Editor’s Note: Related tickers: Cisco Systems, Inc. (NASDAQ:CSCO), Seagate Technology PLC (NASDAQ:STX), NVIDIA Corporation (NASDAQ:NVDA), Activision Blizzard, Inc. (NASDAQ:ATVI), Apple Inc. (NASDAQ:AAPL)
We track quarterly 13F filings from hundreds of hedge funds and other notable investors, including Joel Greenblatt; the former manager of Gotham Capital, Greenblatt has since become better known as the author of investing books (including You Can Be A Stock Market Genius) and the founder of the Value Investors Club. While our primary use of 13Fs is in our work developing investment strategies (we have found, for example, that the most popular small cap stocks among hedge funds outperform the S&P 500 by an average of 18 percentage points per year), we can also review top managers’ picks in a number of areas. Read on for our thoughts on Greenblatt’s five largest tech picks as of the end of March and compare them to previous filings.
According to the 13F, Greenblatt owned over 770,000 shares of Cisco Systems, Inc. (NASDAQ:CSCO) at the beginning of April. The third quarter of Cisco Systems, Inc. (NASDAQ:CSCO)’s fiscal year ended in April; the company’s revenue rose 5% compared to the same period in the previous fiscal year, with net income coming in 15% higher. With the stock actually looking somewhat cheap- its trailing and forward earnings multiples are 14 and 12 respectively- it looks like a potential value play to us. Billionaire Ken Fisher’s Fisher Asset Management reported a position of over 36 million shares in Cisco Systems, Inc. (NASDAQ:CSCO) on its own 13F (find Fisher’s favorite stocks).
Greenblatt initiated a position of about 440,000 shares in Seagate Technology PLC (NASDAQ:STX), the $16 billion market cap hard disk drive company. The stock price has risen almost 90% in the last year- while business has been poor (revenue is down over 20% compared to a year ago), Seagate Technology PLC (NASDAQ:STX) has actually increased its dividend payments and the current yield is 3.5%. Earnings multiples are also low, though we’d be concerned about competition from cloud-based storage. Cliff Asness’s AQR Capital Management bought 3.7 million shares of Seagate Technology PLC (NASDAQ:STX) last quarter, after not having owned any shares at the beginning of the year (research more stocks AQR was buying).