Christopher Medlock James’ Partner Fund Bullish on $GILD $WYN

Christopher Medlock James is the Managing Partner of Partner Fund Management. James cofounded the San Francisco-based fund in 2004 after spending six years in money management. Christopher James co-founded Andor Capital previously. Partner Fund Management has almost $5 billion in assets under management in four different fund. Partner Fund Management’s flagship fund returned 31% in 2007, lost 6% in 2008, gained 21% in 2009, and 4% in 2010. Christopher Medlock James is also the co-owner of the Medlock Ames winery at Bell Mountain. Partner Fund Management had $1.5 billion in its 13F fund at the end of December. That value is spread across 44 positions. This is fair difference from where the fund stood at the end of the third quarter, when it had 57 positions with a collective value of just under $1.10 billion – and those differences are even more pronounced in the actual holdings.

Gilead Sciences, Inc. (NASDAQ:GILD)

At the end of the third quarter, Partner Fund Management’s largest position was in Lowes (LOW). The fund held 5.36 million shares in the company, with a total value of $103.68 million. As of the end of the fourth quarter, Partner Fund Management’s position in Lowes was roughly half that, with just 2.59 million shares, at a value of $65.66 million. Instead, at the end of the fourth quarter, a new position in Gilead Sciences (GILD) was Partner Fund Management’s largest position. The fund had 3.89 million shares, or approximately $159.10 million, in the company.

Gilead, which is a top pick for both Samuel Isaly’s Orbimed Advisors and Dan Loeb’s Third Point, is a company that we can definitely get behind. When the markets opened on February 15, the company was trading at $54.88 with a one-year target estimate of $58.83 (range $45 to $67). Gilead was also priced low, at just 12.40 times its future earnings, and has low volatility – its beta is just 0.55. Over the last 52 weeks, the company has had great success, returning 38.51% versus the S&P 500’s 1.0%. Bristol-Myers Squibb (BMY), Gilead’s closest competitor has roughly the same upside – it opened at $31.84 on a one-year target estimate of $33.61 and pays a $1.36 dividend (4.30%) – but it isn’t priced nearly as well. Bristol-Myers Squibb has a high forward P/E of 16.43, and it hasn’t returned nearly as much. The company brought in just 24.32% over the last 52 weeks. It’s not that its numbers are bad necessarily; it’s just that they aren’t as good as Gilead’s.

Partner Fund Management’s second largest position at the end of the fourth quarter was in Wyndham Worldwide (WYN). The fund owned just under 3.10 million shares, or $117.24 million, in the company at the end of December. Wyndham opened trading on February 15 at $43.97 a share with a mean one-year target estimate of $48.23 (range $45 to $50). In addition to the upside, Wyndham pays a 60 cents dividend (1.40% yield). It is also priced low, trading at just 12.76 times its forward earnings, and has strong performance. Wyndham returned 36.59% over the last 52 weeks.

Compared to Marriott International (MAR), one of its top competitors, Wyndham shines even brighter. Marriott opened trading on February 15 at $35.22 a share with a one-year target estimate of $37.67. The company pays a dividend of 40 cents (1.10%) but it isn’t enough to make up for the lack of upside. Even more tellingly, Marriott is priced at 21.98 times its forward earnings and has lost over 15% in the last 52 weeks.

Christopher Medlock James’ Partner Fund was also bullish about Rockwell Automation (ROK), Caterpillar (CAT), American Tower (AMT), and Apple (AAPL) at the end of the fourth quarter. Apple is a no-brainer for a large proportion of equity hedge fund managers. When Apple was trading around $370 in early December, we had investors asking us whether Apple will close above $400 at the end of 2011. “There are no guarantees in the stock market, especially we can’t predict what will happen in the very short-term. However, Apple is trading at an extremely low forward PE ratio and the stock should perform well over the next few years,” we responded. Just in 2 short months Apple went up 40% but Apple’s story remains intact. Its earnings surprised to the upside and the stock is still cheap in relation to its forward PE multiples.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

The 10 Biggest Outlet Malls in USA

The 5 Most Popular Rap Songs of All Time

The 10 Countries that Eat the Most Meat

The10 Most Expensive Countries to Fly To

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!