L-3 Communications Holdings Inc. (LLL), Northrop Grumman Corporation (NOC), Torchmark Corporation (TMK): David Harding’s Top Picks

In an interview on CNBC, David Harding, founder and president of Winton Capital Management said that the S&P 500 is nothing else, but a trading system, and “by the way, it is not a really good one.” Consequently, he presented a different system that could help investors outperform the index: choosing stocks at random and weighting them equally. In fact, Mr. Harding assures that “if you choose stocks at random and combine them, you always beat the S&P 500 -or in 99.99% of cases; and that is consistent with my understanding of investment mathematics.”

Let’s thus take a look at Winton’s equity portfolio in order to find out if any of its top picks deserve further research and could be considered as long-term investment options, like Mr. Harding does.

David Harding

According to Winton’s latest 13F filing, its largest equity position is that at L-3 Communications Holdings, Inc. (NYSE:LLL), a $10.4 billion market cap system contractor in aircraft modernization & maintenance, Command, Control, Communications, Intelligence, Surveillance and Reconnaissance systems, and government services. The fund last disclosed ownership of 1.36 million shares of the company, worth more than $165 million at current stock prices. The stake at L-3 Communications Holdings, Inc. (NYSE:LLL) accounts for more than 1% of the fund’s total equity portfolio.

Sean Cullinan’s Point State Capital is also betting on L-3 Communications Holdings, Inc. (NYSE:LLL). Over the first quarter of 2014, the fund started a stake in the company, with 1.58 million shares.

Other big bets were placed on Northrop Grumman Corporation (NYSE:NOC), Torchmark Corporation (NYSE:TMK) and Medtronic, Inc. (NYSE:MDT). The fund upped its stake in all three of these companies over the last reported quarter.

Northrop Grumman Corporation (NYSE:NOC) is a $26.68 billion market cap security company in which Winton holds 1.13 million shares. This position has a value of more than $144 million at current stock prices. The stock trades at almost 14 times the company’s earrings, at a considerable discount to the 18x P/E industry average.

Another fund that also boosted its exposure to Northrop Grumman Corporation (NYSE:NOC) over the first quarter of 2014 is Cliff Asness’ Aqr Capital Management, which disclosed ownership of 1.72 million shares, after having added 6% to its holdings.

Torchmark Corporation (NYSE:TMK) is an insurance holding company with a market cap barely above $7 billion. Winton last declared holding 1.54 million shares. However, a stock split of 19:100 shares on April 1 turned them into 8.13 million shares, which would be worth $435 million at the current stock price. This means that, since the end of the first quarter, when the fund’s position was worth $121.66 million, the stock has more than tripled in price.

Another famed investor betting on Torchmark Corporation (NYSE:TMK) is the one-and-only Warren Buffett, who owns about 22.29 million shares, following the split.

Medtronic, Inc. (NYSE:MDT) is a $62.66 billion market cap medical technology provider, of which Winton owns 1.95 million shares, worth almost $125 million at current stock prices.

Another fund that has been capitalizing on Medtronic, Inc. (NYSE:MDT)’s 9.6% return, year-to-date, is Harris Associates, which last disclosed ownership of 13.4 million shares of the company.

Watch the full video with Mr. Harding’s interview below:

Disclosure: Javier Hasse holds no position in any stocks or funds mentioned.

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Click here to Read Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 74 percentage points in 2.5 years. Our beta is only 1.2 (download a FREE newsletter and see the details inside)

Lists

Best Selling Magazines in the World

Shortest People in History

The Most Celebrated Holidays in the World

Most Expensive Handbag Brands in the World

Top Selling Comic Book Issues of this Century

The Most Powerful Women in Politics

Best Paid DJs

Most Rebellious Female Artists

Best Paid TV Actresses of 2014

Best Paid Actors of 2014

Most Expensive Horses in the World

Tallest People Ever

Most Encouraging Feminist Celebrities

Best Paid Supermodels of 2014

Top 10 Suburbs for Retirement in 2015

10 Wealthiest Cities in America

Top 10 TED Talks for Entrepreneurs

Best TED Talks on Education

25 Most Dangerous Places to Live in America

Top 10 Ski Resorts in the United States – 2014 List

Top 10 Most Remote Places in the World

Most Visited Museums in the United States

Wealthiest Photographers in the World

Most Famous Gay Athletes

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!