Activist Relational Investors’ Top Stock Picks

Relational Investors, managed by Ralph Whitworth, makes strategic block investments with the intent of making major profits. Its equity portfolio has decreased to $5.53 billion for the quarter ending December 31, 2013 as compared to $5.80 billion for the previous quarter. The fund has added one new position and sold out three other holdings. The fund’s top five holdings are in Hewlett-Packard Company (NYSE:HPQ), SPX Corporation (NYSE:SPW), Mondelez International Inc. (NASDAQ:MDLZ), Bunge Limited (NYSE:BG), and The Timken Company (NYSE:TKR). These top five holdings amass around 55% of the value of the portfolio.

Ralph Whitworth

Relational Investors holds 29.84 million shares, worth $834.83 million in Hewlett-Packard Company (NYSE:HPQ). The fund has reduced its stake by 2.90 million shares in the fourth quarter. The CEO of HP, Meg Whitman, is trying to reduce dependence on central areas of its business like printers, PCs and storage and wants the company to focus its strategies and efforts on the emerging lines of cloud computing, network building as well as tablets.

The next biggest holding is in SPX Corporation (NYSE:SPW). Relational Investors holds 7.04 million shares worth $700.77 million in the company. The fourth quarter results saw the company declare earnings of $1.85 per share against a loss of $5.56 for the same period last year. Revenues slid by 3.4% to $1.32 billion against $1.37 billion for the prior year quarter.

The third largest holding, according to the latest 13F filing, is in Mondelez International Inc (NASDAQ:MDLZ). The fund holds 16.33 million shares worth $576.40 million in the company.  The fund has reduced its holding by approximately 800,000 shares during the fourth quarter. Mondelez reported revenues of $35.3 billion in 2013, up by 0.8% over the year. Diluted earnings were $2.19 per share.

Another company in which the fund has reduced its holding in the fourth quarter is Bunge Ltd (NYSE:BG). The fund sold approximately 200,000 shares and held 5.81 million shares, worth $476.75 million as per the latest 13F filing. Bunge declared its full fiscal year financial results recently. Net income totaled $306 million, up sharply from $64 million reported for 2012.

On the fifth spot is The Timken Company (NYSE:TKR). The fund increased the stake by 750,000 shares and now holds 8.26 million shares, worth $454.69 million at the end of the fourth quarter. The Timken is planning to spin off the steel business into a separate publicly traded company and in this regard, it’s wholly owned subsidiary Timken Steel Corporation has filed an initial Form 10 Registration Statement with the U.S. Securities and Exchange commission.

Disclosure: None

Recommended Reading:

Billionaire Julian Robertson’s Top Stock Picks: Himax Technologies, Inc. (ADR) (HIMX), Valero Energy Corporation (VLO) & Others

Hess Corp. (HES), Intel Corporation (INTC) Are Among Largest Holdings in Michael Price’ MFP Investors’ Latest 13F

Wallace R. Weitz Top Picks: Liberty Global plc (LBTYA), Berkshire Hathaway Inc. (BRK.B) & Others

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