Kodiak Oil & Gas Corp (USA) (KOG), Brocade Communications Systems, Inc. (BRCD): Here’s What This 220% Gainer Has Been Buying and Selling

Every quarter, many money managers have to disclose what they’ve bought and sold, via “13F” filings. Their latest moves can shine a bright light on smart stock picks.

Today let’s look at Passport Capital, founded by John Burbank in 2000 and known for combining macroeconomic analysis and fundamental research. Burbank himself is famous for having called the subprime mortgage crisis and reportedly earned a 220% return on it in 2007 — though he lost 50% the following year. The company’s Passport Global Fund has averaged annual gains of about 18% since inception (versus only 2% for the S&P 500 over the same period).

The company’s reportable stock portfolio totaled $2.5 billion in value as of March 31.

Interesting developments
So what does Passport Capital’s latest quarterly 13F filing tell us? Here are a few interesting details.

The biggest new holdings are McGraw Hill Financial Inc (NYSE:MHFI) and industrial machinery specialist Gardner Denver, Inc. (NYSE:GDI). Other new holdings of interest include Kodiak Oil & Gas Corp (USA) (NYSE:KOG) and Brocade Communications Systems, Inc. (NASDAQ:BRCD). Kodiak Oil & Gas Corp (USA) (NYSE:KOG) recently bought 42,000 acres in the productive Bakken region, upping its assets there by 27%, and adding thousands of new barrels of oil to its production levels. Bulls love Kodiak Oil & Gas Corp (USA) (NYSE:KOG)‘s rapid growth and see more room to grow. Bears worry that it might be too focused on the Bakken and not sufficiently diversified.

Networking storage specialist Brocade Communications Systems, Inc. (NASDAQ:BRCD) recently posted estimate-topping earnings, but disappointing revenue and guidance. Some see value in the stock, though, with its forward P/E below 10, and a buyout is a possibility, too. Brocade Communications Systems, Inc. (NASDAQ:BRCD) faces strong competition, but on the plus side, it has been paying down its debt and ample free cash flow, too.

Among holdings in which Passport Capital increased its stake were Yamana Gold Inc. (USA) (NYSE:AUY) and Solazyme Inc (NASDAQ:SZYM). Passport Capital reduced its stake in lots of companies, including Southern Copper Corp (NYSE:SCCO) and global steel giant ArcelorMittal (ADR) (NYSE:MT), the latter of which has been facing a weak steel market, especially in Europe, and carries a lot of debt, while not producing gobs of free cash flow lately. Still, some see it as promisingly priced now, with a forward P/E near 9, and a global economic recovery likely. Rising auto sales bode well for the steel company, too. Its stock is yielding about 5.6%.