Editor’s Note: Related tickers: News Corp (NASDAQ:NWSA), American Express Company (NYSE:AXP), The Walt Disney Company (NYSE:DIS), Visa Inc (NYSE:V), Comcast Corporation (NASDAQ:CMCSA)
Egerton Capital was founded by John Armitage and William Bollinger in 1994 and has around $4.5 billion in assets under management. The London-based fund primarily takes long/short positions in European equities and has returned more than 15% annually since its founding. A quick look at the top five equity positions of this hedge fund might be a good starting point for your own research.
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The fund’s largest holding is in media giant News Corp (NASDAQ:NWSA). Egerton Capital is the 17th biggest institutional investor in News Corp (NASDAQ:NWSA) The holdings expanded by 2,615,344 during the quarter reaching 20,186,722 in total by the end of March. The value of the entry advanced 37.40% to a $615.897 million, which represents 15.24% of the total equities reported in Egerton’s 13F. The shares trade at trailing and forward P/E’s of 19.69 and 17.15, compared to industry averages of 20.68 and 16.76 respectively. At a trailing EPS of $1.69 and a profit margin of 12.37%, the stock has a mean recommendation of 1.80 from analysts, with a dividend yield of 0.51%. Quarterly earnings have more than tripled on year-to-year basis.
The best of the rest
American Express Company (NYSE:AXP) is another major equity holding of the fund. Compared to the previous quarter, the size of this position grew from 4,750,320 shares to 8,741,220 in total. Meanwhile, the value of the holding increased by 157.06% to $589.683 million, worth 14.6% of its entire 13F equity portfolio. The shares trade at P/E ratio based on the previous twelve months of 17.74, while the forward PE is 13.32. Annual EPS is estimated at $4.79 and the stock’s beta is essentially market-average at 1.02. The stock’s price has increased by nearly 20% during the past year. Both quarterly earnings and revenue growth rates are positive, and American Express Company (NYSE:AXP)’s profit margins continue to hold steady above 15%.
The next largest holding in the 13F is The Walt Disney Company (NYSE:DIS). The entertainment giant has a stake in of 7,318,467 shares, diminishing by 1,751,944 from the previous quarter. The value of the holding advanced by nearly 50%, though, to $415.689 million; this represents 10.29% of the total 13F reported by Egerton. Disney sports a solid profit margin of 14.22%, the third highest in its industry, while the stock trades at a trailing P/E of 21.75, compared with an industry average of 20.68.
Egerton Capital also holds 1,926,369 shares of Visa Inc (NYSE:V), increasing the amount by 62,163 in the first quarter. The stock’s value expanded by 15.78% in Q1 to a level of $327.175 million. At a trailing P/E of 80.88, the stock has climbed 53.14% year-to-date, giving the indication to at least some investors that an overvaluation is in order. Still, a beta of 0.70 and a mean analyst recommendation of 2.0 are attractive indicators. More specifically, 10 of the 34 analysts that hold coverage issue Strong Buy ratings on Visa Inc (NYSE:V), while another 13 tag the stock as a Buy.
The final stock in this top five is the broadband communication networks player Comcast Corporation (NASDAQ:CMCSA), with 6,439,737 shares held by the fund. The fund bought an additional 2,486,335 shares, increasing the total value of the holding by 83.03%, to $270.340 million. Like Visa, the price of this stock has increased by nearly 50% during last 52 weeks. The stock trades with a beta of 1.27 and has an annual EPS estimate of $2.40 while the trailing EPS is $2.37. Comcast Corporation (NASDAQ:CMCSA) exhibits a trailing profit margin of 10.18%, and receives a positive mean recommendation of 1.9 from analysts.
As seen above, Egerton Capital focuses their efforts on sizable blue-chip companies. The fund has concentrated approximately 55% of its equity portfolio in the five aforementioned stocks. Continue preparing for 13F-filing season here.