In May, billionaire Richard Chilton’s Chilton Investment Company filed its 13F for the first quarter of 2013 with the SEC, disclosing many of its long equity positions as of the end of March. While the information in 13Fs is a bit old by the time it is released, we think there are still a couple of ways for investors to use them in their decision making process. For one, we’ve actually 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 can also screen individual managers’ picks for stocks satisfying a number of criteria, including moderate to high dividend yields. Read on for our thoughts on the five largest holdings in Chilton’s 13F portfolio with dividend yields of 3% or higher or see the full list of stocks the fund reported owning.
Chilton and his team cut their stake in McDonald’s Corporation (NYSE:MCD) by over 30% but still owned over 530,000 shares at the beginning of April. At current prices the quick service restaurant yields 3.1%, and its valuation of 18 times trailing earnings represents a considerably discount to where many of its peers trade. However, revenue and earnings at McDonald’s Corporation (NYSE:MCD) were essentially flat in the first quarter of 2013 versus a year earlier. We’d note that the stock’s beta is only 0.3. The Bill and Melinda Gates Foundation Trust owned almost 10 million shares according to its own 13F (check out more stocks the trust owns).
The fund reported a position of about 420,000 shares in oil supermajor Chevron Corporation (NYSE:CVX). While the company’s revenue and net income have been down going by recent reports, markets actually look like they are pricing in declines in earnings per share going forward as the trailing and forward P/Es both come out to 9. As such Chevron Corporation (NYSE:CVX) might be worth considering as a value play, and there is a 3.3% annual yield as well. Billionaire Ken Fisher’s Fisher Asset Management had 3.6 million shares of Chevron in its portfolio at the end of Q1 (find Fisher’s favorite stocks).