Didn’t Go to Harvard? At Least You Can See What They’re Buying

Harvard Management Co, run by Yale alum Jane Medillo, is the wholly-owned subsidiary of Harvard University and is one of the 11,000 funds that help manage Harvard’s working capital, pension and massive $32 billion endowment fund. Harvard’s endowment dwarfs the $17 billion endowment fund for Princeton, and $19 billion for Yale. With over $1 billion under her management in the equity portfolio alone, Medillo seems to prefer consumer goods and technology stocks, according to her latest 13F filing with the SEC. Because hedge fund sentiment has been a very, very good tool to beat the market, it’s worth, then, taking a look at Medillo and her team’s top five favorite stocks.

Let’s get started.

Worth 2.5 million shares and 5% of the equity portfolio, Pebblebrook Hotel Trust (NYSE:PEB) takes the top position. The hotel investment company, structured as a REIT, recently announced that it would pay a dividend of $0.16 per share, an increase of 33% from the fourth quarter dividend. The stock also benefits from being a REIT, as well as a 33% increase in revenue for the fourth quarter, which helped boost the company’s bottom line 75% to $26.1 million (qoq). Pebblebrook Hotel Trust (NYSE:PEB) is trading in the $25 to $26 range, which is at the top end of its 52-week spread of $19.17 to $26.07.  It remains to be seen if the stock can arrange a breakout, but it seems that at least one mega-fund thinks it can.

Ralcorp Holdings Inc (RAH)

Second of this top five is Ralcorp Holdings, Inc (NYSE:RAH), a new addition to the fund worth 520,000 shares initially. On January 29th, ConAgra Foods, Inc. (NYSE:CAG) announced its acquisition of Ralcorp Holdings, Inc (NYSE:RAH) for $90.00 per share. This makes the combined company one of the largest packaged food players in North America. At the end of 2012, Ralcorp Holdings, Inc (NYSE:RAH) closed at $89.65, so if Harvard Management bought its shares in Ralcorp Holdings, Inc (NYSE:RAH) on the last day of the quarter, their profit at the time of the sale would have amounted to a cool $182K.

At number three is Warnaco Group Inc (NYSE:WRC), another new addition to the Harvard fund last quarter with 591,261 shares, and yet another buyout play. Warnaco Group Inc (NYSE:WRC) was bought in February by PVH Corp (NYSE:PVH), owner of the Calvin Klein and Tommy Hilfiger brands, for $2.9 billion, which comes to $51.75 per share. In other words, this was 0.18 of a share in PVH Corp (NYSE:PVH) stock for each share of Warnaco Group Inc (NYSE:WRC).  So, given the terms of the deal, each share of Warnaco Group Inc (NYSE:WRC) was worth about $73.44.  If Medillo bought WRC on December 31st of last year, she would have made approximately $1,105,658 on the deal.

Number four is Teavana Holdings, Inc. (NYSE:TEA), yet another new position at 2.4 million shares and another acquisition, this time by Starbucks Corporation (NASDAQ:SBUX) for $620 million. The pairing of the tea-seller and coffee behemoth seems as natural as if Nike bought sock-maker Hanes. Given recent acquisitions by Starbucks Corporation (NASDAQ:SBUX) for bakery chain La Boulange and juice maker Evolution, it seems obvious that Starbucks Corporation (NASDAQ:SBUX) is branching out from just coffee. For shareholders of Teavana Holdings, Inc. (NYSE:TEA), the deal gives then $15.50 in cash for each share.

Last but not least, at 3.57% of the Harvard portfolio is Hudson City Bancorp, Inc. (NASDAQ:HCBK).  The stock has traded in a fairly narrow range since the start of the year, but has still managed to hold onto last summer’s rally following the announcement that Hudson City Bancorp, Inc. (NASDAQ:HCBK) will merge with M&T Bank Corporation (NYSE:MTB). Under the terms of the deal, each Hudson City Bancorp, Inc. (NASDAQ:HCBK) share will receive consideration valued at 0.084 of an M&T share in either cash or stock.  Hudson City Bancorp, Inc. (NASDAQ:HCBK) last traded at $8.51, while M&T Bank was last trading almost $1 higher at $101.73.

Jane Medillo clearly has a knack for finding companies that are ripe for buy-outs and mergers, which has added considerably to Harvard Management’s net worth. Of the top five stocks in the portfolio, four have been bought out or merged during the first quarter of 2013 and three were new additions to the fund.  Looking at the other positions in the fund, there are at least three others than are either buyout candidates (Kayak Software Corp. (NASDAQ:KYAK) by Priceline.com Inc (NASDAQ:PCLN)) or have already been purchased, like Epoch by TD Bank, and Spartech Corporation (NYSE:SEH) by PolyOne Corporation (NYSE:POL).

Because of Medillo’s track record, retail investors should always pay attention; learn how much some readers have made by mimicking hedge fund sentiment.

Disclosure: none

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

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Top 10 Jobs for 2014 by Salary Gain (Predictions)

Top 5 Digital Trends for 2014

Top 6 Things You Can Do To Increase Your Productivity

Top 9 Trending Smartphones in 2013

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!