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 Maverick Capital, founded by Lee Ainslie and Sam Wyly in 1993. Avoiding bonds, commodities, currencies, and options, it sticks with stocks, holding both long and short positions. It employs fundamental analysis, and examines management closely.
The company's reportable stock portfolio totaled $6.8 billion in value as of December 31, 2012.
Interesting developments
So what does Maverick Capital’s latest quarterly 13F filing tell us? Here are a few interesting details:
The biggest new holdings are EMC and Crown Castle International. Other new holdings of interest include United Parcel Service (UPS 0.06%). The delivery giant has seen its performance stutter a bit due to massive pension-related write-offs, but its volume has been growing, it has been raising its rates, and it recently boosted its dividend by 9%. (It now yields 2.9%. The company has committed to hiring 25,000 veterans, and it stands to benefit if Congress continues gutting the Post Office.
Among holdings in which Maverick Capital increased its stake was Citrix Systems (CTXS). The company is impressing some with its virtualization business, adding on mobile capabilities through its acquisition of Zenprise, and growing its recurring licensing revenue. The company’s last earnings report was solid, but management tempered some expectations for 2013.
Maverick Capital reduced its stake in lots of companies, including Skyworks Solutions (SWKS 0.53%), which is a semiconductor company supplying, among other things, radio chips for iDevices. Its focus extends beyond smartphones, though, as it also supplies the car market and medical devices. Recent weakness in Apple has hurt Skyworks, but its long-term prospects remain strong, in part due to a strong balance sheet and robust profit margins.
Finally, Maverick Capital’s biggest closed positions included Citigroup and Endo Health Solutions. Other closed positions of interest include SuperValu (SVU) and Renren (RENN). SuperValu is in the tough supermarket business, where profit margins are thin, and competition tight. The company has drawn a $3.3 billion bid from a private-equity firm, in a deal where SuperValu gives up its big-name supermarkets, and ends up focusing more on its wholesale business and remaining chains, such as Save-A-Lot. The company still has a lot of debt, but with a forward P/E ratio of three, there’s a lot of potential, too.
Chinese social networking specialist Renren is often compared to Facebook, but there are some major differences – such as the fact that Renren is not yet profitable or free-cash-flow positive. Its recent quarterly earnings report was strong, with revenue up 49%, and a smaller-than-expected net loss, but management lowered near-term expectations, too. The company’s online gaming business has been doing particularly well, and management expects it to play a role in monetizing mobile operations.
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.
