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. It manages money for more than 100 large institutions, and its strategy involves macroeconomic research and fundamental analysis. 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 $1.9 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 $38.0 billion in value as of June 30, 2013.
So what does Fisher Asset Management's latest quarterly 13F filing tell us? Here are a few interesting details:
The biggest new holdings include CapitalSource and Gilead Sciences (NASDAQ:GILD). Other new holdings of interest include Energy Transfer Partners (NYSE:ETP). Gilead Sciences has investors hopeful about its oral Hepatitis C drug, sofosbuvir, which has cleared four phase 3 trials and received priority-review designation from the FDA. The company is also well known for its success with HIV drugs. The stock may not look like a bargain, with a P/E ratio in the 30s, but its five-year projected earnings growth rate is around 26%.
Recently yielding 6.8%, Energy Transfer boasts roughly 47,000 miles of natural gas gathering and transporting pipelines as well as other assets it got via its acquisition of Sunoco last year. The company is vulnerable to drops in natural gas prices and carries a lot of debt. It handily topped projections in its last quarter and has been restructuring itself effectively. Gross margins have been down lately, and free cash flow is negative, as capital spending has increased .
Among holdings in which Fisher Asset Management increased its stake were AbbVie and PetSmart. Fisher reduced its stake in lots of companies, including Banco Santander (NYSE:SAN) and National Oilwell Varco (NYSE:NOV). Banco Santander yields 9.4%, beaten down by Europe's woes. Unappreciated by many, though, is its heavy involvement in Latin America, where it benefits from faster growth rates. The bank's most recent quarter improved on results from the previous quarter. Its stock valuation could be more compelling, but it does offer a huge yield.
National Oilwell Varco, a top maker of oil and gas drilling and oil-field services equipment, offers much to like, such as a big and growing backlog and its massive market share as a supplier of rig equipment. It recently doubled its dividend and is poised to profit as recent shale oil finds lead to production growth. The drilling specialist has even been providing thousands of pumping stations to areas where people are living without sufficient access to clean water.
Finally, Fisher Asset Management's biggest closed positions included Naspers and Brinker International. Other closed positions of interest include Southern Copper (NYSE:SCCO), which has been whacked by falling copper prices and a slowdown in China as it reported first-quarter net profits down 20%. It's planning to nearly double its production over the next few years, and has been taking on a lot more debt as it invests in infrastructure. The stock recently yielded 2.9% and seems fairly valued. The company may shut a Peruvian foundry and refinery due to pollution-control regulations, though, which could hurt its results.
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. 13-F forms can be great places to find intriguing candidates for our portfolios.