Ken Heebner (Trades, Portfolio) is the co-founder of Capital Growth Management, a money management firm that almost routinely produces positive returns, even in challenging investing environments. CGM’s return of 1.39% last year was dwarfed by the 37.61% return it had in 2013.
Heebner has built his reputation on growth. His moves are often seen as daring, but they frequently pay off handsomely. His portfolio changes at a 33% quarter-over-quarter turnover clip, and there 33 new stakes in his portfolio, four of which are among his 20 most valuable stakes.
His most noteworthy first-quarter purchase was Home Depot Inc (HD, Financial), an Atlanta-based provider of home improvement and construction products and services. Heebner acquired 810,000 shares for an average price of $110.3 per share. The purchase made Home Depot the 11th-most valuable stake in Heebner’s portfolio and had a 2.52% impact on that portfolio.
Home Depot has a market cap of $142.22 billion and an enterprise value of $156.26 billion. It has a P/E of 22.2, a Price/Book of 15.5 and a Price/Sales of 1.7. Ken Fisher (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Tom Gayner (Trades, Portfolio), Bill Nygren (Trades, Portfolio), Mario Gabelli (Trades, Portfolio), Ron Baron (Trades, Portfolio), First Eagle Investment (Trades, Portfolio), Bill Frels (Trades, Portfolio), Manning & Napier Advisors, Inc, Signature Select Canadian Fund (Trades, Portfolio), Dodge & Cox, George Soros (Trades, Portfolio), Ray Dalio (Trades, Portfolio), RS Investment Management (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), Ruane Cunniff (Trades, Portfolio), Jeff Auxier (Trades, Portfolio) and Lee Ainslie (Trades, Portfolio) have shares of Home Depot in their portfolios. Jim Simons (Trades, Portfolio), Stanley Druckenmiller (Trades, Portfolio), Louis Moore Bacon (Trades, Portfolio) and Steven Cohen (Trades, Portfolio) sold their stakes in the first quarter.
Another investment that significantly influenced Heebner’s portfolio was his purchase of 2,250,000 shares of Hilton Worldwide Holdings Inc (HLT, Financial), an international hospitality company based in Virginia, for an average price of $27.55 per share. The transaction had a 1.82% impact on Heebner’s portfolio and made Hilton Worldwide the 15th-most valuable stake in that portfolio.
Hilton Worldwide Holdings has a market cap of $28.17 billion and an enterprise value of $39.08 billion. It has a P/E of 40.3, a Price/Book of 6.1 and a Price/Sales of 2.6. Andreas Halvorsen (Trades, Portfolio), Ron Baron (Trades, Portfolio), NWQ Managers (Trades, Portfolio), RS Investment Management (Trades, Portfolio), Jana Partners (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Caxton Associates (Trades, Portfolio), Louis Moore Bacon (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio) have shares of Hilton Worldwide Holdings in their portfolios. Jim Simons (Trades, Portfolio) and Joel Greenblatt (Trades, Portfolio) sold their stakes in the first quarter.
Heebner’s acquisition of 785,000 shares of Starwood Hotels & Resorts Worldwide Inc (HOT, Financial), a Stamford, Connecticut-based hotel and leisure company, made that stake the 17th-most valuable stake in his portfolio. Heebner paid an average price of $78.22 per share. The purchase had a 1.79% impact on Heebner’s portfolio.
Starwood has a market cap of $13.98 billion and an enterprise value of $16.17 billion. It has a P/E of 24.8, a Price/Book of 10.5 and a Price/Sales of 2.5. Andreas Halvorsen (Trades, Portfolio), Jana Partners (Trades, Portfolio), Ron Baron (Trades, Portfolio), Steven Cohen (Trades, Portfolio), Ken Fisher (Trades, Portfolio), John Burbank (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Caxton Associates (Trades, Portfolio), Mario Gabelli (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio) have shares of Starwood in their portfolios. Joel Greenblatt (Trades, Portfolio) sold his stake in the first quarter.
Heebner also bought a stake in Acuity Brands Inc (AYI, Financial), an Atlanta-based electronics manufacturing company. Heebner bought 385,000 shares for an average price of $156.87 per share, making Acuity the 18th-most valuable stake in his portfolio. The deal had a 1.77% impact on Heebner’s portfolio.
Acuity has a market cap of $7.93 billion and an enterprise value of $7.69 billion. It has a P/E of 40.5, a Price/Book of 6.3 and a Price/Sales of 3.1. Columbia Wanger (Trades, Portfolio), Ron Baron (Trades, Portfolio), Jim Simons (Trades, Portfolio), Chuck Royce (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Caxton Associates (Trades, Portfolio), Mario Gabelli (Trades, Portfolio) and Lee Ainslie (Trades, Portfolio) have shares of Acuity in their portfolios. Joel Greenblatt (Trades, Portfolio) sold his stake in the first quarter.
Also among Heebner’s new buys were Wyndham Worldwide Corp (WYN, Financial), Extra Space Storage Inc (EXR, Financial), Lazard Ltd (LAZ, Financial), Martin Marietta Materials Inc (MLM, Financial), Santander Consumer USA Holdings Inc (SC, Financial) and NXP Semiconductors NV (NXPI, Financial).
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