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 Westfield Capital Management, an investment advisor serving institutions and wealthy investors. It employs deep fundamental research as it seeks out stocks that are underloved by the market, and its largest fund, the Large Cap Growth Equity Fund, has outperformed its Russell 1000 Growth benchmark since inception in 1989. Better still, it's a 100% partner-owned organization, so its staff's interests are aligned with those of clients.
The company's reportable stock portfolio totaled $17.0 billion in value as of Dec. 31, 2013.
So, what does Westfield's latest quarterly 13F filing tell us? Here are a few interesting details:
The biggest new holdings are Teva Pharmaceutical Industries and Tyco International. Other new holdings of interest include Dynavax Technologies Corporation (DVAX 1.44%) and Regions Financial Corporation (RF 0.74%). Dynavax shares are down some 46% over the past year. Its future might be bright if its adult hepatitis B vaccine Heplisav can overcome FDA safety concerns. Dynavax also has more formulations in its pipeline, tackling cancer, asthma, and more, though most are in early trial stages.
Southeast-focused regional bank Regions Financial emerged from the recent financial crisis in relatively good shape, having repaid its TARP obligation back in 2012. Its fourth quarter was a bit mixed, with earnings down from year-ago levels but full-year earnings up over the previous year and loans rising, as well. Bulls are hopeful about the bank's mobile ambitions and like its innovations, such as its "Regions Savings Secured Loan," a new fixed-rate installment loan responding to demand for (dangerous) payday loans. Regions Financial tripled its dividend in early 2013 and yields 1.2%.
Among holdings in which Westfield Capital Management increased its stake was Acadia Pharmaceuticals (ACAD 2.74%). Acadia has nearly quadrupled in value over the past year on high hopes for its pimavanserin drug, which treats psychosis in patients with Parkinson's disease. The company thinks the drug might be effective against psychosis related to Alzheimer's Disease and schizophrenia, as well. Bears worry about the richly valued company's negligible revenue, rising share count, and clinical trial costs. Many think the stock has gotten ahead of itself, especially because ultimate FDA approval for pimavanserin is not guaranteed.
Westfield's biggest closed positions included Citrix Systems and Altera Corporation (NASDAQ: ALTR). Other closed positions of interest include Altria Group, (MO 1.32%). Programmable chipmaker Altera posted mixed fourth-quarter results, with revenue up 2% over year-ago levels, but earnings down. (Both numbers exceeded expectations, though.) Altera faces some tough competition and its profit margin has been pulling back. Still, some see its stock as appealing now, as the company could perform well in the long run, in part due to investments in the Chinese market. Altera stock yields 1.8%.
Domestic tobacco titan Altria sports a sizable dividend yield of 5.4% and its dividend has risen by about 8.5% annually, on average, over the past five years. Altria's future may not be as glorious as its past, due to rising taxes, regulations, competition from discount cigarettes, a shrinking smoker base, and even counterfeit cigarettes. Still, bulls point to its substantial free cash flow. They're hopeful about its move into electronic cigarettes -- one analyst even sees them eclipsing regular cigarettes within a decade -- but the FDA might regulate those, too. Altria's fourth-quarter results were disappointing, with Marlboro volume shrinking by 5.7% over year-earlier levels.
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.