Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Goldman Sachs (GS), JPMorgan Chase & Co. (JPM): Greenhaven Associates Bulks Up Its Top Financial Holdings

Edgar Wachenheim‘s Greenhaven Associates has two distinct features: a concentrated portfolio and an emphasis on long-term investing. Thus it is no surprise that no drastic changes are seen in its equity portfolio as disclosed through its latest 13F filing with the SEC. However, the fund’s exposure to the finance sector was increased, with it now representing 25% of its portfolio value. The top finance-related picks which had increases to their positions were Goldman Sachs Group Inc (NYSE:GS) and JPMorgan Chase & Co. (NYSE:JPM). Among other top holdings, Lowe’s Companies, Inc. (NYSE:LOW) and Whirlpool Corporation (NYSE:WHR) represented the consumer discretionary sector, which also comprised 25% of the fund’s portfolio value, and FedEx Corporation (NYSE:FDX), which was one of Wachenheim’s bets in the industrials sector, which formed another 17% of his portfolio’s value.

Lowe's Companies, Inc. (NYSE:LOW)

Greenhaven has about $5.72 billion in assets under management and the market value of its equity portfolio stood at $5.55 billion at the end of March. The top ten holdings constituted more than 88% of the fund’s equity portfolio, while the turnover ratio for the quarter remained relatively low at 24%. Wachenheim purchased the fund in 1998 from the Gottesman family and has successfully passed on his investment prowess to quite a few of his employees, who later set up their own shops; Chieftain Capital and Brave Warrior Capital being two such examples.

Through our research at Insider Monkey we discovered that a portfolio of the 15 most popular small cap picks of hedge funds beat the S&P 500 Total Return Index by nearly a percentage point per month between 1999 and 2012. On the other hand the most popular large-cap picks of hedge funds underperformed the same index by 7 basis point per month during the same period. In forward tests from August 2012 through March 2015 these top 15 small-cap stocks continued to crush the market, by over 80 percentage points (read the details here).

Even after slicing its stake by 4% in Lowe’s Companies, Inc. (NYSE:LOW) to 10.79 million shares valued at $802.50 million, the company was Greenhaven’s largest holding. The $67.3 billion home improvement retailer was upgraded to an ‘Overweight’ rating by Piper Jaffray recently with a price target of $88, which represents an upside of 23%, on account of promising housing turnover trends. However,  Lowe’s Companies, Inc. (NYSE:LOW) has recently pulled the plug on its sale of Chinese flooring. There are concerns that the company’s flooring might contain illegal levels of formaldehyde, the same concerns that sent Lumber Liquidators Holdings Inc (NYSE:LL)’s stock in a tailspin this year. Both companies have the same Chinese supplier for flooring, Tecsun. In an attempt to pacify both customers and investors, Lowe’s Companies, Inc. (NYSE:LOW) said that it would conduct independent testing of its flooring products. Ken Griffin‘s Citadel Investment Group is another major stockholder of the company as it held some 3.75 million shares at the end of the fourth quarter.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.