Recently, 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. 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 Motley Fool Asset Management.
Recently, the fund reported its equity portfolio ended September. The total value of the portfolio amounted to $492.4 million, down from $521.5 million disclosed at the end of the previous quarter. Consequently, the fund's equity market change value was negative 21.5 million in the last quarter. The filing revealed that at the end of September, the fund added three new positions to its equity portfolio and sold out three positions. The top 10 portfolio holdings as of the end of the quarter represented 29.03%. The largest changes from previous 13-Fs fillings are in the energy and consumer discretionary sectors.
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 Berkshire Hathaway Inc. (BRK.A, Financial), in which the fund disclosed a $19.2 million stake with 93 shares. Book value per share grew at a double-digit rate, it increased at a compound annual rate (CAGR) of nearly 20% from 1964 to 2013, which we consider very good. The company has an investment portfolio that includes nearly $117 billion of marketable equity securities as of June 30, 2014. Although, we can have certain doubts about the future of the firm when Warren Buffett (Trades, Portfolio) no longer runs the business, we still believe some new talents can continue to achieve that impressive track record.
During the past fiscal year, the company increased its bottom line. It earned $7.89 versus $5.98 in the prior year. This year, Wall Street expects an improvement in earnings ($9962.57 versus $7.89). Earnings per share have increased by 40.8% in the most recent quarter compared to the same quarter a year ago. As we can appreciate in the next chart, the company has demonstrated a pattern of positive earnings per share growth over the past five years.
This trend obviously suggests that the business is doing pretty well. Other hedge fund gurus have also been active in the company. Lou Simpson (Trades, Portfolio) and Tom Russo (Trades, Portfolio) have taken long positions.
Markel Corp. (MKL, Financial) comes in next; the fund owns more than 24,700 shares, worth $15.7 million. This company replicates Berkshire Hathaway's in the insurance business. Its strategy of investing in high quality equities is a key driver for success. The company has improved earnings per share by 18.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the last two years.
As we can appreciate, the company's shares rose by 28.68% over the past year, which is tremendously attractive for investors.
Other hedge fund gurus have also been active in the company. Chuck Akre (Trades, Portfolio) has taken long positions in the second quarter of 2014, as well as Arnold Van Den Berg (Trades, Portfolio) in the third quarter.
In Banco Latinoamericano de Comercio Exterior, S.A (BLX, Financial) the fund disclosed ownership of more than 473,340 shares, worth $14.52 million. This Panama-based company offers financial services for banks and corporations in Latin American and Caribbean. The company has improved earnings per share by 15.3% in the most recent quarter compared to the same quarter a year ago. During the past fiscal year, the company reported lower earnings of $2.21 versus $2.45 in the previous year. This year, Wall Street expects an improvement in earnings ($2.64 versus $2.21).
As we can see, it also demonstrated a pattern of positive EPS in most of the five-year period. Other hedge fund gurus have also been active in the company. Paul Tudor Jones (Trades, Portfolio) and Charles Brandes (Trades, Portfolio) have taken long positions some years ago.
Final comment
The three stocks are certainly attractive for fundamental investors and make it a worthy investment for Motley Fool’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
