NetApp Inc. (NTAP), EMC Corporation (EMC): Here’s What This $4 Billion Hedge Fund Has Been Buying

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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 the Eminence Capital hedge fund company, run by Ricky Sandler, who seeks growing companies in growing industries and out-of-favor companies and industries. He also likes to short stocks when he finds ones he expects will decline.

The company’s reportable stock portfolio totaled $3.9 billion in value as of March 31, 2013.

Ricky Sandler

Interesting developments
So what does Eminence Capital’s latest quarterly 13F filing tell us? Here are a few interesting details:

The biggest new holdings are Chicago Bridge & Iron Company N.V. (NYSE:CBI) and Family Dollar Stores, Inc. (NYSE:FDO). Chicago Bridge & Iron Company N.V. (NYSE:CBI) offers construction and engineering services to the energy and natural resources sectors, working on projects related to the water, hydrocarbon, and nuclear industries. It has been boosting its revenue growth rate lately, and its latest earnings report featured a $1.9 billion gain in awards, growing its hefty backlog to $25.5 billion. The company bought Shaw Group last year, which is known for constructing nuclear-related buildings. The stock is up 60% over the past year and has averaged annual growth of about 18.5% over the past decade. Analysts at Lazard Capital, which rate the stock a “buy,” recently upped their price target for it from $65 to $75.

Among holdings in which Eminence Capital increased its stake was QUALCOMM, Inc. (NASDAQ:QCOM), which is a top player in the smartphone world, supplying iDevices and Android devices alike with its chips. Some promising moves by the company are its push into emerging markets and display technology, as well as its attention to the health-care industry and telemedicine. QUALCOMM, Inc. (NASDAQ:QCOM) recently hiked its dividend by 40%, and its yield is now at 2.3%.

Eminence Capital reduced its stake in lots of companies, including IT consulting and outsourcing specialist Cognizant Technology Solutions Corp (NASDAQ:CTSH) Solutions4CO2 Inc (CVE:SFC), led by a highly rated CEO. Based in New Jersey, but with much of its operations based in India, home to other top outsourcers, Cognizant Technology Solutions Corp (NASDAQ:CTSH) has been growing briskly, with its most recent quarter featuring double-digit revenue and earnings growth, and projections of continued double-digit growth by management. With a forward P/E of 12.8 well below its five-year average of 22.6, the stock seems attractively priced. Indeed, a director of the company, John E. Klein, recently bought nearly half a million dollars’ worth of shares.

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