A mixture of macro, micro and technical considerations join to reinforce our comment from last quarter’s letter of Auguest 3rd that “… the stage should be set for another run of meaningful size into year-end”. Ensuing developments lead us to think that run could continue well into the first quarter of next year. Aft er that we would have to reassess. While a movement away from the tight synchronization of monetary and fiscal policies around the world remains a risk, there still seems to be a widely shared inclination to err in ways that favor equities.The reported results confirmed his assessment that little top line growth goes a long way in bottom line growth for the S&P 500 companies.
Throughout the downturn, companies globally worked hard at rationalizing cost structure, and thus are now poised to reap rewards should revenues begin to grow. According o a study by Goldman Sachs, with only a quarter of the non-financial companies in the S&P 500 significantly beating analysts’ estimates for second quarter revenues, roughly half significantly beat estimates on earnings. This exemplifies the power of margin expansion, and hint at what could happen should the number of top-line surprises increase through Q3 reporting season just begun.
Yesterday, Paul Jones was reported that he is not accepting new investors for one of his funds:
Paul Tudor deals with international stocks, commodities, fixed income, and foreign currencies, GuruFocus tacks a small portion of his portfolio and that is in the stocks that are traded in the US.
For the quarter ended on September 30, 2009, these are the stocks he bought the most:
No. 1: Chesapeake Energy Corp. (CHK), Add: 0.77% of the portfolio - Total: 166,300 Shares
Chesapeake Energy Corp. is an independent oil and gas company engaged in the development, exploration, acquisition and production of onshore natural gas and oil reserves. Chesapeake Energy Corp. has a market cap of $16.13 billion; its shares were traded at around $24.91 with a P/E ratio of 9.9 and P/S ratio of 1.4. The dividend yield of Chesapeake Energy Corp. stocks is 1.2%. Chesapeake Energy Corp. had an annual average earning growth of 19.6% over the past 5 years.
No. 2: Mead Johnson Nutrition Company (MJN), Buy: 2.14% of the portfolio - Total: 196,500 Shares
Mead Johnson Nutrition Company is a pediatric nutrition company. It manufactures, distributes, and sells infant formulas and other nutritional products worldwide primarily under the `Enfa` family of brands. Mead Johnson Nutriti has a market cap of $3.27 billion; its shares were traded at around $42.59 with a P/E ratio of 20.4 and P/S ratio of 1.2. The dividend yield of Mead Johnson Nutriti stocks is 1.8%.
No. 3: Mindray Medical International Ltd. (MR), Add: 0.74% of the portfolio - Total: 325,400 Shares
Mindray Medical International Limited is a leading developer, manufacturer and marketer of medical devices in China with a significant and growing presence worldwide. Mindray Medical International Ltd. has a market cap of $2.53 billion; its shares were traded at around $33.53 with a P/E ratio of 28.7 and P/S ratio of 4.6. The dividend yield of Mindray Medical International Ltd. stocks is 0.6%.
No. 4: Health Care SPDR (XLV), Add: 2.36% of the portfolio - Total: 467,344 Shares
Health Care Select Sector SPDR seeks to provide investment results that correspond to the price and yield performance of the Health Care Select Sector of the S&P 500 Index (the Index). The Index includes companies from industries, such as pharmaceuticals, healthcare equipment and supplies, healthcare providers and services, biotechnology, life sciences tools and services, and health care technology.
Health Care SPDR (XLV), has a market cap of $2.45 billion; its shares were traded at around $31.42 . The dividend yield of Select Sector Spdrhealth Care stocks is 1.8%.
No. 5: Consumer Discretionary SPDR (XLY), Buy: 0.82% of the portfolio - Total: 123,001 Shares
Consumer Discretionary SPDR (XLY) invests in industries such as automobiles and components, consumer durables, apparel, hotels, restaurants, leisure, media, and retailing. The Consumer Discretionary Select Sector SPDR was previously known as the Cyclical/Transportation Select Sector SPDR. The Index includes Viacom, Home Depot and AOL Time Warner.
Consumer Discretionary SPDR (XLY) has a market cap of $1.49 billion; its shares were traded at around $29.98 . The dividend yield of Select Sector Spdrconsumer Discretionary stocks is 1.2%.
Paul Tudor Jones added to Health Care names and EFT to his portfolio during 3Q09.
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