Billionaire Israel Englander’s New Stock Picks Include Aetna Inc. (AET)

Page 1 of 2

Millennium Management, a hedge fund managed by billionaire Israel Englander, filed its 13F for the first quarter of 2013 with the SEC in May. This most recent round of filings disclosed many of hedge funds’ long equity positions in U.S. stocks as of the end of March. Even with the information being somewhat old, we’ve found that the most popular small cap stocks among hedge funds outperform the S&P 500 by an average of 18 percentage points per year, and we think that more strategies are possible as well. We also like to go through individual filings and see which stocks were added to the portfolio over the previous quarter. Here are our thoughts on five of Millennium’s largest new positions from the 13F (or see the full list of Englander’s stock picks):

The fund bought 1.8 million shares of Virgin Media Inc. (NASDAQ:VMED) during the first quarter of the year. Liberty Global has announced plans to merge with Virgin Media Inc. (NASDAQ:VMED), creating a merger arbitrage opportunity. Many hedge funds like to invest in merger arbitrage situations since the return on these investments depends entirely on the transaction closing, reducing market exposure; hedge funds can generally apply a good deal of leverage to their position resulting in high returns (particularly on an annualized basis).

MILLENNIUM MANAGEMENTMillennium initiated a position of a little over 1 million shares in health insurance company Aetna Inc. (NYSE:AET). In the first quarter of 2013, Aetna Inc. (NYSE:AET)’s revenue grew by 7% but thanks to compression in its net margins the company’s earnings actually fell slightly. Wall Street analysts expect that trend to reverse, and are actually looking for decent increases in EPS going forward. With the stock trading at 13 times trailing earnings as is, the Street’s bullishness pulls the forward P/E down to 9. Billionaire David Einhorn’s Greenlight Capital had 6.5 million shares of Aetna Inc. (NYSE:AET) in its portfolio according to that fund;s own 13F (find Einhorn’s favorite stocks).

Expeditors International of Washington (NASDAQ:EXPD) was another of Englander’s new stock picks with the filing disclosing ownership of 1.4 million shares of the $7.8 billion market cap logistics company. The market is pricing in high growth at Expeditors International of Washington (NASDAQ:EXPD); specifically, the trailing earnings multiple is 24. However, recent financial results have not been in line with this expectation: last quarter sales were about flat compared to the first quarter of 2012 while growth on the bottom line was only 5%. Even with the sell-side calling for improvements in earnings over the next year and a half, 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

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

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

Top 6 Cities For The Ultra Rich to Live in Comfort

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

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!