Edgar Wachenheim manages a fairly small-scale operation at Greenhaven Associates considering the size of its assets under management: billions of dollars are capital are invested through the fund, but because of its long-term investing horizon and its tendency towards a concentrated portfolio (we only count 19 positions worth over $10 million in Greenhaven’s most recent 13F filing, 12 of which were over $100 million) only a small number of analysts are needed. Wachenheim also stands out as an investor who has groomed other fund managers; for example, Chieftain Capital and Brave Warrior Capital are both managed by Greenhaven alumni.
Wachenheim’s investment process begins by assumed that a low-priced stock is that way because of problems in the business which the market believes to be permanent (or at least long term). The question then becomes whether the market is correct- in which case the stock should be discarded as a potential investment- or if in fact the problems are short term in nature. Sometimes an entire industry or industry segment is afflicted by a short-term problem and so Greenhaven can then capitalize even further by investing in a larger theme. The most recent 13F filing shows that Wachenheim and his team were overweight stocks in the services and basic materials sectors, as they have been for most of the last year. Read on to see the fund’s top five picks (the data is over three months old, but the size of Greenhaven’s positions tends to not change much from quarter to quarter and so we’d guess that the fund still has large positions in these companies) or see the full list of stocks Greenhaven reported owning.
FedEx Corporation (NYSE:FDX). Wachenheim’s top pick, at 4.6 million shares or about 12% of the total capital invested in 13F stocks, FedEx experienced a 12% decline in earnings in its most recent fiscal quarter compared to the same period in the previous fiscal year. Southeastern Asset Management, which is managed by Mason Hawkins, had $1.4 billion invested in the stock at the end of the quarter (find more stocks Southeastern had over $1 billion invested in). The trailing P/E at FedEx is 16.
Read about Lowe's and three more stock picks: