John A. Levin’s Levin Capital Strategies has acquired 1.23 million shares of Metaldyne Performance Group Inc (NYSE:MPG) and according to a 13G Form filed with the U.S. Securities and Exchange Commission, the fund now owns 3.37 million common shares, representing 5% of the company’s outstanding stock.
Levin Capital disclosed a new position in Metaldyne Performance Group Inc (NYSE:MPG) in its latest 13F filing, the stake containing 2.14 million shares, valued at around $37.17 million. The hedge fund’s latest move indicates it remains bullish on the company, as it remains one of the largest shareholders among institutional investors. Since going public in mid-December, Metaldyne Performance Group Inc (NYSE:MPG)’s stock has gained approximately 18%. The stock has recently received a “Buy” rating from nine brokerages, along with a 1-year consensus target price of $20.28 per share. In addition to Mr. Levin’s firm, Ken Griffin’s Citadel Investment Group is also betting on the auto parts company, disclosing ownership of 795,000 shares as of the end of 2014.
Levin Capital Strategies is a New York City-based hedge fund that was founded by John A. Levin in 2005. Prior to launching the fund, Mr. Levin ran Levin Management Company and held the position of President at BKF Capital Group. Levin Capital favors investments in large-cap stocks, as well as corporate and U.S. Treasury bonds, employing fundamental analysis and a bottom-up stock-picking strategy. Furthermore, the fund’s equity portfolio is valued at around $6.62 billion as of the end of last quarter and it holds around $8.7 billion in assets under management. The hedge fund’s top three picks, according to its latest 13F filing, are represented by Pfizer Inc. (NYSE:PFE), Eaton Corp plc (NYSE:ETN), and General Electric Company (NYSE:GE).
We track the activity of hedge funds such as Levin Capital, in order to discover new investment opportunities that small investors can take advantage of. However, simply imitating the moves made by hedge funds does not guarantee great returns, since most of their top picks are large-cap stocks, which usually don’t beat the market by a large margin, since they tend to be more efficiently priced. Hence, we have concentrated our efforts on gathering and analyzing information regarding the small-cap picks of more than 700 hedge funds, which resulted in a small-cap strategy that returned 132% over the past 2.5 years, and beat the S&P 500 ETF (SPY) by nearly 80 percentage points.
Pfizer Inc. (NYSE:PFE) is Levin Capital’s top pick as of the end of the last quarter, with a stake amounting to 10.52 million shares, valued at $327.84 million. The position accounts for almost 5% of its equity portfolio, after the hedge fund increased its exposure to the stock by around 4% last quarter. Pfizer Inc. (NYSE:PFE) is one of the most popular Dow stocks among hedge funds, with a total of 86 investors holding a long position in the company by the end of 2014. Ken Fisher’s Fisher Asset Management is one of the biopharmaceutical company’s largest shareholders among institutional investors, holding 31.19 million shares, valued at around $971.77 million as of the end of 2014. Over the past year, Pfizer Inc. (NYSE:PFE)’s stock gained 8.55%, and is currently hovering around its 52-week high of $35.45 per share.
The second-largest position in Levin Capital’s equity portfolio in terms of value is represented by Eaton Corp plc (NYSE:ETN). The hedge fund disclosed ownership of 4.10 million shares of the company last quarter, following a 12% increase in its exposure to the stock. Although its share price dropped by around 9.85% over the past 52 weeks, analysts have mixed feelings towards Eaton Corp plc (NYSE:ETN). Its fourth quarter performance showed positive signs, as the company’s earnings per share beat estimates, and revenues proved to be higher than expected. Analysts at Barrons.com expect the stock to grow around 20% over the next year on the back of rising earnings. Levin Capital has held a stake in the company for several years, hence suggesting it is interested in its long-term growth potential. Last quarter, Andreas Halvorsen’s Viking Global turned bullish on Eaton Corp plc (NYSE:ETN), entering a position of 1.79 million shares, valued at around $121.78 million.
Finally, Levin Capital also held General Electric Company (NYSE:GE) among its top 3 picks last quarter. The position amounts to 10.80 million shares, which were valued at $273.10 million at the time of the 13F filing. Although the stock’s share price dropped around 4% over the past 52 weeks, numerous hedge funds hold a stake in the company. Fisher Asset Management, for example, owns 30.27 million shares, while Phillip Gross and Robert Atchinson’s Adage Capital Management holds 20.40 million shares. Although General Electric Company (NYSE:GE)’s share price remains quite stable, it has a forward dividend yield of 3.6%, which is quite high compared to the 1.99% forward dividend yield of the S&P 500. In addition, analysts consider General Electric Company (NYSE:GE)’s valuation to be quite appealing at the moment, making it a great income stock.
Disclosure: none.
