Ariel Focus Fund Adds Tiffany (TIF), Likes KKR (KKR), Exxon Mobil (XOM), More

Tiffany & Co. (NYSE:TIF) is a luxury jeweler and specialty retailer operating in Asia, North America and Europe. The Ariel Focus Fund added the stock to its portfolio during the third quarter, citing the company’s strong brand, exclusive merchandise, attractive profitability, clean balance sheet, conservative management, growth prospects, pricing power, and a demonstrated track record of prudent capital allocation (phew). Concerns about spending on luxury goods has led to the stock declining by around 4% year-to-date through the end of October, which gave Ariel an opportunity to enter the company at an attractive price. Shares have enjoyed a strong November, gaining 5%, as Ariel appears to have timed its purchase well. The number of hedge funds in our database with a position in Tiffany & Co. (NYSE:TIF) remained the same quarter-over-quarter at 26 as of June 30, while the value of their holdings increased by almost 44% to $534 million.

Barrick Gold Corporation (NYSE:ABX) is one of the largest gold miners in the world, having a market value of more than $20 billion. The stock has had a spectacular run over the last year, boasting a return of more than 120%, though it had a poor third-quarter, when its earnings fell below expectations. Ariel nonetheless remains upbeat about the prospects of the company as it continues to cut costs and debt. Barrick Gold Corporation (NYSE:ABX)’s management also recently maintained its gold production guidance, which the fund views as a positive. With many top investors advocating a position in gold due to low interest rates and the volatile economic environment, the stock remains a favorite of many analysts. About 53 hedge funds that we track held long positions in this stock on June 30, increasing from 49 a quarter earlier.

Exxon Mobil Corporation (NYSE:XOM) is the largest oil and gas company in the world, with revenues of more than $200 billion a year. The company’s stock fell during the third quarter due to softness in oil prices, but Ariel likes it despite that, as it remains cash flow positive in an environment where most of its peers are suffering from negative cash flows. Exxon Mobil Corporation (NYSE:XOM)’s stock price was also affected by a fall in quarterly profits in the second quarter, to $1.7 billion from $4.2 billion a year earlier. The company continues to provide a decent dividend yield of 3.6%, and its dividend is believed to be safe. Within our database, 60 hedge funds held long position in Exxon Mobil as of June 30.

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