In May, billionaire Stanley Druckenmiller- the former manager of Duquesne Capital, though he may be better known as one of George Soros’s portfolio managers- filed his 13F for the first quarter of 2013 with the SEC. We track these filings, which disclose many of a hedge fund or other notable investor’s long equity positions as of the end of the previous quarter, using the results to help us develop investment strategies. For example, we have found that the most popular small cap stocks among hedge funds earn an average excess return of 18 percentage points per year (learn more about our small cap strategy). We can also screen filings from top managers according to a number of criteria, including dividend stocks, so that investors can pursue any initial ideas which strike their fancy. Read on for Druckenmiller’s five largest holdings as of the end of March which currently pay dividend yields of at least 3% (or see the full list of stocks he reported owning):
One of the billionaire’s top picks overall was Pfizer Inc. (NYSE:PFE), at 3.4 million shares. Pfizer Inc. (NYSE:PFE)’s dividend yield is 3.3%, following an increase in quarterly dividend payments at the beginning of 2013 to 24 cents per share. The trailing P/E of 14 is somewhat low, though in its most recent quarter the company’s revenue fell 9% compared to the same period in the previous year. Pfizer Inc. (NYSE:PFE) had been billionaire Ken Fisher’s top stock pick for 2013 (its performance has roughly matched that of the market year to date) with his Fisher Asset Management owning nearly 31 million shares at the end of Q1 (find Fisher’s favorite stocks).
Another large pharmaceutical company, Eli Lilly & Co. (NYSE:LLY) joined Pfizer Inc. (NYSE:PFE) as a high yield stock (the current yield here is nearly 4%) among Druckenmiller’s five largest single-stock positions. Eli Lilly also makes an interesting target for defensive investors, with a beta of only 0.4 suggesting little dependence on the broader economy. Analysts are looking for a decline in EPS next year compared to the trailing numbers, however. Renaissance Technologies, whose founder Jim Simons has since become a multi-billionaire, had close to 11 million shares in its portfolio per its 13F (check out Renaissance’s stock picks).
Personal products and pharmaceuticals company Johnson & Johnson (NYSE:JNJ) was another of Druckenmiller’s dividend picks with the filing disclosing ownership of about 720,000 shares. As with Eli Lilly, the beta here is 0.4, with Johnson & Johnson paying a dividend yield just over 3%. While the trailing earnings multiple is high, the sell-side is bullish on EPS growth for 2014 resulting in a forward P/E of only 14. We’d be skeptical, however, seeing as earnings have been down recently. Platinum Asset Management owned 2.8 million shares at the beginning of April; that hedge fund is managed by billionaire Kerr Neilson.