reported quarter was on the ugly side, and it lowered its near-term performance projections.
Eton Park reduced its stake in lots of companies, including E-Commerce China Dangdang (Nasdaq: DANG ) and eBay (Nasdaq: EBAY ) . With eBay's stock up more than 50% over the past year, some think it's no longer a bargain or worry about issues such as online transactions getting taxed. But others see eBay as a great company at a fair price. The company's PayPal unit is a powerful asset, with some wondering whether it will be spun off. Meanwhile, eBay has recently joined with the folks at Discover Financial Services to move PayPal into bricks-and-mortar locations. Its flagship online marketplace is growing briskly, too.
Dangdang, reportedly China's largest bookseller and also viewed as a Chinese version of Amazon.com, is selling a lot more than books these days. But it faces more challenging competition than Amazon did as it grew, and China's near-term growth rate seems to be slowing. Indeed, even Dangdang's customer growth is slowing. If you decide to invest in it, you should prepare for it to put growth ahead of profits for now, following the Amazon playbook.
Finally, Eton Park unloaded several companies, such as oil giant BP (NYSE: BP ) , which has been tackling debt repayment and its legal liabilities from the big 2010 Gulf of Mexico spill by selling off assets to raise money. Still, its production has been shrinking over the past few quarters (while rivals have been upping their investment in development), leading some analysts to downgrade it. Its revenue has been rising, though earnings have been lumpier. Promising, though, are its investments in wind power and biofuels, as well as its rising dividend -- which recently yielded 4.5%.
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.
If you'd rather own Amazon.com than eBay or Dangdang but aren't sure if it's still a smart buy, check out our premium report on Amazon, which runs through everything investors need to know about the company. It also comes with a full year of updates as key news hits, so click here now to get started.