In May, Joel Greenblatt- the former manager of Gotham Capital, who many investors might recognize as the author of You Can Be A Stock Market Genius– filed his 13F for the first quarter of 2013 with the SEC, disclosing many of his long equity holdings as of the end of March (see Greenblatt’s stock picks). We like to use 13Fs both as a source of information for investment strategies (we have found, for example, that the most popular small cap stocks among hedge funds generate an average excess return of 18 percentage points per year) and as a source of initial investment ideas. We screen top managers’ filings according to a number of criteria, including dividend stocks, so that investors can do further research on any interesting names. Read on for our quick take on Greenblatt’s five largest holdings as of the end of March with dividend yields of more than 3% at current prices and dividend levels.
The value investor initiated a position of about 440,000 shares in Seagate Technology PLC (NYSE:STX). The hard disk drive company experienced a 21% decline in revenue in its most recent quarter (which ended in March) compared to the same period in the previous fiscal year, with earnings down over 60%. The dividend yield is 3.6%, and if Seagate Technology PLC (NYSE:STX) could stabilize its business it could be a value play given its low earnings multiples. Billionaire David Einhorn’s Greenlight Capital reported owning 5.4 million shares of Seagate in its own 13F filing (check out which other stocks Einhorn reported owning).
Greenblatt slightly increased his holdings of SAIC, Inc. (NYSE:SAI), a $4.6 billion market cap security and intelligence company, to a total of 1.2 million shares. SAIC, Inc. (NYSE:SAI) is currently planning to break up into two companies, one of which would focus on serving government customers and one of which would handle other opportunities. In Greenblatt’s book he mentioned spinouts and breakups as potential sources of value (read more about investing in spinouts). Recent quarterly dividend payments have been 12 cents per share, making for a yield of 3.7%, though we would be concerned about the potential effects of lower U.S. government spending.