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 Joel Greenblatt's Gotham Capital. It's of great interest to many investors because Greenblatt is the author of the well-regarded and best-selling The Little Book That Beats the Market. Because his system of seeking out companies with high returns on capital and hefty earnings yields is easy to understand and has been successful, his "Magic Formula" has many fans. As my colleague Morgan Housel has noted, "The simple formula absolutely destroys market averages over time. Greenblatt backs this up with considerable statistical evidence."
The company's reportable stock portfolio totaled $1.4 billion in value as of June 30, 2012.
So what does Gotham's latest quarterly 13F filing tell us? Here are a few interesting details:
New holdings include gadgetry accessories specialist ZAGG
Among holdings in which Gotham increased its stake was drilling-services giant Halliburton
Gotham reduced its stake in lots of companies, including Latin American telecom provider NII Holdings
Finally, Gotham unloaded several companies, such as rural telecom specialist Frontier Communications
Ivanhoe's second-quarter report featured growing oil revenue and increased capital investments, but widening net losses. One of its priority businesses is converting heavy oil into light oil. It sports more debt than cash, and its cash from operations has been negative in recent years.
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.
Not everyone's convinced that Frontier Communications can't turn things around. Find out what analyst Dan Caplinger thinks in his premium report on the company.