Ken Fisher is one of the 400 richest people in the United States, drawing his wealth from his books on money management and from his work at Fisher Asset Management. The large fund recently filed its 13F for the second quarter of 2012 with the SEC. We covered the top holdings in Fisher Asset Management’s portfolio according to its recently released 13F filing for the second quarter of 2012, and found that none of those stocks had large changes in position from last quarter. While this is interesting in itself, we decided to look a little further deeper in the filings and pick out the six largest new positions in Fisher’s portfolio. Fisher Asset Management doesn’t recommend or endorse any of the stocks or analysis in this article, and we have no relationship with the fund, but based on SEC filings these are our opinions of what they are thinking. Read on to see the fund’s largest new positions or compare them to previous portfolio filings.
Fisher’s largest new holding according to the 13F was Priceline.com (NASDAQ:PCLN), which made our list of the ten most popular services stocks among hedge funds in the first quarter of the year. The fund bought about 600,000 shares of the travel services company, which has risen 33% over the last year due to strong growth and the fact that it has beaten earnings estimates for four quarters in a row. Sell-side analysts are now at the point where they are estimating a forward P/E of 16 for the company, compared to its trailing P/E of 29, meaning that if the stock continues to beat estimates it will more than justify its current price.
The second and third largest new holdings in Fisher’s portfolio have a common theme that investors should pay close attention to: big spenders. Fisher initiated a 12.9 million share position in Louis Vuitton and a 9 million share position in Las Vegas Sands Corp. (NYSE:LVS). Considering the discussion of a global economic slowdown, particularly in China (a crucial market for both companies), this is a bold stance for Fisher to take. Stephen Mandel’s Lone Pine Capital was another major investor in Las Vegas Sands Corp. (NYSE:LVS) according to that fund’s 13F for the first quarter.
Combining both themes that have been mentioned thus far, Fisher also initiated a 6.6 million share position in luxury/business travel focused payment company American Express (NYSE:AXP), making this the fund’s fourth largest new holding. American Express experienced very low growth in its most recent quarter compared to the same quarter in 2011 but trades at value stock levels with a trailing P/E of 13 and a forward P/E of 12. American Express is also Warren Buffett’s credit card stock of choice, with Berkshire Hathaway owning over 150 million shares at the end of March.
Salesforce.com Inc. (NYSE:CRM) was the fifth largest new position that Fisher Asset Management took in the second quarter of 2012. The fund bought 2.7 million shares of the sales and customer relationship management company, which is up about 20% so far this year. Salesforce.com Inc (NYSE:CRM)’s revenue growth has been strong- 38% in the most recent reported quarter compared to the same period the previous year- but its price assumes considerable growth in the future with a forward P/E of 62 and a five-year PEG of 3.
Finally, HSBC Holdings Plc (NYSE:HBC) joined the Fisher portfolio in the form of an 8.2 million share position. HSBC Holdings Plc (NYSE:HBC) is currently dealing with a scandal involving money laundering services provided to Mexican drug lords, and may have legal problems as a result of the LIBOR manipulation scandal as well. The stock price has held up well, however, as it is up on the year and only slightly underperforming the S&P 500. It trades at just under book value and pays a 4.3% dividend yield.
While Fisher’s largest positions were generally constant, the fund’s new positions look quite bullish on global and Chinese growth as well as on the travel industry. These purchases give the portfolio quite a bit of downside risk if markets slide, and therefore serve as a vote of confidence for stocks in general.