$28 Billion Hedge Fund Winton Capital’s Top Stock Picks for 2013: Consolidated Edison, Inc. (ED), Verizon Communications Inc. (VZ), Eli Lilly & Co. (LLY)

Page 1 of 2

Winton Capital was founded by David Harding in 1997. Primarily a quantitative fund, it had over $25 billion in assets under management roughly a year ago. Winton recently filed its 13F for the end of December 2012, disclosing many of its long equity positions going into this year. We use 13F filings to develop investment strategies (read about why you should buy the most popular small cap stocks among hedge funds) and also to provide a quick overview of a manager’s top picks so that investors can do more research if the stock sounds appealing. Read on for our thoughts on Winton’s five largest positions and compare them to previous filings.

David Harding

The fund’s top pick was Consolidated Edison, Inc. (NYSE:ED) with about 780,000 shares in its portfolio at the beginning of 2013. The $17 billion market cap company shares a couple attributes with many other utilities: it has a low beta (0.1) and a relatively high dividend yield (a little over 4% at recent dividend levels and current prices). This makes it a good prospect for income or defensive investors. Consolidated Edison, Inc. (NYSE:ED) also trades at 15 times earnings, on either a trailing or a forward basis, and while that might not be quite low enough for a value investor those who do like it for its dividends should be satisfied that it is not overvalued enough to pose much of a risk to their principal.

Harding and his team liked Verizon Communications Inc. (NYSE:VZ), upping their stake to about 960,000 shares from about 840,000 three months earlier. Verizon also has little exposure to the broader economy, as demonstrated by its beta of 0.4, and also offers a high dividend yield (we would place the yield at about 4.5%). Revenue was up slightly last quarter compared to the fourth quarter of 2011. Analyst consensus for 2014 implies a forward earnings multiple of 14. We don’t find Verizon Communications Inc. (NYSE:VZ) particularly appealing but could see comparing it to other telecoms including Vodafone, which has a substantial stake in Verizon Wireless.

Eli Lilly & Co. (NYSE:LLY) was another of Winton’s largest holdings. The $60 billion market cap drug manufacturer is yet another stock aimed at more conservative investors as the beta is 0.4 and the dividend yield is 3.6% going by recent dividend payments. Sales dipped slightly in the fourth quarter of 2012 versus a year earlier, causing a 4% decline in net income. Wall Street analysts expect a decline in earnings to continue and so the forward P/E comes out to 19. We would avoid the stock.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!