Greenblatt's Top 3 Stakes for the Fourth Quarter
Hedge funds have been filing their 13-F forms, which are quarterly reports of equity holdings by filed institutional investment managers with at least $100 million in equity assets under management, as required by the United States Securities and Exchange Commission (SEC). In this article, let�s concentrate in one particular hedge fund and try to see the principal holdings in its portfolio. I will look into Gotham Asset Management LP, in which Joel Greenblatt (Trades, Portfolio) and Robert Goldstein serve as managing principals and co-CIOs for Gotham, with over 50 years of combined investment experience.
Recently, the fund reported its equity portfolio ended December. The total value of the portfolio amounted to $12.32 million, up from $10.04 million disclosed at the end of the previous quarter. Consequently, the fund's equity market change value was $2.28 million in the last quarter. The filing revealed that, at the end of December, the fund added 196 new positions to its equity portfolio and sold out 231 positions. The top ten portfolio holdings as of the end of the quarter represented 7.17%. The largest changes from previous 13-F�s fillings are in industrial and health care stocks.
In this article, we have selected three companies, in which the fund holds the largest stakes in terms of market value.
The first on the list is Bunge Limited (BG), in which the fund disclosed a $96.07 million stake with 1.06 million shares.This stake represents a 0.78% of the total portfolio. The company is a large, geographically diverse agribusiness and food company. Bunge principally generates its profits from agribusiness.The company is a leading oilseed processor and focuses on Brazil, the second-largest producer of soybeans. As emerging economies consume more meat, it will benefit for this increasing consumption.
During the past fiscal year, the company increased its bottom line. It earned $3.89 versus $0.89 in the previous year. This year, Wall Street expects an improvement in earnings ($6.63 versus $3.89).Earnings per share declined by 20% in the most recent quarter compared to the same quarter a year ago. But the company has demonstrated a pattern of positive earnings per share growth over the past two years.
Other hedge fund gurus have also been active in the company. Formidable investors like Paul Tudor Jones (Trades, Portfolio) and Jim Simons (Trades, Portfolio) have taken long positions, holding 39.21 million shares 37.100 and 551.500 shares respectively.
Gilead Sciences Inc. (GILD) comes in next; the fund owns more than 1.01 million shares, worth $95.15 million. The firm is a biopharmaceutical company, discovers, develops and commercializes medicines in areas of unmet medical need in North America, South America, Europe and the Asia-Pacific. Revenues rose by 134.44% and led earnings per share increased in the most recent quarter compared to the same quarter a year ago ($2.18 vs $0.47). During the past fiscal year, the company increased its bottom line. It earned $7.38 versus $1.83 in the previous year. This year, Wall Street expects an improvement in earnings ($9.47 versus $7.38).
Leon Cooperman (Trades, Portfolio), Jim Simons (Trades, Portfolio) and Steven Cohen (Trades, Portfolio) bought the stock in the fourth quarter of 2014.
In Pilgrim's Pride Corporation (PPC) the fund disclosed ownership of over 2.86 million shares, worth $93.75 million. The firm is the largest chicken producer in the U.S. and Puerto Rico and the second-largest producer and seller of chicken in Mexico. We think this company has an upside potential, considering that it will focus on consumer tastes as well as demographics, making a good opportunity to develop in international markets.
We must mention that it has a good upward trend in the stock price last year, and we like its revenue growth and good valuation levels.
As we can see, it also demonstrated a pattern of positive EPS in most of the five-year period. Chase Coleman (Trades, Portfolio) and Scott Black (Trades, Portfolio) bought the stock in the fourth quarter of 2014. The largest shareholder of the company is Jim Simons (Trades, Portfolio)' Renaissance Technologies, which upped its stake by 72% on the quarter to 2.94 million shares held as of the end of 2014.
Final comment
Although competition in each of the industries is intense, we believe the three firms are going up against its rivals. We think that the three stocks are certainly attractive for fundamental investors.
In future articles, we are going to calculate the intrinsic value of these stocks to determine if they are a good buy in terms of valuation.
Disclosure: Omar Venerio holds no position in any stocks or funds mentioned
This article first appeared on GuruFocus.
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