Several weeks after the end of each fiscal quarter, the SEC requires hedge funds and many other major investors to file 13Fs which disclose many of their long equity positions in U.S. stocks as of the end of that quarter. While the information in these filings can be valuable- we have found, for example, that the most popular small cap stocks among hedge funds generate an average excess return of 18 percentage points per year (learn more about our small cap strategy)– we do also track more up to date information from 13D and 13G filings. These filings come shortly after an investor buys 5% of a company’s outstanding shares, and can therefore provide initial ideas from these investment managers for further research. Here are five stocks which hedge funds have bought recently:
Billionaire George Soros (check out more stocks Soros has been buying) reported a position of over 17 million shares in J.C. Penney Company, Inc. (NYSE:JCP), the troubled retailer backed by Bill Ackman’s Pershing Square. Revenue fell 25% in J.C. Penney Company, Inc. (NYSE:JCP)’s most recent fiscal year compared to the previous one, with resulting operating losses of about $1 billion; the CEO recently left the company following what has been a failed turnaround. Wall Street analysts are forecasting continued net losses this year and next year, though consensus is that the company will improve over that time frame. Soros’s involvement is interesting, but we still wouldn’t consider J.C. Penney Company, Inc. (NYSE:JCP) a buy right now.
Blue Mountain Capital Management, which is managed by Andrew Feldstein and Stephen Siderow, had not owned any shares on Lexmark International Inc (NYSE:LXK) at the beginning of 2013 but has since purchased 3.6 million shares, giving it 5.6% of the company. Find Blue Mountain’s favorite stocks from the beginning of this year. Lexmark rose after its Q1 results beat expectations, even though revenue was down 11% versus a year earlier and EPS fell by 36%. The sell-side is bullish, with the stock trading at 8 times forward earnings estimates, though we would be skeptical of their optimism. We would note that Lexmark International Inc (NYSE:LXK) pays a dividend yield of 4.7% at current prices and dividend levels.