Top Tech Stock Picks of Quantitative Fund Winton Capital

The fourth-quarter stock market rally appears to overshadow the disappointing previous quarter that had a noticeable impact on the equity portfolios of most hedge funds and other money managers. The deadline for submitting the 13F filings for the September quarter is November 16, so hedge funds have a few more days at their disposal to compile these much-awaited public filings. Winton Capital Group, founded by David Harding in 1997, is one of the investment firm tracked by Insider Monkey that recently filed its 13F filings for the third quarter. Winton Capital seeks for investment opportunities by employing a thorough statistical analysis and mathematical modelling of historical data. The British quantitative investment management firm currently has more than $30 billion in assets under management and oversees an equity portfolio with a market value of $12.64 billion as of September 30. The value of the firm’s equity portfolio increased quarter-on-quarter from $10.89 billion, but it is not entirely clear what stands behind this lift. The following article will lay out a list of Winton’s top tech stock picks at the end of the third quarter and will also discuss their performance over the past few months.

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#5 International Business Machines Corp. (NYSE:IBM)

Shares Owned by Winton Capital Group (as of September 30): 716,208 shares

Value of Holding (as of September 30): $103.83 million

International Business Machines Corp. (NYSE:IBM) represents the twelfth-largest equity holding of Winton Capital at the end of the third quarter. The British investment firm upped its position in the struggling technology company by 85,191 shares between July and September. IBM has been on a decline over the past few years, a fact reflected in its stock performance as well. The tech giant’s revenues have been on a steady decline since 2011, whereas its earnings per share have been higher each year except for 2014. The shares of IBM are dirt cheap at the moment, considering their price-to-earnings ratio of 9.30, which compares to the median of 23.41 for the S&P 500 companies. However, some tend to believe that IBM has spent too much of its cash on buyback programs, which should have been used to grow its businesses instead. Meanwhile, the stock is down nearly 16% since the beginning of the year. Warren Buffett of Berkshire Hathaway, who owns 79.56 million shares in International Business Machines Corp. (NYSE:IBM) as of June 30, has recently asserted that he had no intention of disposing his investment in IBM.

#4 Intel Corporation (NASDAQ:INTC)

Shares Owned by Winton Capital Group (as of September 30): 3.60 million shares

Value of Holding (as of September 30): $108.40 million

It seems that the mathematical models employed by Winton Capital propelled the investment firm to increase its exposure to Intel Corporation (NASDAQ:INTC) in the third quarter. The quantitative asset management firm lifted its stake in Intel by 198,341 shares during the three-month period ended September 30. The shares of Intel are slightly over 8% in the red year-to-date, but several financial services hubs suggest that there is more upside for the stock in the upcoming months. Earlier this year, the world’s largest chip company acquired chip maker Altera Corporation (NASDAQ:ALTR) for $16.7 billion, in an attempt to strengthen its ‘data centers’ business (which is supplying chips that power the world’s data centers). Thus, it seems that the company has been successful in finding growth opportunities beyond the sluggish PC market. Ken Fisher’s Fisher Asset Management reported owning 19.36 million shares of Intel Corporation (NASDAQ:INTC) in the 13F filing for the September quarter.

#3 Apple Inc. (NASDAQ:AAPL)

Shares Owned by Winton Capital Group (as of September 30): 1.03 million shares

Value of Holding (as of September 30): $113.40 million

Winton Capital Group increased its position in Apple Inc. (NASDAQ:AAPL) by 79,289 shares during the third quarter, the stake accounting for 0.90% of its equity portfolio as of September 30. The world’s largest company by market capitalization has seen its shares advance by 5% since the beginning of the year despite facing serious worries about its strong reliance on iPhone sales. Earlier this week, Credit Suisse’s analyst Kulbinder Garcha voiced his concerns about the demand for the freshly-released iPhone 6s via a note to clients. “Apple has lowered its component orders by as much as 10 percent, according to our teams in Asia”, the analyst asserted. As a result, he anticipates that Apple will ship 222 million iPhones in the next calendar year, which is down from his previous estimate of 242 million (see more details). Clifford Fox’s Columbus Circle Investors owns 4.37 million shares in Apple Inc. (NASDAQ:AAPL) as of September 30.

#2 Seagate Technology PLC (NASDAQ:STX)

Shares Owned by Winton Capital Group (as of September 30): 3.60 million shares

Value of Holding (as of September 30): $108.40 million

Seagate Technology PLC (NASDAQ:STX) was the sixth-largest equity position of Winton Capital at the end of the September quarter. The British investment firm boosted its holdings in the data storage company by 741,417 shares or 38% during the latest quarter. The shares of the storage provider have declined 46% since the beginning of the year, mainly owing to the struggling PC market and toughening competition. The stock is currently trading for a trailing P/E ratio of 8.72, which is significantly lower than the ratio of the S&P 500. At the same time, the company’s strong balance sheet, its dominant position within its industry, and its luring dividend yield of 6.9% are several factors that might attract investor interest in the upcoming months. First Eagle Investment Management, founded by Jean-Marie Eveillard, held a 2.59 million-share position in Seagate Technology PLC (NASDAQ:STX) on September 30.

#1 Corning Incorporated (NYSE:GLW)

Shares Owned by Winton Capital Group (as of September 30): 9.47 million shares

Value of Holding (as of September 30): $162.08 million

Corning Incorporated (NYSE:GLW) was the largest equity holding of Winton Capital at the end of the September quarter. The investment firm enlarged its position in the glass maker by a whopping 4.42 million shares during the latest quarter, which accounted for 1.28% of the firm’s portfolio. Just recently, the company announced an accelerated share repurchase agreement, which is pursuant to the existing $2 billion share repurchase program authorized in July. As a result, Corning is set to purchase an additional $4 billion worth of shares. The company also expected to increase its dividend per common stock by at least 10% annually through 2019. It is not entirely clear whether Carl Icahn would criticize the company’s decision to buy back shares, but this step appears to be quite appropriate, considering that the company also committed itself to invest roughly $10 billion in growth opportunities to sustain its solid position within the industry it operates in. Richard S. Pzena’s Pzena Investment Management cut its position in Corning Incorporated (NYSE:GLW) by 2.89 million shares during the September quarter, remaining with 4.79 million shares.

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