Philip Hempleman’s Top Stock Picks

Philip Hempleman founded Ardsley Partners in 1987. Connecticut-based Ardsley is a long/short equity hedge fund with approximately $1 billion under management. The fund invests globally, but has an affinity for chemical and chemical-related companies. As well, Ardsley focuses on value stocks that are growth oriented. In Ardsley’s latest 13F filing, the fund shook things up among its top five holdings by adding a new company entirely, significantly decreasing a stake in one, while upping ownership of another substantially. In short, Ardsley appears to be overweight pharmaceutical companies. Here’s a more detailed look.

David Shaw

Amarin Corporation plc (NASDAQ:AMRN) is a late-stage biopharmaceutical company focusing on cardiovascular disease. Ardsley first got serious about Amarin in November 2011. Ardsley dumped 26% of its 4Q 2011 shares in the first quarter of this year, and during the second quarter decreased its stake in Amarin by 57%,, but the company still represents Ardsley’s largest holding at 6.13% of its 13F portfolio. Ardsley now only owns 1.3% of the company, versus its 4Q 2011 stake of 5.3%. Ardsley may well believe all the value has been recognized in Amarin for the time being, with the company up almost 90% year to date, and Hempleman would not be the only hedge fund manager with this belief. The company has no revenues and trades at a forward P/E of 283.

Merck & Co., Inc. (NSYE:MRK) represents 5.3% of Ardsley’s 13F portfolio. Merck pays a stable dividend, yielding 3.8% and trades similar to its peers on a multiples basis. There have been some insider sales around the $44-45 range that caught our eye. Also, EPS estimates show a decline from 2012 to 2013, decreasing from $3.81 in 2012 to $3.72 in 2013. The company has pulled back on long-term guidance and plans to cut its workforce by 12-13% through 2015.

Johnson & Johnson (NYSE:JNJ) is a new position for Ardsley and its third largest 13F portfolio, making up 4.75% of its 13F holdings. Johnson & Johnson is also one of D.E. Shaw’s top dividend stocks, while Ken Fisher and Warren Buffet held positions in the company at the end of the second quarter as well. Johnson & Johnson trades at a trailing 22 P/E versus a forward P/E of 13. The company continues to show strong performance and is expected to increase EPS by 8% from 2012 to 2013.

Pfizer Inc. (NYSE:PFE) makes up the fourth largest Ardsley holding and is the fourth drug related company in Ardsley’s top five holdings. The company has recently lost patent protection of one of its major drugs, Lipitor, but trades strong with a trailing P/E of 18 versus a forward P/E of 10. The company also reported second quarter EPS that was up 5% year-over-year and beat estimates by 15%, coming in at $0.62 compared to $0.54 estimates. The company also pays a dividend yield of 3.7%.

Ardsley upped its stake in United Rentals, Inc. (NYSE:URI) by 72% in the second quarter. United Rentals is the largest equipment rental company in the world. As the real estate market appears to be stabling, United Rentals is expecting rental rate improvements to come in as high as 6.5% for 2012, versus the previous outlook of 6%. The company posted strong second quarter numbers, with revenues up 58% from the same quarter last year and a rental rate increase of 7.4%. Although the company trades at a trailing P/E of 49, the forward P/E is 8, with a PEG (based on the 5-year expected growth rate) of 1.0.

Again, Ardsley has its top five holdings weighted heavily toward the healthcare industry, owning three of the top ten most popular healthcare stocks among hedge funds, that together make up over 14% of its 13F portfolio.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

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 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!