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 Tudor Investment Corp in which Paul Tudor Jones (Trades, Portfolio) serve 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 $1.85 billion, up from $1.65 billion disclosed at the end of the previous quarter. Consequently, the fund's total return was 12.3% in the last quarter. The filing revealed that at the end of last year, the fund added 677 new positions to its equity portfolio, and sold out of 216 other companies. The top 10 portfolio holdings as of the end of the quarter represented 32.39%. The largest changes from previous 13-F´s fillings are in the industrials sector (5%) followed by consumer discretionary and materials (around 2% each).
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 General Electric Company (GE, Financial), in which Tudor disclosed a $16.2 million stake with over 579,080 shares. The company is serving customers in more than 100 countries and is one of the largest technology and financial services corporations in the world. More than 50% of total revenue is generated outside the U.S. The firm expects to have a “double digit" growth in the coming years in countries like China, or Algeria, where it signed three contracts to sell about $2.7 billion from a unit of Sonelgaz, Algeria’s national electricity and Gas Company. It has a proven commitment to returning cash to investors, with a current dividend yield of 3.13% which is considered good to protect investors' purchasing power. Other hedge fund gurus have also been active in the company. Louis Moore Bacon (Trades, Portfolio) and George Soros (Trades, Portfolio) have bought in it in fourth quarter 2013.
The Procter & Gamble Company (PG, Financial) comes in next, the fund owning over 106,370 shares, worth $8.6 million. The company reported a slightly increased 0.5% in revenues compared to the same quarter one year prior. The firm reported mixed fiscal second-quarter 2014 results beating the Zacks Consensus Estimate. Turning our attention to expansions plans, it is increasing its presence in the developing markets (39% in fiscal 2013). This is another company which returns cash to investors. The current dividend yield is 3.08%, which is considered good enough to protect the purchasing power. In fiscal 2013, the firm reduced its cost of goods and divested its underperforming bleach business in Italy, for example. These actions will improve productivity in 2014.
In AT&T Inc. (T, Financial) Tudor disclosed ownership of over 81,090 shares, worth $2.85 million. AT&T Inc. is one of the world's leading communications service carriers. The company operates in various segments: Wireless, Wireline and “Other.” The first one is the most important business for the company (about half of sales), and it is probably most well-known for its wireless cell phone services. The company is seeking opportunities to expand its wireless business in international markets: UK, Germany and the Netherlands.
Final Comment
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 Tudor’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.
