Six to seven weeks after the end of each quarter, hedge funds file 13Fs with the SEC to disclose many of their long equity positions as of the end of that quarter. Even with the inherent delay, it is still possible to use this information to develop investment strategies, as we have done in finding that the most popular small cap stocks among hedge funds earn an average excess return of 18 percentage points per year. Still, many investors prefer more up-to-date, even if much less comprehensive, information on hedge fund moves. Funds file 13Ds or 13Gs relatively quickly after taking a 5% stake in a company (note that this generally limits coverage to small-cap and occasionally mid-cap stocks); here are five stocks that hedge funds have reported buying recently:
Billionaire Steve Cohen’s SAC Capital Advisors has increased its stake in coal producer Walter Energy, Inc. (NYSE:WLT) to a total of 3.3 million shares, roughly double what it owned at the beginning of January. Find Cohen’s favorite stocks from the end of Q4. Walter primarily produces metallurgical coal for steel companies, but also mines thermal coal and other minerals. Even after adding back a large goodwill impairment operating income came in much lower in 2012 than in 2011, as both segments of the coal industry suffer from weak demand.
Cohen and his team have also been buying children’s apparel company Carter’s, Inc. (NYSE:CRI), which reported double-digit growth rates of both revenue and earnings last quarter compared to the fourth quarter of 2011. The market is pricing in continued growth with the stock trading at 21 times trailing earnings. While the company’s numbers have been good, when we looked at large apparel retailers we noticed that they too have been experiencing strong growth and have cheaper valuations; they might be better places to start looking for value opportunities. See which peers we thought looked more interesting.
Read on for one more stock Cohen liked, and two more seeing hedge fund purchases: