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First Eagle Investment Management Unveils Its Top Picks

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First Eagle Investment Management has added fervor to the filing season as it recently submitted its 13F form to the Securities and Exchange Commission for the latest reporting period. Founded in 1864 in Dresden, First Eagle is one of the oldest investment firms in the world. The legendary value investor Jean-Marie Eveillard is its Senior Vice President and a member of its Board of Trustees while John Arnold is its current Chairman and Chief Investment Officer.



Assets under the fund’s management amounted to $100 billion at the end of the first quarter. The market value of its equity portfolio stood at $41.98 billion, with technology, materials and consumer discretionary being the three largest contributing sectors. The fund uses a bottom-up approach to sift through global securities including those in emerging markets to find the best value-investment picks. With a total of 327 equity positions and its top ten holdings representing just 26.62% of the portfolio’s value, the fund is well balanced. The top three holdings at the end of the last quarter were Oracle Corporation (NYSE:ORCL), Microsoft Corporation (NASDAQ:MSFT), and Comcast Corporation (NASDAQ:CMCSK).

Insider Monkey tracks hedge funds’ moves in order to identify actionable patterns and profit from them. Our research has shown that hedge funds’ large-cap stock picks historically delivered a monthly alpha of 6 basis points, though these stocks underperformed the S&P 500 Total Return Index by an average of 7 basis points per month between 1999 and 2012. On the other hand, the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Index by an average of 95 basis points per month. These stocks were slightly riskier, so their monthly alpha was 80 basis points (read the details here). We believe investors will be better off by focusing on small-cap stocks rather than large-cap stocks, as our extensive research has proven.

Coming back to First Eagle’s portfolio, the fund increased its largest holding, in Oracle Corporation (NYSE:ORCL), by 10% during the quarter to 37.60 million shares valued at $1.62 billion. The technology company is down by about 2% year-to-date, despite the technology sector itself appreciating by 9.77% during the same period. Oracle, which is one of the biggest software companies in the World, was in the news recently in connection with the rumors that the company was going to acquire (NYSE:CRM), the customer relationship management firm which has a strong presence in cloud computing. Oracle has set its eyes on another target instead, which is to reach the $1 billion recurring revenue mark from its cloud services in the current fiscal year. Oracle Corporation (NYSE:ORCL) recently announced that 95% of its products and services will be available to its customers through the mighty power of the cloud by October. Considering the strengthening revenues from this segment in the last two quarters, the technology company will soon prove to be a worthy competitor to the giants in the cloud space like, Inc. (NASDAQ:AMZN) and Microsoft Corporation (NASDAQ:MSFT). Among other investors of the company are Boykin Curry’s Eagle Capital Management, which held 45.21 million as of the end of 2014, and Richard S. Pzena‘s Pzena Investment Management, which held 11.80 million shares of Oracle Corporation (NYSE:ORCL) at the end of the first quarter.

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