Boyd Watterson Asset Management showed stability in its investment beliefs during the first quarter as the same companies occupied top spots in its equity portfolio, which is also headed by a number of positions in Exchange Traded Funds, according to its 13F filing. Considering the firm’s long history spanning over 85 years, we decided to take a closer look at these companies, and find out if they could provide a similar stability to portfolios of retail investors.
Our research determined that following the small-cap stocks, that hedge funds are collectively bullish on, can help a smaller investor beat the S&P 500 by around 95 basis points per month (see more details here).
#5 Eaton Corporation, PLC Ordinary Shares (NYSE:ETN)
– Shares Owned by Boyd Watterson (as of March 31): 51,300
– Value of Holding (as of March 31): $3.21 Million
During the first three months of this year Boyd Watterson slightly trimmed its stake in Eaton Corporation, PLC Ordinary Shares (NYSE:ETN) by 1%. Although down by about 15% in the last twelve months, the stock price of the $28.8 billion diversified power management company has shot up by 18% year-to-date. The industrials have been having a hard time due to slowing global demand and a strong dollar and Eaton is no exception, but through cost-cutting measures and share-buybacks the management has done well to keep the morale of investors high. For the first quarter of 2016, Eaton Corporation posted EPS $0.88, beating the estimates of $0.85, while its revenue of $4.81 billion topped the estimates of $4.77 billion, despite a challenging market environment. Breton Hill Capital, which is led by Ray Carroll initiated a stake in Eaton Corporation, PLC Ordinary Shares (NYSE:ETN) with some 100,900 shares valued at $6.31 million during the first quarter.
#4 JPMorgan Chase & Co. (NYSE:JPM)
– Shares Owned by Boyd Watterson (as of March 31): 55,100
– Value of Holding (as of March 31): $3.26 Million
After a 4% boost during the first trimester, Boyd Watterson’s holding in JPMorgan Chase & Co. (NYSE:JPM) represented 1.58% of its equity portfolio. The first quarter-financial results of the $225 billion financial holding company marked a top line decrease of 3% and EPS falling by almost 7% on a year-over-year basis. Nevertheless, the EPS of $1.35 and revenue of $24.10 billion topped the estimates of $1.26 and $24.78 billion, respectively. Last month, JPMorgan was also one of the five major U.S. banks, whose living will was rejected by the regulatory authorities. Ken Fisher‘s Fisher Asset Management inched up its JPMorgan Chase & Co. (NYSE:JPM) stake by 1% during the January-March period.
#3 Johnson & Johnson (NYSE:JNJ)
– Shares Owned by Boyd Watterson (as of March 31): 33,500
– Value of Holding (as of March 31): $3.62 Million
Boyd Watterson reduced its position in Johnson & Johnson (NYSE:JNJ) by 20% during the March quarter. Shares of the $306 billion healthcare company have gained around 10% so far this year, outperforming the pharmaceutical industry. The conglomerate has beaten EPS estimates for the last 13 quarters, but that doesn’t mean that its path forward is hurdle-free. The conglomerate’s Invokana, which treats type 2 diabetes is facing declining sales and the competition is about to get stiffer with Eli Lilly and Boehringer Ingelheim’s superior drug Jardiance, which was approved by FDA last August. Furthermore, the company’s blockbuster anti-inflammatory drug Remicade is going to be under fire from Celltrion’s biosimilar. Fisher Asset Management upped its stake in Johnson & Johnson (NYSE:JNJ) by 1% to 10.85 million shares during the first quarter.
#2 Apple Inc. (NASDAQ:AAPL)
– Shares Owned by Boyd Watterson (as of March 31): 40,800
– Value of Holding (as of March 31): $4.44 Million
The 2.11% rise in Apple Inc. (NASDAQ:AAPL)’s share price during the first quarter might have worked well for Watterson, since it raised its stake in the tech giant by 5% during the same period. However, the stock has declined by over 13% year-to-date amid disappointing results for its fiscal second quarter, which included EPS of $1.90 on revenue of $50.56 billion, versus estimates of $2.00 and $51.97 billion. The revenue slid by 13% on the year, which marked the first decline since 2003. The number of iPhone shipments was better than expected, but also declined year-on-year. Recently, activist billionaire Carl Icahn said he dumped his stake in Apple.
#1 Microsoft Corporation (NASDAQ:MSFT)
– Shares Owned by Boyd Watterson (as of March 31): 90,700
– Value of Holding (as of March 31): $5.0 Million
Watterson inched up its stake in Microsoft Corporation (NASDAQ:MSFT) by 1% during the first three months of 2016. The $449 billion Redmond-based company recently sued the U.S. Department of Justice in connection with the government-sponsored cloud data searches, about which they wanted Microsoft to keep silent and not notify users whose data had been shared. The company is on its way to making a transition to the cloud and the current cloud run rate stands at about $9.4 million, showing a 71 year-on-year growth, while it is expected that in 2018 the run rate will reach $20 billion. Jeffrey Ubben‘s ValueAct Capital held about 56.62 million shares of Microsoft Corporation (NASDAQ:MSFT) at the end of 2015.