We track quarterly 13F filings from hedge funds and other notable investors including Joel Greenblatt, the author of several investing books, founder of Value Investors Club, and former manager of Gotham Capital. We use our database of filings to develop investment strategies- for example, we have found that the most popular small caps stocks among hedge funds generate an average excess return of 18 percentage points per year (learn more about our small cap strategy). The information from 13Fs can also be used to see which stocks individual managers such as Greenblatt like in a number of areas, including dividend stocks. Income investors can then review these high-yielding stocks and do further research on any interesting companies. Here are five stocks which Greenblatt’s Gotham Asset Management reported owning in his filing for the beginning of January which pay yields of 3% or higher (or see the full list of stocks from the 13F):
Greenblatt increased his holdings of Raytheon Company (NYSE:RTN) by 21% to about 300,000 shares; the aerospace and defense company was his largest single-stock position by market value. The stock trades at 11 times earnings, whether we use trailing numbers or forward estimates, as the financial community expects the company to be hit hard by cuts in U.S. military spending. Raytheon Company (NYSE:RTN) pays a dividend yield of 3.8%, though we’d note that peer Lockheed Martin Corporation (NYSE:LMT) has an even higher yield. Adage Capital Management, managed by Phil Gross and Robert Atchinson, owned 4.2 million shares of Raytheon Company (NYSE:RTN) (research more stocks Adage likes).
The filing disclosed ownership of about 780,000 shares of networking and communication devices company Cisco Systems, Inc. (NASDAQ:CSCO). Cisco Systems, Inc. (NASDAQ:CSCO)’s most recent quarterly report, for the fiscal quarter ending in January, showed revenue up 5% compared to the same period in the previous fiscal year and a larger increase in net income. With low earnings multiples- the trailing P/E is 12, for example- it could be a good value prospect. Cisco Systems, Inc. (NASDAQ:CSCO) had been one of the most popular tech stocks among the filers which we track in our database in the fourth quarter of 2012 (find more tech stocks hedge funds loved).