The $6 billion Carlson Capital, a Dallas-based hedge fund that focuses its strategies on philosophy, people and process, is a stark contrast to other funds, many of which have formulated complex algorithms to perform detailed quantitative analyses. As more and more non-Wall Streeters establish their own funds, many have begun to embrace manager Clint Carlson’s approach, and according to his most recent 13F filing with the SEC, Carlson added several new companies to his already diversified equity portfolio in preparation for 2013.
Let’s take a closer look at the top five moves he was making to determine where retail investors should focus their efforts. It’s always important to watch hedge fund sentiment, as it has been quite the market-beating strategy for market participants like you and me. Learn more here.
Carlson picked up nearly 2 million shares of Kraft Foods Group Inc (NASDAQ:KRFT) last quarter for a total value of $89,845,000. Kraft Foods Group Inc (NASDAQ:KRFT) reported a drop in revenue for the fourth quarter from $18.6 billion to $18.3 billion, which ultimately caused the percentage of sales devoted to costs to increase to 85% from 68% the prior quarter. Despite a decline in earnings, the stock continues to appreciate. After splitting off its snack division last year, analysts now predict that Kraft Foods Group Inc (NASDAQ:KRFT) is better able to streamline the production of its domestic grocery division—its bread and butter, so to speak. Now, the stock could face some profit taking pressure at $52.50, but even at this share price, it’s still priced at only 4 times book versus a sector average that’s 20% higher.
Number two of new positions for Carlson Capital is Goldcorp Inc. (NYSE:GG). The stock has fallen in tandem with the price of gold and because of the intrinsic relationship between gold-related equities and gold prices, as one goes, so goes the other. Carlson was obviously betting on another test of $1,800 resistance in gold, but when the metal turned south on profit taking, it took Goldcorp Inc. (NYSE:GG). along in sympathy. Although Goldcorp Inc. (NYSE:GG). trades at 10 times trailing earnings versus a sector average of 20.0x, the company saw net income decline by $200 million and earnings decline to $1.95 from $2.18 in its latest financials.