Related tickers: American International Group Inc (NYSE:AIG)
We track quarterly 13F filings from hedge funds and other notable investors as part of our work developing investment strategies; we have found that the most popular small cap stocks earn an average excess return of 18 percentage points per year (learn more about our small cap strategy) and think that more strategies are possible as well. Our database also lets us track manager holdings over time to see which stocks they have consistently owned over the past few years. Read on for our quick take on billionaire Bruce Kovner’s Caxton Associates’ five largest holdings as of the beginning of this year which the fund had also owned at the end of 2010 (or see the full list of stocks from the most recent 13F):
Caxton has been a long-term holder of American International Group Inc (NYSE:AIG) by this methodology, and the insurer was its largest holding by market value at the end of December. During the fourth quarter of 2012, American International Group Inc (NYSE:AIG) passed Apple to become the most popular stock among hedge funds. Even after a 40% gain in the last year, the stock still trades at a significant discount to the book value of its equity at a P/B ratio of 0.7. However, American International Group Inc (NYSE:AIG)’s forward earnings multiple of 11 is actually in line with what we see at many other large finance and insurance companies.
The investment team has been increasing its stake in General Motors Company (NYSE:GM) over time, with a total of 2.5 million shares in its portfolio at the end of 2012. Many value investors have been interested in automakers for some time, and Wall Street analysts are also quite optimistic about General Motors Company (NYSE:GM) with their earnings forecasts implying a forward P/E of 7 and a five-year PEG ratio of 0.5. However, net income was down 11% last quarter compared to the first quarter of 2012. Warren Buffett’s Berkshire Hathaway reported a position of 25 million shares in General Motors Company (NYSE:GM) after buying during Q4 (check out Buffett’s stock picks).
See the best of the rest:
Wells Fargo & Co (NYSE:WFC) has been another of Caxton’s long-term holdings, with the most recent filing disclosing ownership of 1.6 million shares. Unlike many other large banks- including a couple we’ll discuss here- Wells Fargo & Co (NYSE:WFC) is valued at a premium to the book value of its equity with a P/B ratio of 1.4. However, the bank’s return on its assets has been good and as a result the trailing earnings multiple is 11. A Buffett favorite, Wells Fargo & Co (NYSE:WFC) was also one of billionaire Ken Fisher’s Fisher Asset Management’s ten largest single-stock holdings by market value at the beginning of January (find Fisher’s favorite stocks).
According to the 13F, the fund owned 1.1 million shares of JPMorgan Chase & Co. (NYSE:JPM). Market prices place this megabank right about at book value, and the trailing and forward P/Es are 9 and 8 respectively. With a small increase in revenue in the first quarter of 2013 versus a year earlier (earnings were up at a higher rate, though high net income growth from improved net margins is probably not sustainable) we think it is a potential value play. Moore Global, managed by billionaire Louis Bacon, increased its stake in JPMorgan Chase & Co. (NYSE:JPM) Chase by 33% between October and December (research more stocks Bacon was buying).
Caxton has been selling shares of Citigroup Inc (NYSE:C) on net over the past couple of years, but still had about 500,000 shares at the beginning of this year. The stock is cheaper than book (Citigroup Inc (NYSE:C)’s P/B ratio is 0.8) though the flip side here is that the bank is dependent on meeting analyst growth expectations in order to make sense from an earnings basis. Revenue did grow 10% in its most recent quarter compared to the same period in the previous year. Billionaire George Soros has been another notable investor with a large position in Citigroup Inc (NYSE:C) (see more stocks Soros likes).
Disclosure: I own no shares of any stocks mentioned in this article.