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Greenhaven Associates Bearing With Top Picks Following Lackluster First Half of 2015

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Edgar Wachenheim‘s Greenhaven Associates is well known on the Street as a value-focused hedge fund with long-term investment horizon. The fund recently filed its 13F with the Securities and Exchange Commission (SEC) which revealed that, in-line with its investment philosophy, it made only minor changes in its equity portfolio in the second-quarter. Although being a long-term investor has its advantages for Greenhaven Associates like keeping the costs low, the fund’s holdings in companies with a market cap of over $1.0 billion returned 0.003% in the second-quarter and are up a meager 0.02% year-to-date.

The financial sector, followed by consumer discretionary, and transport were the top sectors, which amassed 30%, 23% and 23% of Greenhaven Associates’ $5.55 billion equity portfolio in the quarter ending June respectively. Following the first-quarter, FedEx Corporation (NYSE:FDX), Lowe’s Companies, Inc. (NYSE:LOW), and Goldman Sachs Group Inc (NYSE:GS) remained Greenhaven Associates top 3 picks in the second-quarter as well.


We pay attention to hedge funds’ moves because our research has shown that hedge funds are extremely talented at picking stocks on the long side of their portfolios. It is true that hedge fund investors have been underperforming the market in recent years. However, this was mainly because hedge funds’ short stock picks lost a ton of money during the bull market that started in March 2009. Hedge fund investors also paid an arm and a leg for the services that they received. We have been tracking the performance of hedge funds’ 15 most popular stock picks in real time since the end of August 2012. These stocks have returned 135% since then and outperformed the S&P 500 Index by around 80 percentage points (see the details). That’s why we believe it is important to pay attention to hedge fund sentiment; we also don’t like paying huge fees.

Edgar Wachenheim
Edgar Wachenheim
Greenhaven Associates

On the first spot in Greenhaven’s equity portfolio is the position in FedEx Corporation (NYSE:FDX), in which the investor owns 4.50 million shares, valued at $766.46 million as of the end of June. Even though, the investor sold around 48,600 shares during the second quarter, the holding moved up one position. According to recent reports, FedEx Corporation (NYSE:FDX) is in talks with Boeing Co. (NYSE:BA) to increase its fleet of 767 cargo freighters by at least 25 more planes. Analysts have a consensus ‘Overweight’ rating on the stock, with an average price target of $196.35. Mason Hawkins’ Southeastern Asset Management held the largest stake of 5.4 million shares of the company among the hedge funds we track at the end of first-quarter.

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