Michael Dell, founder of the tech giant Dell Inc. (NASDAQ:DELL), is one of the richest people in the world, with a net worth in excess of $14 billion. He manages his personal wealth through MSD Capital, which invests in public equity, private equity, and real estate. Michael Dell started MSD in 1998 as a family office in an effort to diversify his wealth beyond the computer company, Dell. MSD Capital runs a niche portfolio that is heavily concentrated, this includes having over 85% of his total funds invested in the top four stocks. Let’s have a look at Michael Dell’s top picks for last quarter.
MSD Capital’s Top Picks
DineEquity Inc (NYSE:DIN) was MSD’s top stock holding at the end of 2012, with over 32% of the fund invested in the company. DineEquity owns and operates two restaurant chains, Applebee’s Neighborhood Grill and International House of Pancakes (IHOP). DineEquity Inc (NYSE:DIN) has a robust return on equity of 37%,
Asbury Automotive Group, Inc. (NYSE:ABG) is MSD’s second largest holding, and makes up 20% of the firm’s public equity portfolio. Asbury is one of the largest automotive retailers in the United States. Asbury Automotive Group, Inc. (NYSE:ABG)posted fourth-quarter earnings of $0.72 per share, versus $0.55 from the same quarter last year and beat the consensus estimate of $0.65 handily. Earnings before interest and taxes beat consensus estimates by 5%. Asbury did suspend its dividend in 2008 in an effort to boost its cash position, but boding well for Asbury Automotive Group, Inc. (NYSE:ABG) is the S&P’s expected increase in U.S. light vehicle sales to 15.4 million units in 2013, up from 14.4 million in 2012.compared to an industry average of 20%. What’s more is that its net profit margin of 15% is high compared to an industry average of 5%. DineEquity Inc (NYSE:DIN) carries a 4.23% dividend yield and trades at a mere 10.7 times earnings, making the stock a value and income play (read more about why).
PVH Corp (NYSE:PVH) is MSD’s fourth largest holding, and makes up 17.5% of the fund’s portfolio. PVH Corp (NYSE:PVH) has a diversified portfolio of iconic brands, including Calvin Klein, Tommy Hilfiger, and Van Heusen. The stock is up over 30% in the last twelve months, mainly due to its planned acquisition of The Warnaco Group. The acquisition will unite the Calvin Klein brand under one roof. Other Warnaco brands include Speedo, Chaps, Warner’s and, Olga. Meanwhile, the company exited its Izod women’s and Timberland wholesale sportswear businesses last year.
