Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Tom Sandell’s Top Stock Picks Include Phillips 66 (PSX)

Page 1 of 2

In May, Sandell Asset Management, a hedge fund founded and managed by Tom Sandell, filed its 13F for the first quarter of 2013 with the SEC. This filing disclosed many of the fund’s long equity positions in U.S. stocks as of the end of March; while these holdings might be a bit out of date as a result, investors can still treat them as free initial investment ideas and perform further research on any interesting names (see the full list of Sandell’s stock picks). We’ve also found that 13Fs can be useful resources in developing investment strategies (for example, the most popular small cap stocks among hedge funds generate an average excess return of 18 percentage points per year). Read on for our quick take on five of the fund’s largest holdings as of the end of Q1(leaving aside Virgin Media and Cymer, which have since been acquired).

Thomas Sandell

Sandell increased its stake in Spectra Energy Corp. (NYSE:SE) to a total of over 2 million shares. Spectra Energy Corp. (NYSE:SE) is a $24 billion market cap company primarily engaged in gathering and transporting natural gas through its network of pipelines. It is somewhat notable as a potential income stock, with an annual dividend yield of 3.5%; the company has been fairly good in terms of maintaining and increasing its quarterly payments over the last several years. However, financial performance has been about flat and the stock is valued at 21 times forward earnings estimates.

Compuware Corporation (NASDAQ:CPWR) was another of the investment team’s top picks with the filing disclosing ownership of 4.6 million shares. The $2.3 billion market cap enterprise software and solutions company declared a 12.5 cent quarterly dividend following an attempted buyout by Elliott Management, and at current prices that would make for an annual yield of 4.7% (though of course many income investors might prefer a company with a longer history of paying dividends). Revenue was down 10% in its most recent quarter (fiscal Q4, which ended in March) compared to the fourth quarter of its last fiscal year.

The fund initiated a position of 1.5 million shares in KAR Auction Services Inc (NYSE:KAR), which auctions off used or damaged vehicles, between January and March of this year. The dividend yield here is 3.2%, though we’d note that there is a limited history of paying dividends here as well. Revenue and earnings were both up about 10% in the first quarter of 2013 versus a year earlier, though markets have already accounted for at least some of KAR Auction Services Inc (NYSE:KAR)’s prospects with the stock trading at 17 times consensus earnings for 2014.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

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 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!