In mid May, Cliff Asness’s AQR Capital Management filed its 13F with the SEC, disclosing many of the fund’s long equity positions in U.S. stocks as of the end of March. We track 13Fs from hundreds of hedge funds as part of our work developing investment strategies; we have found, for example, that the most popular small cap stocks among hedge funds generate an average excess return of 18 percentage points per year (learn more about our small cap strategy). It can also be useful to review top picks from individual managers and use these names as a source of free investment ideas. Read on for our quick take on Cliff Asness’s AQR Capital Management’s five largest holdings from the filing or see the full list of Asness’s stock picks.
The top pick in AQR’s portfolio was Exxon Mobil Corporation (NYSE:XOM) with the filing disclosing ownership of 3.2 million shares. In the current market environment the oil majors are generally trading around 10 times earnings, and in the case of Exxon Mobil Corporation (NYSE:XOM) the forward P/E is 11. While the company’s earnings were about flat last quarter compared to the first quarter of 2012, its revenue was down by over 10%. The Bill and Melinda Gates Foundation Trust was the largest holder of Exxon Mobil Corporation (NYSE:XOM) out of the filers we track, with 7.6 million shares in its portfolio at the end of Q1 (research more stocks the trust owns).
Asness and his team were also major shareholders in Chevron Corporation (NYSE:CVX), demonstrating some degree of bullishness on oil and gas in our view. Of course, Chevron Corporation (NYSE:CVX) is also trading in value territory- analyst consensus for 2014 implies a forward earnings multiple of 10. We’d also note that the company is a potential income stock; its dividend yield of 3.3% is about half a percentage point higher than Exxon Mobil Corporation (NYSE:XOM)’s. Billionaire Ken Griffin’s Citadel Investment Group initiated a position of over 1 million shares in Chevron Corporation (NYSE:CVX) between January and March (research more stocks Citadel was buying).