SAC Capital Advisors is a diversified, research-driven investment management firm, with assets under management of $20.73 billion as of March 31. It has performed well since its inception, generating an average annual return of 25%, but sustained substantial losses during the 2008 financial crisis.
By tracking its movement, investors may find good investment opportunities. As per its recent 13F filings with the SEC, Suncor Energy Inc. (USA) (NYSE:SU), Amazon.com, Inc. (NASDAQ:AMZN), and EQT Corporation (NYSE:EQT) are the top three holdings of SAC Capital Advisors. These companies, accounting for 3.56% of its portfolio, are adopting different strategies which provide good prospects for long-term growth.
Debottlenecking with a meaningful hike in dividends
Suncor Energy Inc. (USA) (NYSE:SU), an Alberta-based oil sands producer, is planning production growth of its oil sands through a capital-efficient debottlenecking program. It is increasing capacity at low cost instead of building a new facility. For this project, the company will invest $3.3 billion this year. Production will increase by improvement in base facilities, optimization of in-situ operations, better logistics, and infrastructure connectivity.
Under this program, production is increased at existing facilities through the improvement and modification of existing equipment. This will increase efficiency of oil sands production, adding 100,000 barrels per day at a cost of $20,000 – $30,000 per day over the next four years. The company is also debottlenecking its operations at Firebag.
Suncor Energy Inc. (USA) (NYSE:SU) increased its production to 357, 800 barrels per day from its oil sands operations in the first quarter ending in March of 2013, compared with 305,700 barrels per day, year-over-year. The increase in production was mainly due to an upgrade of its Firebag facility. With improvements to its facility, operating cost has decreased to $34.80 per barrel in first quarter from $38.10 per barrel in the same quarter a year ago. Suncor Energy Inc. (USA) (NYSE:SU) also plans oil production expansion of 20,000 barrels per day in Mackay River in 2014 under this program.
On April 29, 2013 Suncor Energy Inc. (USA) (NYSE:SU) announced a 54% hike in its quarterly dividend, the highest dividend increase in the company’s history. The quarterly dividend has increased to $0.20 per share from $0.13 per share. Annual dividend of $0.80 per share indicates dividend a yield of 2.5%, which is in the range of the average 2.8% yield of peer groups in Canada. Its target is to distribute 20%-30% of earnings in the form of dividends. Suncor Energy Inc. (USA) (NYSE:SU) estimates its free cash flow yield will rise to 5.7% in 2014 from 2.9% in 2013. It will further increase dividend next year with a rise in cash flow.
Growth from global expansion and new launch
Amazon.com, Inc. (NASDAQ:AMZN), the e-commerce and cloud company, has expanded its Appstore for Android in 200 countries. Its Appstore for Android is now available internationally in countries like Brazil, Canada, Mexico, India, and South Africa. This expansion gives millions of customers access to direct purchases of apps and games from the Amazon.com, Inc. (NASDAQ:AMZN) Appstore on Android phones. Developers are currently getting strong monetization through the Amazon.com, Inc. (NASDAQ:AMZN) Appstore due to the company’s large customer base and leading e-commerce features like one-click purchasing. The Appstore for Andriod expansion will also allow new developers to distribute their apps and games. With this expansion, Amazon.com, Inc. (NASDAQ:AMZN)’s revenue will rise to $11.73 billion this year and $12.43 billion next year, up from $10.91 billion in last year.
The company is enhancing its footprint in emerging markets with a focus on China. On June 7, 2013 it launched Kindle e-readers and tablets in China. The Kindle Fire HD tablet and Kindle Paperwhite e-reader will be sold through its Chinese website at a reasonable price compared with competition from Apple Inc. (NASDAQ:AAPL) and Samsung Electronics Co., Ltd. (KRX:005930).
