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 Acadian Asset Management, begun in 1988 as a foreign stock fund manager. It currently manages more than 40 different investing strategies in global stocks and emerging markets and employs "sophisticated analytical models" with a database of more than 40,000 securities.
The company's reportable stock portfolio totaled $19.1 billion in value as of March 31, 2014.
So what does Acadian's latest quarterly 13F filing tell us? Here are a few interesting details.
New holdings of interest include Gilead Sciences (NASDAQ:GILD). Gilead Sciences reported first-quarter results that blew away expectations, with revenue doubling over year-ago levels and earnings tripling. Sales of its new hepatitis C drug, Sovaldi, were very strong, but some worry that with its steep price tag (about $84,000 for a 12-week course) and competition, sales could stall. Meanwhile, its HIV drug Stribild has also been selling briskly and might achieve blockbuster status soon. (Gilead is a leader in HIV treatments, which generate much of its revenue.) The company's pipeline is promising, too, with several dozen treatments tackling a range of diseases.
Among holdings in which Acadian increased its stake was energy giant Kinder Morgan Energy Partners (UNKNOWN:KMP.DL), a master limited partnership that offers a tempting 7.1% dividend yield. It recently reported solid first-quarter results, with particular strength in its natural gas pipeline segment, where earnings surged 46% over year-ago levels. The company's distributable cash flow grew by 26%, while overall revenue grew by 37% and the company's backlog grew to nearly $15 billion. Bulls see it as more reliable than some peers, growing even during downturns.
Acadian reduced its stake in lots of companies, including Rite Aid Corporation (NYSE:RAD) and Enerplus Corporation (NYSE:ERF). Rite Aid has been executing an impressive turnaround, with some suggesting that it's gaining ground on its key rivals. For one thing, it's remodeling many locations, creating "wellness stores," and it also recently acquired a chain of retail health-care clinics. Rite Aid's last quarter was a great one, with earnings up nearly 43% over year-ago levels and trouncing expectations, while management upped its projections. Bears would caution, though, that Rite Aid still carries a lot of debt.
Canadian oil and gas company Enerplus yields 4.5% and has been investing in boosting its operations in the promising Bakken and Marcellus Shale fields. It also has valuable operations in Canada. The company's stock yields 4.5%, but its payout ratio has grown steep, meaning that Enerplus has been paying out more than it has been earning. That's definitely a red flag, as is the fact that its dividend is lower than it has been in recent years.
Finally, Acadian's closed positions of interest include oil and gas exploration company Sandridge Energy (UNKNOWN:SD.DL). The company has struggled in recent years, but it has been improving its condition via asset sales and better performance. Its last quarter showed it boosting production while cutting costs. Another advantage is that it has additional layers above and below its Mississippi Lime operations that it can drill into.
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.