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 Eagle Asset Management, the massive money-management arm of Raymond James Financial. Tracing its history back to 1976, the company provides investment services through individual managed accounts as well as mutual funds.
The company's reportable stock portfolio totaled $17.5 billion in value as of March 31.
So what does Eagle Asset Management's latest quarterly 13F filing tell us? Here are a few interesting details: The company upped its stakes in Zillow Group Inc. (NASDAQ:ZG) and Pfizer (NYSE:PFE) by 306% and 10%, respectively, among many increased positions, and established new positions in Yelp Inc. (NYSE:YELP) and Stratasys, Ltd. (NASDAQ:SSYS).
Zillow Group Inc has been on a tear, averaging a 32% annual gain in its stock price over the past three years -- though it actually gave up some ground over the past year, presenting what some see as an appealing entry opportunity. The online real estate specialist bought its major rival Trulia a few months ago for $2.5 billion. In May, management noted, "We have integrated the Zillow mortgage and rentals products into Trulia, giving our advertisers and partners access to an even wider consumer audience." Management has referred to 2015 as a "transition" year as it integrates the two companies and invests in further growth. Meanwhile, it has been setting up direct-feed agreements with almost every major MLS, which is preferable to its previous arrangement with ListHub, where it was sent only some available listings. Zillow is not for the risk-averse investor, but for those intrigued, it offers the possibility of rapid growth.
Pfizer investors are lamenting the patent expiration of blockbuster cholesterol drug Lipitor and the looming debut of generic Viagra in late 2017. Naturally, they're looking to the company's new drugs and its pipeline of drugs in development for relief. One ray of hope is FDA-approved breast cancer drug Ibrance, which some think might generate $3 billion in sales eventually. Another is Pfizer's proposed acquisition of Hospira (UNKNOWN:HSP.DL), a leader in biosimilars, which are generic alternatives to some drugs of great interest to many because of their lower price tags. It could be a solid growth driver, but the FTC has asked for more information before approving the deal that Hospira shareholders have already approved. Meanwhile, the stock recently yielded 3.3%, and management has been buying back lots of shares, reducing share count from around 8 billion in 2010 to about 6.4 billion recently.
Yelp Inc. reported a first-quarter revenue gain of 55% last year over year-ago levels, with average monthly mobile unique visitors growing by 29%, only to see its stock downgraded by analysts and rumors of takeovers grow. What's the problem? Well, analysts had expected a small profit, and the company instead posted a loss, and worse, management's near-term guidance was weak. Dilution is another issue, with Yelp's share count rising from around 15 million in 2011 to about 77 million recently. On the plus side, the company is angling for new growth drivers, such as via its acquisition of food-ordering site Eat24, which represents a vertical integration opportunity, and via acquisitions abroad. A lot of its potential hasn't panned out yet, though, so the company remains a bit of a speculative proposition.
Stratasys, Ltd. is a leader in 3D printing, and one that has been battered recently. In late April, it warned that its first-quarter results and all of 2015 wouldn't be pretty, and then it followed up with the first-quarter numbers, featuring revenue up 14% but gross margins and sales volume in decline. Its share count has doubled over the past few years, too, diluting shareholders' ownership stakes, and it has taken several impairment charges following its purchase of MakerBot. On the plus side, Stratasys' service revenue has been growing at a faster clip, as it pursues a razor-and-blades business model, aiming to profit significantly by selling consumables and services to its installed base.
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.