Over the past days hedge funds have been filing their form 13-F, which is a quarterly report 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 T Rowe Price Group Inc. in which Brian Charles Rogers serves as chief investment officer.
Recently the fund reported its equity portfolio, as at the end of last year. The total value of the portfolio amounted to $436.5 billion, up from $400 billion disclosed at the end of the previous quarter. Consequently, the fund's total return was 9.1% in the last quarter. The filing revealed that at the end of last year, the fund added 133 new positions to its equity portfolio, and sold out of 108 other companies. The top 10 portfolio holdings as of the end of the quarter represented 13.21%. The largest changes from previous 13-F´s fillings are in the industrials sector (0.6%) followed by health care and technology (around 0.2% each).
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- BA 15-Year Financial Data
- The intrinsic value of BA
- Peter Lynch Chart of BA
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 The Boeing Company (NYSE:BA), in which the fund disclosed a $4.5 billion stake with over 32.94 million shares. It is the largest aircraft manufacturer in the world, and one of the largest aerospace and defense companies. It principal segment, the Commercial Airplanes Segment is getting better due to the increase in passenger and freight traffic. Boeing has shown a tremendous and consistent growth over the past quarter, as we can see in the next chart.
The company reported earnings per share increased by 25.8% compared to the same quarter one year prior. Its bottom line increased by $5.97 versus $5.12 in the past year. The market expects for the current year an improvement in earnings to $7.39. Other hedge fund gurus have also been active in the company. Whitney Tilson (Trades, Portfolio), John Burbank (Trades, Portfolio) and Louis Moore Bacon (Trades, Portfolio) have bought in it in fourth quarter 2013.
JPMorgan Chase & Co. (NYSE:JPM) comes in next, the fund owning over 62.09 million shares, worth $3.6 billion. The company reported earnings per share decreased by 0.5% compared to the same quarter one year prior, but beat the Zacks Consensus Estimate by 4.0%. The company returns cash to investors. It raised its quarterly dividend by 26.7% to $0.38 per share. The current dividend yield is 2.5%, which is considered quite enough to protect the purchasing power. In the recent past, a pact of $13 billion settlement with the U.S. government, resolved mortgage-related issues. Also, JPMorgan´s credit quality continues to normalize.
In Pfizer Inc. (NYSE:PFE) the fund disclosed ownership of over 468,480 shares, worth $17.5 million. Pfizer is a biopharmaceutical company which sells healthcare products worldwide. It operates in a highly competitive industry with Merck & Co. Inc. (MRK), Novartis AG (NVS) and Sanofi (SNY). It has reported fourth quarter EPS and revenues above the Zacks Consensus Estimate. It has a proven commitment to returning cash to investors, with a current dividend yield of 3.02% which is considered quite good to protect investor´s purchasing power. The company returned about $15 billion to shareholders (dividends and share buybacks) in 2012.
In the next chart we can appreciate the stock’s price movements. Since 2012, the three stocks have an upward trend.
All of the stocks still have good upside potential despite the fact that they have already risen in the past year. The three stocks are certainly attractive for fundamental investors and make it a worthy investment for Gotham’s portfolio. 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: Victor Selva holds no position in any stocks mentioned.