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 Fisher Asset Management, founded in 1979 by Ken Fisher. You may know Fisher by his longtime column in Forbes magazine, where he's also No. 271 in the magazine's list of the 400 richest Americans, with a net worth of $1.8 billion. You may know his father, as well: Phil Fisher wrote the seminal investing text, Common Stocks, Uncommon Profits.
The company's reportable stock portfolio totaled $35.1 billion in value as of September 30, 2012. It manages money for more than 100 large institutions, and its strategy involves macroeconomic research and fundamental analysis.
Interesting developments
So what does Fisher's latest quarterly 13F filing tell us? Here are a few interesting details:
New holdings include Valero Energy (VLO -1.15%), a major refiner. The company's fans like its solid fundamentals and growth prospects. It can benefit from lower crude oil prices, which means lower input prices for refiners and, thus, higher profit margins -- but that benefit shrinks as gasoline prices fall. Another threat is that of anti-fracking regulations.
Among holdings in which Fisher Asset Management increased its stake was PepsiCo (PEP -0.84%), which has been growing its revenue by an annual average of about 15% over the past five years, and its earnings by about 2%. Bulls like its brand power and its growth in emerging developing markets, such as via its acquisition of Russian company Wimm-Bill-Dann. Bears would like to see stronger earnings growth, and think there are better bargains elsewhere. Meanwhile, my colleague Alyce Lomax isn't thrilled with PepsiCo's support of genetically modified foods.
Fisher Asset Management reduced its stake in lots of companies, including Baidu.com (BIDU 0.80%) and Las Vegas Sands (LVS 0.28%). Baidu.com, the search engine giant of China, has bulls salivating over its prospects. With much of China and Asia yet to get online, there's clearly huge growth potential. Some worry, though, about Chinese antivirus specialist Qihoo's (QIHU.DL) entry into the browser and search arena, as it already serves some 400 million customers. Baidu's market share slipped a bit recently, but going from 75% to 73% still leaves it with a massive advantage over others.
Meanwhile, casino titan Las Vegas Sands has been hurt by sluggishness in Las Vegas, but it's a major player in Asia. Many have been bullish on its prospects in places such as Macau and Singapore, but Singapore has been a big disappointment lately. Others fear that the company's properties in Macau may end up taking business from each other. Management signaled confidence in the company, though, by recently hiking the dividend by a whopping 40%.
Finally, Fisher Asset Management unloaded many companies, such as BB&T (TFC 0.19%). The bank has been bypassing many riskier investments, while boosting its commercial loan portfolio and posting strong performance figures. It also earned high customer-satisfaction marks for its small-business services. BB&T is looking to expand in Texas over the coming year.
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. Therefore, 13-F forms can be great places to find intriguing candidates for our portfolios.