Fundamental research is any investor’s best friend, but there are many other tools that you may use to expand your investment universe and gather more stock candidates. SEC provides many such tools that may help you use secondary research in a fruitful manner. For example, the SEC issues 13Fs, which shows the purchases made by professional investors such as hedge funds. The 13F is filed quarterly and while the information provided may be a little late, it still provides valuable information. So, let’s take a look at major investments made by two major hedge fund stalwarts.
First, let’s take a look at Ken Griffin’s pick of The Walt Disney Company (NYSE:DIS). Ken Griffin manages Citadel Investment Group and according to the latest 13F, the fund boosted its stake in The Walt Disney Company (NYSE:DIS) by 800% in the last quarter.
What is The Walt Disney Company (NYSE:DIS) up to?
Currently, The Walt Disney Company (NYSE:DIS) is enjoying its moment as its creation ‘Monster University’ is leading at the box office. However, in the recent past, its stock price took a tumble and is currently trading about 10% off its 52-week peak.
The beauty of The Walt Disney Company (NYSE:DIS) lies in its diversification. The company holds interest in movies, entertainment parks, and interactive media. The Walt Disney Company (NYSE:DIS) is currently looking towards the release of its Infinity game, which is expected to shake up the video game industry. The game incorporates real toys interacting with the video game characters and competes directly with Activision Blizzard, Inc. (NASDAQ:ATVI)’s Skylanders.
Disney’s interactive media business has been posting continuous losses, but the tide may turned around if Infinity can replicate the success of Skylanders. Activision Blizzard, Inc. (NASDAQ:ATVI)’s game took 15 months to garner $1 billion worth of sales and became one of the most successful video games targeted towards younger audience. Disney will also be able to build synergy between its various business segments as Infinity will feature characters like Jack Sparrow. Infinity received good reviews at E3 and looks like it has a good future ahead.
Why invest in Disney
Disney reported robust results for its first quarter, with 10% increase in revenue on YoY basis. Its pretax income also grew 21%. The stock itself has appreciated over 30% in the past 12 months, despite witnessing some sell-off in the last one month. Its Price to earnings ratio is below 19, which is in line with the industry average. While the stock provides good capital growth, it also offers a 1.20% dividend yield. The company currently has a dividend payout ratio of only 23%, leaving room for future dividend growth.
With movies like Iron Man 3 and Monster University making a splash, the company should announce good results. On the flip side, Disney is set to see more competition and the growth rate has been on the decline for quite some time. At the very same time, the company is in a robust position. Any pullback in Disney’s stock price can be used as a good entry point.
Nokia Corporation (ADR) (NYSE:NOK) emerged as a favorite of Louis Moore Bacon of Moore Capital Management. The Finnish company is generally regarded as down and out but its stock has gained over 59% in the past 52 weeks.
It is not just Louise Moore showing interest in Nokia Corporation (ADR) (NYSE:NOK), but apparently Microsoft Corporation (NASDAQ:MSFT) is also interested in the company. Rumors suggest that Microsoft Corporation (NASDAQ:MSFT) held discussions to acquire Nokia Corporation (ADR) (NYSE:NOK)’s phone business. The first thing to note is that Microsoft Corporation (NASDAQ:MSFT) is not looking to acquire all of Nokia Corporation (ADR) (NYSE:NOK), if it is going to acquire it at all. It is only considering the smartphone segment. However, the veracity of this rumor is highly questionable. At the very same time, Nokia Corporation (ADR) (NYSE:NOK) has also been approached by Huawei.