Do you wait for 13-F filings with baited breath? I know I do. That's because these 13-F quarterly filings tell us what billionaire investors like Warren Buffett, George Soros, and Carl Icahn are buying. That kind of insight can go a long way toward helping investors spot new investment ideas. With that in mind, let's dive into the most recent 13-F filings for these billionaires and see what stocks these gurus are betting will head higher.
First up is the oracle of Omaha, Warren Buffett. Buffett is the de facto poster child for buy-and-hold investing and his status as the second richest person in the U.S. is testament to the benefits of spurning the short view in favor of the long-haul.
According to the most recent filing by his firm, Berkshire-Hathaway (NYSE:BRK-B), Buffett and his team loaded up on shares in Deere & Company. Berkshire Hathaway already owned a stake in the iconic maker of yellow and green agriculture equipment, but a doubling of its stake in the company suggests Buffett thinks a larger and longer living population will continue to support demand for farming equipment for years to come.
While Buffett bought more of Deere & Company, he also took new stakes in some companies last quarter too. Notably, Berkshire Hathaway purchased 4,747,397 shares of the media conglomerate Twenty-First Century Fox and 8,438,225 shares in the Burger King and Tim Horton's operator Restaurant Brands International.
Next up is hedge fund legend George Soros. Ask any hedge fund manager to list the most influential stock-pickers over the past 40 years, and Soros is bound to be near the top of their list.
Soros' investment approach differs from Buffett's in that his portfolio is always in flux depending on his ever-shifting views. Among other things, this means that long-term investors should probably take his positions with a grain of salt. After all, just because he bought shares in a company last quarter, doesn't mean he'll own them next quarter.
Regardless, Soros' 13-F can be a treasure trove for investors looking for new ideas, and the recent filing by his Soros Capital Management is no exception.
Tossing-aside recent IPOs (Soros participates in a lot of them, but may not hold them for very long) and focusing instead on the non-IPO companies Soros bought last quarter shows he's started bargain hunting in energy.
Among his new buys are PDC Energy, Devon Energy, Continental Resources, and Transocean Ltd. To hedge those energy bets a bit, Soros also took stakes in companies like Lyondell Basell Industries N.V., a petrochemical and plastics maker, and Alaska Air, a regional airline, that could benefit from lower energy prices.
While Buffett is a long-term buy-and-holder and Soros moves frequently in-and-out of positions, billionaire activist Carl Icahn takes a bit of a hybrid approach. Sometimes, he'll take stakes that he'll hold onto for years, while at other times he'll hold onto a position for a much shorter period.
In either case, the common thread that binds his buys is whether or not he believes he can unleash value by engaging with management to convince them to spin-off parts of their business, boost buybacks, increase dividends, or find an acquirer.
In the fourth quarter, Apple Inc remained his second biggest position behind his ownership stake in Icahn Enterprises LP (NASDAQ:IEP).
Although Icahn didn't boost his Apple stake, he did add 445,868 shares to his position in eBay Inc., which brought his total holdings in the online retailer to 46.27 million shares. After a contentious battle with eBay's management, Icahn was delivered a win when eBay's board agreed last fall to spin-off its Paypal money processing business this year.
Since the number of shares Icahn added to eBay was small, investors may find his big bump-up in ownership of Hertz Global Holdings to be more intriguing.
In the fourth quarter, Icahn increased his stake by roughly a third to 51.9 million shares. Since initiating his Hertz position last August, he has already gotten three people of his choosing elected to its board and given that he's added so many new shares to his position, it appears he thinks that these new board members will help Hertz become far more shareholder friendly from here.
Tying it together
When it comes to deciding which stocks to own, investors have to do their own homework. However, following in the footsteps of billionaires who have been-there and done-that through thick and thin could be a good place to start. That suggests long term investors may want to take a hard look at Buffett's embrace of Deere & Co, Twenty-First Century Fox, and Quality Restaurant Brands. Investors that may have a shorter time horizon than Buffett's "buy forever" approach might also find that focusing attention on Soros bets in energy and Icahn's stakes in eBay and Hertz may be profit-friendly too.