Hedge funds and many other institutional investors are required to file 13Fs within six to seven weeks after the end of each quarter. While the overwhelming majority of these filings occur close to the end of that period, some funds file their documents earlier and this means that we can get a fairly recent picture of a large share of a fund’s long equity positions. Libra Advisors, a hedge fund founded in 2000 by Ranjan Tandon which has tended toward basic materials investments, recently filed its 13F and so it may be of use to see which stocks it likes as either a source of ideas or as a way to understand what the investment team is thinking. Here are the five largest holdings from Libra’s 13F portfolio (see the full list of stock picks) as of the end of December 2012:
Libra owned about 590,000 shares of China Mobile Ltd. (NYSE:CHL), making it the largest position in the 13F portfolio. The mobile telephone company had about 650 million customers at the end of 2011. The trailing earnings multiple is only about 11; recent growth numbers have not been particularly strong, many investors are worried about Chinese macro conditions, and recent episodes of accounting fraud at other Chinese companies have hurt valuations generally. Billionaire Ken Fisher’s Fisher Asset Management had initiated a position of almost 4 million shares in the third quarter of 2012 (check out more stocks Fisher was buying).
Another of the fund’s top picks was Microsoft Corporation (NASDAQ:MSFT), with a position of 1.2 million shares. Even though this was down significantly from three months earlier, the tech company remained Libra’s second largest holding by market value. Microsoft had made our list of the ten most popular stocks among hedge funds for the third quarter of the year (find more of the ten most popular stocks). Microsoft trades at 9 times forward earnings estimates (for the fiscal year ending in June 2014) and does pay a dividend yield above 3%, though we think that investors should wait for more data on the Windows 8 release before considering it.
Three more of Libra's stock picks, in basic materials: