We like to track 13D and 13G filings from hedge funds because, while they only discuss how a fund or other notable investor is trading one stock, they are generally very recent and complement quarterly 13F filings very well. Investors cannot buy every stock that fund managers report buying, but reviewing recent buys might be useful in generating ideas or just seeing what hedge funds think about the markets. Here are five stocks that hedge funds and other notable investors have been buying recently:
Lone Pine Capital owned nearly 12 million shares of Dollar Tree, Inc. (NASDAQ:DLTR) according to a filing with the SEC. Lone Pine, which is managed by billionaire and Tiger Cub Stephen Mandel, had initiated a position in the stock during the third quarter and had owned 3.9 million shares at the beginning of October (check out Mandel’s stock picks). With Lone Pine having a large position in Dollar General as well, it appears that Mandel and his team are bullish on dollar stores. Dollar Tree trades at 16 times trailing earnings and, as might be expected, has a low beta of 0.2. With net income still growing strongly, and only a small valuation premium over Wal-Mart or Target, it might be a better retailer.
Prem Watsa, who has been called “the Warren Buffett of Canada” (see Watsa’s favorite stocks), bought still more shares of paper company Resolute Forest Products Inc (NYSE:RFP). His Fairfax Financial Holdings had owned about 19 million shares at the end of the third quarter, and now owns close to 26 million. Resolute’s revenue and operating income have been down, but the company isn’t recording as much in special charges and its earnings per share last quarter don’t look too bad compared to the stock price. We think it’s a good idea to watch the company to see if it can sustain its current business.