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 investment advisory firm Douglass Winthrop Advisors. It’s of interest because it employs a Foolish (in a good way) “low-turnover, buy and hold strategy” — and it has been served well by that, too. Since its inception roughly a decade ago, its equities investments have averaged annual gains of 9.2%, versus 8% for the S&P 500. Management noted in a recent letter to shareholders, “As committed long-term investors we keep our clients invested through good days and the inevitable bad ones. While this makes for some queasy moments, our clients understand that what really matters are long-term returns net of fees and taxes.”
The company’s reportable stock portfolio totaled $844 million in value as of March 31.
So what does Douglass Winthrop’s latest quarterly 13F filing tell us? Here are a few interesting details.
The biggest new holdings include Merck & Co., Inc. (NYSE:MRK). Other new holdings of interest include Seadrill Ltd (NYSE:SDRL) and Banco Santander, S.A. (ADR) (NYSE:SAN). Seadrill Ltd (NYSE:SDRL), a deepwater drilling specialist, sports a huge dividend yield of about 8.5%. It has been “executing perfectly,” but it worries some with its aggressive financing and high debt. Still, it sports a massive work backlog that tops $20 billion, and its fleet is more modern than those of its peers. The stock has grown by nearly 11% annually, on average, over the past five years yet still sports a forward P/E of just 11.
Banco Santander, S.A. (ADR) (NYSE:SAN) has also been yielding 8.5% recently. It has faced a tough environment in Europe, but it does a lot of its business in Latin America, where it benefits from faster growth rates. It may be a while before all its operating regions are healthy, but while investors wait, they can collect a hefty payout. Some value-oriented investors see it as undervalued, as well, and its most recent quarter improved on results from the previous quarter.
Among holdings in which Douglass Winthrop Advisors increased its stake was Sirius XM Radio Inc (NASDAQ:SIRI). Sirius did post disappointing earnings recently, but revenue and earnings are still growing at a double-digit rate, which remains attractive. A strong report from Ford Motor Company (NYSE:F) is promising for Sirius, as its radios are embedded in many vehicles. Bulls like the company’s new personalized radio service, MySXM, too, and the stock recently hit a 52-week high.