First Eagle Investment Management has recently filed its latest 13F form with the SEC, which revealed that at the end of June, the value of the firm’s public equity portfolio stood at $41.96 billion, down slightly from $41.98 billion at the end of the previous quarter. A total of 22 new positions were initiated during the trimester, the largest of them being in Danaher Corporation (NYSE:DHR), FMC Technologies, Inc. (NYSE:FTI), and PepsiCo, Inc. (NYSE:PEP), which we’ll look at in this article.
First Eagle’s history dates back to 1864 when it was founded in Dresden by the Arnhold brothers. Currently the fund has about $100 billion worth of regulatory assets under management. The company is currently managed by Chairman and Chief Investment Officer John Arnhold and President and CEO Bridget Macaskill.
But why do we track the activity of hedge funds and other prominent investors like First Eagle? From one point of view we can argue that hedge funds are consistently underperforming when it comes to net returns over the last three years, when compared to the S&P 500. But that doesn’t mean that we should completely neglect the hedge funds’ activities. There are various reasons behind the low hedge fund returns. Our research indicated that hedge funds’ long positions actually beat the market. In our back-tests covering the 1999-2012 period hedge funds’ top small cap stocks edged the S&P 500 index by double digits annually. The 15 most popular small cap stock picks among hedge funds also bested passive index funds by around 65 percentage points over the 35 month period beginning in September 2012, returning 123% (read the details here).
During the June quarter, First Eagle acquired some 2.59 million shares of Danaher Corporation (NYSE:DHR) valued at $221.28 million, representing about 0.53% of the fund’s portfolio value. So far this year, the stock price of the $61.75 billion industrials company has appreciated by 5.51%, which is nearly the same as the 5.78% gains of the diversified industrials segment during the same period. Morgan Stanley analyst Nigel Coe recently upgraded Danaher Corporation (NYSE:DHR) to ‘Overweight’ from ‘Underweight’, and raised the price target to $100 from $93. Coe believes that Danaher’s recent $13.8 billion purchase of Pall Corp. will drive double-digit free cash flow and EPS growth for the company through 2020. Larry Robbins’ Glenview Capital is the largest stockholder of Danaher Corporation (NYSE:DHR) within our database as of March 31, holding about 3.63 million shares valued at $307.82 million.