We track quarterly 13F filings from hundreds of hedge funds and other notable investors as part of our work developing investment strategies; we have found, for example, that the most popular small cap stocks among hedge funds earn an average excess return of 18 percentage points per year (learn more about our small cap strategy). It’s also potentially useful to go through individual filings from top managers such as billionaire Louis Bacon’s Moore Global to see which stocks they like- not to blindly follow them, but to get an idea of how they have been playing the market recently and potentially pick up interesting ideas for further research. Read on for our quick take on Moore’s five largest single-stock holdings as of the end of March and compare them to previous filings.
The fund’s top pick was Citigroup Inc (NYSE:C), with the filing disclosing ownership of 5.2 million shares- up slightly from what it had owned at the beginning of this year. Citigroup Inc (NYSE:C) has nearly doubled in price in the last year, yet even with the market becoming more confident in the company its stock still trades at a small discount to book value with a P/B ratio of 0.8. We would note that earnings have not been too strong recently, though they are improving and analyst expectations for 2014 imply a forward P/E of 8. Billionaire David Tepper’s Appaloosa Management has been another major shareholder in Citigroup Inc (NYSE:C) (check out Tepper’s stock picks).
Bacon and his team reported a position of 7.2 million shares in Assured Guaranty (NYSE:AGO), a $4.6 billion market cap company which insures public finance and infrastructure securities. Its stock has also done quite well recently, in part because Assured Guaranty tends to overexaggerate moves in the broader market: its beta is 2.2. It is at least a potential value stock, with trailing and forward P/Es of 10 and 9 respectively, and so might be worth taking a closer look at. Ric Dillon’s Diamond Hill Capital had owned 9.1 million shares at the beginning of January.
Moore was selling JPMorgan Chase & Co. (NYSE:JPM) during the first quarter of 2013, but still closed March with a little over 3 million shares in its portfolio. Currently in a state of uncertainty as CEO Jamie Dimon may be stripped of his chairmanship over the Board of Directors- and, if that happens, may leave the bank entirely- it also looks like it could be a good value with both the trailing and forward P/Es coming in at 9. In addition, the current dividend yield is close to 3%. Fisher Asset Management, managed by billionaire Ken Fisher, reported a position of 12 million shares at the end of December (find Fisher’s favorite stocks).