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 the D. E. Shaw & Co., founded by David E. Shaw and with a reportable stock portfolio totaled $41.8 billion in value as of March 31.
Shaw is known as a math wizard, and a quantitative investing pioneer. His firm is reportedly extremely selective, hiring less than 1% of applicants -- and Amazon.com CEO Jeff Bezos once made the cut.
So what does D. E. Shaw's latest quarterly 13F filing tell us? Here are a few interesting details.
The biggest new holdings are Liberty Media and the iShares MSCI Mexico Capped Investable Market Index Fund ETF. Other new holdings of interest include Sarepta Therapeutics (NASDAQ:SRPT). Sarepta stock has soared about ninefold over the past year, and some still see it as undervalued. After Sarepta petitioned the FDA for accelerated approval for its Duchenne muscular dystrophy drug, eteplirsen, the FDA requested more information. That sent shares lower, but management is optimistic about its recent interactions with the FDA.
Among holdings in which D.E. Shaw increased its stake was Keryx Pharmaceuticals (NASDAQ:KERX), which is up more than 350% over the past year. Bulls are excited about its kidney-disease drug, Zerenex. Results for the drug have been promising, and the company is looking to expand its applications and approvals. Not as promising is that the company's experimental colorectal cancer drug perifosine recently posted disappointing results, sending the stock down some. A plus for the company is its ample cash, which should support its drive toward approvals and eventual profits.
D. E. Shaw reduced its stake in lots of companies, including Acadia Pharmaceuticals (NASDAQ:ACAD) and Exelixis (NASDAQ:EXEL). Acadia has skyrocketed over the past year, rising more than 10-fold, on high hopes for its pimavanserin drug, which treats psychosis in patients with Parkinson's disease. If the drug gains FDA approval, it will enjoy little competition and could be a big winner for Acadia. The company thinks the drug might be effective against psychosis related to Alzheimer's disease as well and is conducting trials for that, too. Acadia is also raising about $100 million via a secondary stock offering to fund ongoing and future trials.
Biotech company Exelixis, meanwhile, recently reported non-blowout early sales of its thyroid cancer drug, Cometriq, with management suggesting that it's still too soon to draw conclusions. Some are waiting to see if the drug gets approved to treat prostate cancer, too, and the company is looking at treating as many as nine different conditions with it, such as bone tumors. On the other hand, Cometriq is expensive, and the company's debt has been growing, along with its share count.
Finally, D. E. Shaw's biggest closed positions included Nexen and Mylan. Other closed positions of interest include Sirius XM Radio (NASDAQ:SIRI), which recently hit a five-year high, despite posting disappointing earnings in its last quarter. Still, revenue and earnings are growing at a double-digit rate, which remains attractive. A strong report from Ford is promising for Sirius, as its radios are embedded in many vehicles. Bulls like the company's new personalized radio service, MySXM, too. Meanwhile, Sirius faces competition from Pandora and even Google has a music-streaming business now.
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 13F forms can be great places to find intriguing candidates for our portfolios.