Every quarter, many money managers have to disclose what they’ve bought and sold, via “13F” filings. Their latest moves can shine a bright light on smart stock picks.
Today, let’s look at respected investing company Royce & Associates, founded in 1972 by Chuck Royce, who is known as a small-cap guru. The company’s flagship fund is its Pennsylvania Mutual (PENNX), which has averaged close to 14% annually since its inception more than 40 years ago. That’s darn impressive. Per the folks at gurufocus.com, its Premier Fund (RYPRX) has grown by 833% over the past 20 years, vs. 388% for the S&P 500. Royce’s approach is one of long-term value investing.
The company’s reportable stock portfolio totaled $32.4 billion in value as of June 30, 2013.
So what does Royce’s latest quarterly 13F filing tell us? Here are a few interesting details:
The biggest new holdings include Microsemi and Beacon Roofing Supply. Other new holdings of interest include Capstone Turbine Corporation (NASDAQ:CPST). Capstone Turbine Corporation (NASDAQ:CPST) is a smallish company, making low-emission microturbines used in power generation. Its top line has been growing by double-digits over the past few years, but its just-reported first quarter featured revenue down a bit, and net losses, though the losses have generally been shrinking in recent years. Capstone Turbine Corporation (NASDAQ:CPST) has announced a bunch of promising deals, and its order backlog has been hitting record highs. Bears worry about the threat posed by the growth in residential solar power.
Among holdings in which Royce & Associates increased its stake were Penn West Petroleum Ltd (USA) (NYSE:PWE) and InvenSense Inc (NYSE:INVN). Penn West Petroleum Ltd (USA) (NYSE:PWE), which drills for oil and gas, has been struggling in an environment of low natural gas prices. Its recent second quarter featured revenue down 33%, though that was ahead of analyst estimates, and earnings improving, though remaining in the red. Its stock featured a dividend yield near 8% recently, but that has been reduced to the 5% neighborhood.
InvenSense Inc (NYSE:INVN), a leader in the motion-sensor market, supplies millions of smartphones and tablets. Its last quarter featured revenue up 43%, and the CEO noting that, “Customer design activity and confirmed design wins at customers has never been stronger.” Better still, he expects the good times to keep on rolling in the coming quarter. Bulls like its innovation, and see its technology being added to millions of iDevices.