At The Motley Fool, we understand that it often pays to zig when Wall Street zags, but that doesn't mean that we don't pay attention to what leading fund managers are buying and selling. And funds that aren't always in lockstep with the broader market can be a particularly valuable source of insight.
Every quarter, fund managers overseeing more than $100 million must disclose their quarter-end holdings publicly by filing Securities and Exchange Commission Form 13-F. The form lists all U.S.-traded securities the manager held at the end of the quarter. Although the form doesn't disclose the manager's short positions or intraquarter trades, it can shine a bright light on his or her "long" stock bets.
Q3 2011 update
Meet Viking Global Investors, founded in 1999. Viking is known as a long-short global equity fund, meaning that it aims to maintain long positions in companies on which it's bullish, and short positions in those where it's bearish.
The total market value of Viking Global Investors' disclosed equity holdings as of Sept. 30, 2011 -- the latest quarter for which data is available -- was $8.6 billion across 54 holdings. The company's 10 largest positions and associated changes in number of shares held as of Sept. 30 were:
-- increased 151%. (NYSE: USB)
- Invesco -- increased 8%.
- Apple -- new.
- Time Warner Cable -- reduced 27%.
- Valeant Pharmaceuticals International -- increased 88%.
- H&R Block -- increased 18%.
-- increased 37%. (Nasdaq: BIDU)
- LyondellBasell Industries NV -- increased 9%.
- Humana -- increased 46%.
-- increased 65%. (NYSE: AMT)
During the quarter, Viking Global Investors also increased its position in Hartford Financial Services
Penn West Petroleum has been doing well, focusing on light crude oil production and sitting on a strong and promising asset base. It would do well to pay down some debt, but in the meantime, it offers an attractive dividend yield above 5%. Hartford Financial Services
Selected Q3 2011 commentary
Viking Global Investors has a well-diversified portfolio, with significant allocations to health care, financials, tech, and consumer stocks. Here's where the firm has been winning and losing and making new bets.
Wireless communications specialist American Tower was a rare winner among stocks in the third quarter, rising 2% when the S&P 500 sank by about 14%. The company has been investing heavily abroad, especially in India, where its assets increased some 88-fold between 2005 and 2010. The growing use of cell phones has been delivering lots of profits to this company. American Tower has a three-star (out of five) rating at Motley Fool CAPS.
Time Warner Cable didn't do so well, dropping 18%. It has been busy boosting its broadband subscriber base, promoting its high-speed Internet service, and aiming to stop the loss of video subscribers, partly through the acquisition of Insight Communications. Its future isn't clear, though, as Internet offerings are giving traditional cable companies headaches. The company has a two-star rating in Motley Fool CAPS.
Two new holdings for the company are Chinese online media company SINA
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 13-F forms can be great places to find intriguing candidates for our portfolios.