Several weeks after the end of each quarter, hedge funds and other major investors are required to file 13Fs with the SEC to disclose many of their long equity positions in U.S. stocks as of the end of that quarter. While this does mean that the information included in 13Fs is a bit old, there are still a few ways for investors to make use of it. For one, we have found that the most popular small cap stocks among hedge funds outperform the S&P 500 by an average of 18 percentage points per year and we think that other strategies are possible as well. We can also look at individual managers’ top picks in a number of areas, such as dividend stocks, and treat these as free investment ideas. Read on for our quick take on five of billionaire David Harding’s Winton Capital Management’s holdings as of the end of March whose current dividend yields are 3.5% or higher (or see the full list of Winton’s stock picks).
Electric utility DTE Energy Co (NYSE:DTE), which operates in southeastern Michigan, was one of Winton’s top stock picks. As is generally the case for electric utilities, DTE has little exposure to the broader economy (the stock’s beta is 0.2) and pays a high dividend yield (of close to 4%). Quarterly dividend payments have actually increased decently over the last few years- the payment is 17% higher than it was three years ago. Cliff Asness’s AQR Capital Management reported a position of about 950,000 shares at the end of the first quarter of 2013 (find Asness’s favorite stocks).
Harding and his team owned about 940,000 shares of Verizon Communications Inc. (NYSE:VZ) according to the 13F. The $140 billion market cap telecom company actually shares the typical characteristics of a utility: its dividend yield is quite high, at over 4%, and the beta of 0.3 demonstrates little sensitivity to movements in market indices. We would note that Verizon may be looking at ways to purchase the rest of Verizon Wireless from its partner Vodafone (NYSE:VOD). Renaissance Technologies, founded by billionaire Jim Simons, cut its stake during Q1 but still closed March with 1.4 million shares (research more stocks Renaissance owns).