Ken Fisher is one of the 400 richest people in the United States, drawing his wealth from his books on money management and from his work at Fisher Asset Management. According to his recently filed 13F for the second quarter of 2012, none of the top holdings in Fisher Asset Management’s portfolio had large changes in position from last quarter. Looking a little deeper in the filings, we picked out the six largest new positions in Fisher’s portfolio. Fisher Asset Management doesn’t recommend or endorse any of the stocks or analysis in this article, and we have no relationship with the fund, but based on SEC filings these are our opinions of what they are thinking.
Fisher’s largest new holding according to the 13F was Priceline.com (NASDAQ: PCLN), which made our list of the ten most popular service stocks among hedge funds in the first quarter of the year. The fund bought about 600,000 shares of the travel services company, which has risen 33% over the last year due to strong growth and the fact that it has beaten earnings estimates for four quarters in a row. Sell-side analysts are now at the point where they are estimating a forward P/E of 16 for the company, compared to its trailing P/E of 29, meaning that if the stock continues to beat estimates it will more than justify its current price.
The second and third largest new holdings in Fisher’s portfolio have a common theme that investors should pay close attention to: big spenders. Fisher initiated a 12.9 million share position in Louis Vuitton and a 9 million share position in Las Vegas Sands (NYSE: LVS). Considering the discussion of a global economic slowdown, particularly in China (a crucial market for both companies), this is a bold stance for Fisher to take. Stephen Mandel’s Lone Pine Capital was another major investor in Las Vegas Sands, according to that fund’s 13F for the first quarter.
Combining both themes that have been mentioned thus far, Fisher also initiated a 6.6 million share position in luxury/business travel focused payment company American Express (NYSE: AXP), making this the fund’s fourth largest new holding. American Express experienced very low growth in its most recent quarter compared to the same quarter in 2011 but trades at value stock levels with a trailing P/E of 13 and a forward P/E of 12. American Express is also Warren Buffett’s credit card stock of choice, with Berkshire Hathaway owning over 150 million shares at the end of March.
Salesforce.com (NYSE: CRM) was the fifth largest new position that Fisher Asset Management took in the second quarter of 2012. The fund bought 2.7 million shares of the sales and customer relationship management company, which is up about 20% so far this year. Salesforce.com’s revenue growth has been strong -- 38% in the most recent reported quarter compared to the same period the previous year -- but its price assumes considerable growth in the future with a forward P/E of 62 and a five-year PEG of 3.
SBUX and MCD were second quarter buys that I shorted and covered already. Perhaps he has, too. I got to the sites by Googling the info I wanted. I don't click on others' links. The second quarter was from April 1 to June 30. It's history and doesn't tell us what trades he unwound during the past 4+ weeks.
TA tells the story of the future.
Nice try, but the numbers and patterns tell the story, IMHO.