Quarterly 13F filings from hedge funds and other major investors can be quite useful to the broader investment community. One way that we use these filings is by developing trading strategies from pooling our entire database of filings; for example, our list of the most popular small cap stocks among hedge funds, published in our August newsletter, earned an excess return of 18 percentage points between September and January (read more about our hedge fund strategies).
Kevin Kenny’s Emerging Sovereign Group was seeded by one of the biggest names in investing: legend Julian Robertson’s Tiger Management– after Kenny had spent several years at Morgan Stanley. The fund is now majority owned by the Carlyle Group after a 2011 investment. We have gone through its 13F for the end of December 2012, which we can more or less think of as what Kenny and his team liked entering 2013; using these names as free recommendations to be researched further is another way to make use of 13Fs. Read on for our quick take on five of the fund’s largest holdings and compare them to previous filings.
The fund owned 1.2 million shares of Cognizant Technology Solutions Corp (NASDAQ:CTSH), a $24 billion market cap IT consulting and services company. This was down somewhat from three months earlier, when Cognizant was Kenny’s largest single-stock position by market value. In the third quarter of 2012, Cognizant reported close to 20% increases in both revenue and earnings. The stock is priced for continuing growth at a trailing P/E of 24. Billionaire Stephen Mandel’s Lone Pine Capital increased its own stake by 25% in the third quarter to a total of almost 11 million shares (find Mandel’s favorite stocks).
