First Eagle Investment Management Unveils Its Top Picks

First Eagle Investment Management has added fervor to the filing season as it recently submitted its 13F form to the Securities and Exchange Commission for the latest reporting period. Founded in 1864 in Dresden, First Eagle is one of the oldest investment firms in the world. The legendary value investor Jean-Marie Eveillard is its Senior Vice President and a member of its Board of Trustees while John Arnold is its current Chairman and Chief Investment Officer.



Assets under the fund’s management amounted to $100 billion at the end of the first quarter. The market value of its equity portfolio stood at $41.98 billion, with technology, materials and consumer discretionary being the three largest contributing sectors. The fund uses a bottom-up approach to sift through global securities including those in emerging markets to find the best value-investment picks. With a total of 327 equity positions and its top ten holdings representing just 26.62% of the portfolio’s value, the fund is well balanced. The top three holdings at the end of the last quarter were Oracle Corporation (NYSE:ORCL), Microsoft Corporation (NASDAQ:MSFT), and Comcast Corporation (NASDAQ:CMCSK).

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Coming back to First Eagle’s portfolio, the fund increased its largest holding, in Oracle Corporation (NYSE:ORCL), by 10% during the quarter to 37.60 million shares valued at $1.62 billion. The technology company is down by about 2% year-to-date, despite the technology sector itself appreciating by 9.77% during the same period. Oracle, which is one of the biggest software companies in the World, was in the news recently in connection with the rumors that the company was going to acquire (NYSE:CRM), the customer relationship management firm which has a strong presence in cloud computing. Oracle has set its eyes on another target instead, which is to reach the $1 billion recurring revenue mark from its cloud services in the current fiscal year. Oracle Corporation (NYSE:ORCL) recently announced that 95% of its products and services will be available to its customers through the mighty power of the cloud by October. Considering the strengthening revenues from this segment in the last two quarters, the technology company will soon prove to be a worthy competitor to the giants in the cloud space like, Inc. (NASDAQ:AMZN) and Microsoft Corporation (NASDAQ:MSFT). Among other investors of the company are Boykin Curry’s Eagle Capital Management, which held 45.21 million as of the end of 2014, and Richard S. Pzena‘s Pzena Investment Management, which held 11.80 million shares of Oracle Corporation (NYSE:ORCL) at the end of the first quarter.

Moving on to Microsoft Corporation (NASDAQ:MSFT), First Eagle’s holding of which was decreased by 4% over the quarter to 34.44 million shares valued at $1.40 billion. The stake represented 3.34% of the fund’s portfolio value. As far as the rumor pertaining to the acquisition of Salesforce is concerned, the second contender after Oracle Corporation (NYSE:ORCL) was Microsoft Corporation (NASDAQ:MSFT), which also has designs on being a force in cloud services, and which has a sizable war chest of $95 billion in cash and short term investments. The $385 billion software giant’s earnings beat in the second fiscal quarter impressed many analysts, who are more hopeful about the company’s future prospects. Microsoft Corporation (NASDAQ:MSFT) was also upgraded to ‘Buy’ from ‘Neutral’ at Nomura. The company has quite a few new products in its pipeline including Windows 10, the new web browser Azure, as well as the HoloLens, the first fully untethered holographic computer. According to our database, Jeffrey Ubben’s ValueAct Capital is the largest shareholder of Microsoft Corporation (NASDAQ:MSFT) as it held some 74.24 million shares, according to its latest filing.

In third place is First Eagle’s bet in the consumer discretionary sector on Comcast Corporation (NASDAQ:CMCSK), in which it added on to its holding with the addition of about 156,700 shares over the quarter to take the total stake at 23.85 million shares valued at $1.34 billion. This long-term pick made it to the fund’s portfolio in the second quarter of 2006. Comcast Corporation (NASDAQ:CMCSK)’s dream of forming the largest cable company in America by acquiring Time Warner Cable Inc (NYSE:TWC) has recently been shattered, with the company dropping its $45 billion bid after it was reported that the Federal Communications Commission intended to take the matter to an administrative judge given the monopoly over national pay television and high-speed broadband that the merger would have created. Comcast Corporation (NASDAQ:CMCSK)’s stock has appreciated by 1.22% year-to-date. Among the other notable shareholders of the media company is Paul Ruddock and Steve Heinz‘s Lansdowne Partners.

Disclosure: None