Billionaire Paul Tudor Jones’s Top Five Picks for 2013 Include Apple Inc. (AAPL), Fossil Inc (FOSL)

Page 1 of 2

By definition, hedge funds are often thought of as being an investment tool for elite investors capable of risking millions of dollars on high-risk and, often times, underperforming investments.  However, there are many hedge funds that are not only managed by some of the world’s most talented managers, but routinely outperform many of the more traditional funds. At Insider Monkey, we track 450 of the world’s most elite hedge fund managers and our research has shown that historically, there have been ways to beat the market if you pay attention.

For more than a decade in our back tests, our strategy outpaced the broader indices by 18% a year, and since we’ve started sharing these picks with the public, it has beaten the S&P 500 by more than 20% (learn how to use this strategy yourself).

TUDOR INVESTMENT CORPFurthermore, it’s also crucial to look at each of the funds we track individually, and by using the latest round of fourth quarter 13F data from the SEC, we can determine how the hedgies were preparing for 2013. Let’s take a look at one fund in particular: Paul Tudor Jones’s Tudor Investment Corp. Here are his top five equity positions beginning with No. 1.

Topping the list is Apple Inc. (NASDAQ:AAPL). There’s little argument that Apple has had a very rough start this year as shares are down more than 20% from the first of the year.  Part of the problem is the dearth of news coming from the tech-giant. Although rumors that the iWatch will be the next must-have gadget, the company is still eerily silent about what it plans to do with its $137 billion cash surplus. And with competition from Samsung’s Galaxy SIV, Apple Inc. (NASDAQ:AAPL)’s dominance in the smart phone market may be starting to fade.

However, things might be looking a bit more promising with the latest endorsement from Warren Buffett (see what Buffett has been buying) who advised Apple Inc. (NASDAQ:AAPL) CEO Tim Cook to start buying back shares at their currently depressed price. Since there is clearly nothing fundamentally wrong with Apple, the stock’s current price-to-book multiple of 3.2x versus the industry’s average of 3.8x indicates that it remains a good value play, and a dividend yield near 2.5% offers plenty of income for those who seek it.

Coming in at No. 2 is Vodafone Group Plc (ADR) (NASDAQ:VOD). Vodafone has had a tough start to the new year as well on what we suspect is not only its exposure to the fledgling European market, but on a lackluster earnings report last month. On the bright side, the company is hedged against any severe market swings in Europe with its Verizon stake, and shares are starting to inch their way off a 52-week low of $24.55 hit early last week. Tudor upped his stake by 817% last quarter, and there are plenty of reasons to believe Vodafone will see a bump this year, whether it’s the telecom giant’s emerging market expansion or its generally discounted price at current levels.

Third in Tudor’s equity portfolio is Abercrombie & Fitch Co. (NYSE:ANF).  After a disappointing earnings report last month, Abercrombie took a beating by dropping close to 13% in just over two days on a bleak full-year forecast. Not surprisingly, Tudor cut their exposure by 30% in the fourth quarter. Compared to its closest competitors American Eagle and The Gap, trading in Abercrombie at the moment looks absolutely anemic.  Although the retailer hopes that increased European exposure can boost sales, the notoriously fickle teen market with very few barriers to entry is easily infiltrated by the “next big thing,” à la Forever 21.

There are really only two names in the home improvement market, and one is Lowe’s Companies, Inc. (NYSE:LOW), sitting at fourth in Jones’s top five. Blindsided by Home Depot’s very strong sales report last month, Lowe’s tumbled to a one-month low of $35.86. Fortunately for bullish investors, the tailspin was very short-lived. Above the $38 mark now, the stock is climbing partially due to continued optimism over a recovery in the housing market, in addition to a weather-related boost in sales from Hurricane Sandy and winter storm activity. There’s little argument that Home Depot is the leader in home improvement sales, but Lowe’s maintains its niche among do-it-yourselfers that favor style over function.

Coming in at fifth is Fossil Inc (NASDAQ:FOSL).

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Largest Pharmaceutical Companies In the World

The 10 Most Expensive Android Apps

The 9 Most Expensive Designer Bags in the World

The 7 Most Expensive Real Estate in the World

The 10 Most Expensive eBay Items Ever Sold

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

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!