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 Abner Herrman & Brock LLC, which provides portfolio management for high net worth individuals, endowments, and corporate retirement plans.
Recently the fund reported its equity portfolio, as at the end of June. The total value of the portfolio amounted to $331.2 million, up from $311.3 million disclosed at the end of the previous quarter. Consequently, the fund's total return was 6.4% in the last quarter. The filing revealed that at the end of June, the fund added 4 new positions to its equity portfolio, and sold out of 3 other companies. The top ten portfolio holdings as of the end of the quarter represented 30.85%. The largest changes from previous 13-F´s fillings are in the energy sector (3.5%) followed by the reduction of financials and industrials.
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 Merck & Co. (NYSE:MRK), in which the fund disclosed a $15.2 million stake with over 263,570 shares. The company is a leading global drugmaker, producing a wide range of prescription drugs in many therapeutic classes in the U.S. and abroad. It has improved earnings per share by 9.6% in the most recent quarter compared to the same quarter a year ago. With respect to price performance, this stock has enjoyed a rise of 26.85% which was in line with the performance of the market. It has a proven commitment to returning cash to investors, with a current dividend yield of 3.0% which is considered good to protect investor´s purchasing power. Other hedge fund gurus have also been active in the company. Steven Cohen (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio) and David Dreman (Trades, Portfolio) have bought in it in the first quarter of 2014.
The Boeing Company (NYSE:BA) comes in next, the fund owning over 107,170 shares, worth $13.635 million. The company is the world's largest manufacturer of commercial jets and the second largest military weapons maker. It reported earnings per share declined by 11.1% in the most recent quarter compared to the same quarter a year ago. This is another company which returns cash to investors. The current dividend yield is 2.2%, which is considered quite good enough to protect the purchasing power. Other hedge fund gurus have also been active in the company. Paul Tudor Jones (Trades, Portfolio), Ray Dalio (Trades, Portfolio), Bill Frels (Trades, Portfolio), Sarah Ketterer (Trades, Portfolio) and Murray Stahl (Trades, Portfolio) have taken long positions in it in the first quarter of 2014.
In The Walt Disney Company (NYSE:DIS) the fund disclosed ownership of over 119,540 shares, worth $10.25 million. This media and entertainment conglomerate has diversified global operations in theme parks, filmed entertainment, television broadcasting and consumer products. It has reported strong earnings growth of about 30% and the stock has surged by 36.64% over the past year. Other hedge fund gurus have also been active in the company. Joel Greenblatt (Trades, Portfolio), Steven Cohen (Trades, Portfolio), David Tepper (Trades, Portfolio), Sarah Ketterer (Trades, Portfolio), John Buckingham (Trades, Portfolio) and Mario Gabelli (Trades, Portfolio) have taken long positions in it in the first quarter of 2014.
In the next chart we can appreciate the stock’s price movements. Since 2009, 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 Abner’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: Omar Venerio holds no position in any stocks or funds mentioned.
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