Longhorn Capital’s ‘Fab Five’ Includes Aon PLC (AON), Travelers Companies Inc (TRV) & Wal-Mart Stores, Inc. (WMT)

Page 1 of 2

In the investing world, hedge fund sentiment is an underrated indicator that really can help retail investors beat the market. While the entire industry itself is comprised of thousands of hedge funds, we at Insider Monkey choose to track the top 450 or so—the smart money’s crème de la crème. We recently teamed up with MarketWatch to create the Billionaire Hedge Fund Index, and our small-cap strategy gained an average of 31.6% between September 4th (shortly after we released this to the public) and February 15th, vs. 9.1% for the S&P 500 index (see how to use our market-beating strategy).

With that being said, it’s also important to do a fund-by-fund analysis, so we’re going to take a look at Kris Kristynik’s Longhorn Capital. We’ll take a run through its top five stock picks according to its latest fourth quarter 13F filing with the SEC.

The Travelers Companies Inc (TRV)Travelers Companies Inc (NYSE:TRV) and Aon PLC (NYSE:AON) are Kristynik’s No.’s 1 and 2 holdings, and each comprises a little over 1% of the hedgie’s equity portfolio. The size of these positions hasn’t changed since the third quarter, and both insurance behemoths give Kristynik solid exposure to a generally bullish macroeconomic environment. Travelers has a greater focus on the property and casualty arena, while Aon has operations in risk management, brokerage, and HR consulting, and the sell-side expects both companies to generate EPS expansion of 9-10% a year over the next half-decade.

Over the shorter term, Aon has stronger growth prospects, at least according to analyst averages, but Travelers trades at a more attractive PEG ratio of 1.27 versus Aon’s 2.11 mark. Travelers also offers a dividend yield (2.3%) that’s about twice the size of Aon’s, so we can possibly understand why Kristynik has a slightly larger position in the former. Still, both stocks have seen double-digit appreciation (in percentage terms) since the start of 2013, and it’s difficult to argue with Kristynik’s bullishness.

Campbell Soup Company (NYSE:CPB), meanwhile, is an obvious defensive play for this hedge fund manager, and what it lacks in growth it makes up for in value and income. Shares of Campbell currently trade at a 9.5% discount to their peer average on a price-to-earnings basis, and the packaged food company’s dividend yield of 2.9% places it 6th highest out of 35 stocks in its industry. Joining Kristynik in Campbell is a group of notable hedgies, including Ray Dalio, Mario Gabelli and Jim Simons (check out Simons’s favorite stock picks), so there’s clear support from the smart money.

Wal-Mart Stores, Inc. (NYSE:WMT) is Kristynik’s fourth largest holding, and along with other major retailers, the company saw a decent amount of hedge fund capital flight last quarter. Still, this was far better than some of its key peers like Target and Sears, and on the whole, it was the only retailer to have interest from 50 or more funds at the end of Q4. Wal-Mart has had a mild 2013, returning just 2.5%, though there’s plenty here for income and value-oriented investors to like.

What’s another reason to be bullish on the retailer?

Page 1 of 2

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.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

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

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

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!