In a career spanning over three and a half decades, billionaire Steve Cohen has made a name for himself as being one of the best traders in the world. His erstwhile hedge fund, SAC Capital – before it shut down in 2013 – was considered one of the most revered names on the Street. Although Mr. Cohen doesn’t manage outside capital anymore, his family office Point72 Asset Management still sports a considerable amount of money. According to Point72’s latest 13F filing, its US equity portfolio at the end of September 2015 was worth nearly $12.74 billion, 11.7% lower than what it was worth at the end of June, 2015.
The filing also revealed that the family office had a high quarter-over-quarter turnover of 74.83% during the third quarter and that its top 10 equity holdings at the end of September accounted for 13.70% of the value of its portfolio. Given Mr. Cohen’s reputation as a maverick equity trader, it is hard for many people to associate the term dividend or fixed income with him. However, there are several dividend stocks that Mr. Cohen has placed his bets on in the past and still continues to do that. With this in mind, we have selected several stocks from Point72’s latest 13F filing that sport a considerable dividend yield.
We track hedge funds and prominent investors because our research has shown that historically their stock picks delivered superior risk-adjusted returns. This is especially true in the small-cap space. The 50 most popular large-cap stocks among hedge funds had a monthly alpha of about 6 basis points per month between 1999 and 2012; however the 15 most popular small-cap stocks delivered a monthly alpha of 80 basis points during the same period. This means investors would have generated 10 percentage points of alpha per year simply by imitating hedge funds’ top 15 small-cap ideas. We have been tracking the performance of these stocks since the end of August 2012 in real time and these stocks beat the market by 53 percentage points (102% return vs. S&P 500’s 49% gain) over the last 39 months (see the details here).
#5 Coach Inc (NYSE:COH)
– Shares Owned by Point72 Asset Management (as of September 30): 3.02 Million
– Value of Holding (as of September 30): $87.5 Million
Point72 Asset Management not only increased its stake in luxury retailer Coach Inc (NYSE:COH) by 16% during the third quarter, but also purchased 100,000 Call options on the stock during the same period. Mr. Cohen was not the only billionaire who was bullish on the company during the third quarter as the ownership of Coach Inc (NYSE:COH) among the billionaire investors covered by Insider Monkey saw a 100% quarter-over-quarter rise to eight at the end of September. While billionaires were lapping up shares of the company, several hedge funds were fleeing the stock. The number of hedge funds covered by Insider Monkey that held a stake in Coach Inc declined by eight during the third quarter to 27. Shares of Coach Inc have been on a gradual decline since 2012, which has helped in pushing its annual dividend yield to over 4% currently. Despite the decline in its stock price, Coach Inc currently trades at a forward price to earnings multiple of 15.70, which is considerably higher than its peers. Recently analysts at BB&T Corp. have upgraded the stock to ‘Hold’ from ‘Underweight’. Billionaire Jim Simons‘ Renaissance Technologies initiated a stake in Coach Inc during the third quarter by purchasing slightly above 1.0 million shares of the company.