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 Moore Capital Management, managed by billionaire Louis Moore Bacon. Bacon is known for employing a global macroeconomic focus in his investing, and has been among the top 20 money earners since the 1990s, per GuruFocus.com. Bacon's fund has turned in some spectacular performances, but also some lackluster ones, and after poor resultsin 2011 he returned $2 billion to shareholders, citing the fund's size as an obstacle. Still, Bacon seems to have solid investing chops, with his flagship fund reportedly averaging nearly 19% in annual gains since its inception in 1989 (as of 2012).
The company's reportable stock portfolio totaled $4.7 billion in value as of Sept. 30, 2013.
So what does Moore's latest quarterly 13F filing tell us? Here are a few interesting details.
The biggest new holdings include Facebook and Bank of America. Other new holdings of interest include Inovio Pharmaceuticals (NASDAQ:INO) and Rite Aid (NYSE:RAD). With its promising pipeline and also a long history void of marketed products, Inovio has left many investors uncertain about its standing. It's developing DNA-based vaccines that tackle major diseases such as cancer, influenza, HIV, hepatitis C, malaria, and more, and has reported some positive results along the way, too. It also has some big believers, as it's funded by bigger pharmaceutical entities, as well as government and academic sources.
While many continue to think of Rite Aid as struggling, its stock has more than quintupled over the past year as the drugstore chain turns itself around. Its third quarter featured continued growth and profitability, but management also lowered near-term expectations. Like other health care-related companies, Rite Aid is poised to benefit from the many newly insured customers delivered by Obamacare. It might seem that the stock has no upside left after a strong run, but it actually still seems cheaper than key rivals, though their businesses have stronger track records. Still, Rite Aid carries a lot of debt.
Moore Capital Management increased its stake in holdings including Amarin (NASDAQ:AMRN), a late-stage cardiovascular-focused biotech enterprise. But it's not a good sign when an article offers "3 Lessons from Amarin's Failures in 2013." Amarin has seen its stock fall by about 75% over the past year, as its FDA-approved, fish-oil-based drug to lower triglycerides,Vascepa, was pressured by competing drugs and emerging generics, as well as poor likelihood of winning approval for other indications. Still, there's hope for such approvals. Meanwhile, the company's CEO has left the building.
Moore Capital Management reduced its stake in a number of companies, including LinnCo (NASDAQ: LNCO) and Ariad Pharmaceuticals (NASDAQ: ARIA). LinnCo is an oil and gas company with a dividend yield of 10.4%. The company largely exists to own units of the master limited partnership Linn Energy and convert distributions into dividends. Linn and LinnCo have bought Berry Petroleum, a deal many see increasing its operational efficiency and delivering high-quality assets. Bulls like Linn's cash generation and growth prospects, but bears worry about operational mishaps and see greener pastures elsewhere.
Ariad has had a bumpy year, with its stock losing close to 70% of its value. The company's leukemia drug Iclusig was yanked off shelves a few months ago, due to blood clots, but the FDA just permitted its return to the market, albeit with a more restrictive label. That's a big deal, since the drug is part of other ongoing trials for the company. My colleague Brian Orelli has seen potential for Ariad but warns that there's still a good deal of uncertainty.
Finally, Moore's biggest closed positions included calls on the PowerShares QQQ Trust ETF and the iShares MSCI Emerging Markets Index ETF.
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.