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 activist investment firm Relational Investors. Based in San Diego and run by Ralph Whitworth, the company has made a name for itself by agitating for changes at many major corporations, such as Genzyme and Home Depot. (At Home Depot, Whitworth called for the company to exit its commercial building supply business.)
The company's reportable stock portfolio totaled $5.9 billion in value as of March 31, 2012.
So what does Relational Investors' latest quarterly 13F filing tell us? Here are a few interesting details:
There was just one new holding, apparel retailer Abercrombie & Fitch
Among holdings in which Relational Investors increased its stake were PepsiCo
Relational Investors sees networking and data-storage-equipment chip-maker PMC-Sierra not growing its sales as fast as it could and may push the company to trim its business divisions or perhaps even merge with another company. At PMC-Sierra's 2012 shareholder meeting, management waxed bullish about the company's prospects due to the growth of digitization "of everything," smartphones, cloud computing, and video streaming. It's also aggressively buying back its own stock.
Relational Investors reduced its stake in a lot of companies, including MetLife
Finally, Relational Investors unloaded several companies, such as Freeport-McMoRan Copper & Gold
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.
If industrial stocks interest you, check out our special free report, "3 Stocks to Own for the New Industrial Revolution," which details a new technology that might shift the "Made in China" trend back toward "Made in America."