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Top 5 Buys of David Carlson's Elfun Trusts in the 1st Quarter

David Carlson (Trades, Portfolio), manager of Elfun Trusts, disclosed this week that his fund's top five buys in the first quarter included an increased bet in Facebook Inc. (NASDAQ:FB) and new holdings in four companies: Lowe's Companies Inc. (NYSE:LOW), Biomarin Pharmaceutical Inc. (NASDAQ:BMRN), Texas Instruments Inc. (NASDAQ:TXN) and Mondelez International Inc. (NASDAQ:MDLZ).


The fund, which is part of State Street Corp. (NYSE:STT) subsidiary State Street Global Advisors, seeks long-term capital appreciation through investments in U.S. companies that have potential to pay good dividends in the future.

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A former manager of the General Electric Co. (NYSE:GE) Pension Trust portfolio, Carlson selects equity securities from a wide range of industries based on the merits of individual companies. As of quarter-end, Elfun Trusts' $2.38 billion equity portfolio contains 43 stocks, with a turnover ratio of 11%. The top-three sectors in terms of weight are technology, health care and financial services, with weights of 24.11%, 18.57% and 17.37%.

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Facebook

Elfun Trusts added 182,392 shares of Facebook, increasing the stake 61.27% and the equity portfolio 1.28%. Shares of the Menlo Park, California-based social media giant averaged $196.62 during the first quarter.

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Facebook announced this week that although the company's daily active user growth and monthly active user growth increased over 10% during the quarter, advertising revenues tumbled in March as government measures aimed to slow the spread of the coronavirus resulted in a significant decline in advertising demand over the final three weeks of the quarter. Further, the company did not release specific guidance for the second quarter or the full year due to the uncertainty regarding the virus.

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GuruFocus ranks Facebook's profitability 9 out of 10 on several positive investing signs, which include expanding operating margins and a return on assets that outperforms 85.83% of global competitors in the interactive media industry.

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Ken Fisher (Trades, Portfolio) also boosted his position in Facebook during the first quarter, increasing his holding 1,141.79%.

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Lowe's

The fund purchased 625,949 shares of Lowe's, giving the holding 2.26% equity portfolio weight. Shares averaged $109.88 during the quarter.

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The Mooresville, North Carolina-based company operates a network of home improvement stores that offer products for home decorating, maintenance, repair and remodeling. GuruFocus ranks the company's profitability 8 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7 and a return on assets that outperforms 90.45% of global competitors.

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Activist investor Bill Ackman (Trades, Portfolio) has not released his firm's March-quarter portfolio update as the deadline is 45 days after the quarter ends. As of the December 2019 portfolio update, Pershing Square owns 8,613,212 shares of Lowe's.

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Biomarin

The fund purchased 406,691 shares of Biomarin, giving the position 1.44% weight in the equity portfolio. Shares averaged $86.22 during the quarter.

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The San Rafael, California-based company manufactures therapies for the treatment of rare diseases. According to GuruFocus, the company's financial strength ranks 6 out of 10, driven by a strong Altman Z-score of 6.29 and a moderately strong Piotroski F-score of 6 despite debt ratios underperforming 68% of global biotech competitors.

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Texas Instruments

The fund purchased 289,561 shares of Texas Instruments, giving the holding 1.21% weight in the equity portfolio. Shares averaged $120.51 during the quarter.

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The Dallas-based company produces analog chips and well-known calculators like the TI-89 graphing calculator. GuruFocus ranks the company's profitability 9 out of 10 on several positive investing signs, which include a three-star business predictability rank and operating margins that have increased approximately 6% per year on average over the past five years and are outperforming over 98% of global competitors.

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Mondelez

The fund purchased 367,883 shares of Mondelez, giving the position 0.77% weight in the equity portfolio. Shares averaged $54.28 during the quarter.

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The Deerfield, Illinois-based company produces a wide range of snack products, including well-known brands like Chips Ahoy and Oreo. GuruFocus ranks the company's profitability 7 out of 10 on several positive investing signs, which include expanding operating margins, a high Piotroski F-score of 7 and a Joel Greenblatt (Trades, Portfolio) return on capital that outperforms 88.43% of global competitors.

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Disclosure: No positions.

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This article first appeared on GuruFocus.