5 Stocks Billionaire Ken Fisher Bought Last Quarter
Jan 23rd 2013 10:11PM
Updated Jan 24th 2013 7:20AM
Warren Buffett's right-hand man and business partner Charlie Munger offers this advice for successful investing: "Carefully look at what other great investors have done." Luckily for us, great investors are required to divulge changes they make to their portfolios on a quarterly basis. These SEC 13-F filings allow us to peek into the stock comings-and-goings of money pros, including multibillion-dollar hedge fund manager Ken Fisher.
Let's take a more in-depth look at a few stocks that Fisher loaded up on, according to Fisher Asset Management's most recent quarterly 13F SEC filing.
In the fourth quarter, Fisher increased his positions in St. Jude Medical and Darling International . St. Jude recently received a warning letter from the U.S. Food and Drug Administration regarding design practices and quality systems at a California facility. This was widely expected after the FDA released a report in the fourth quarter regarding concern over the design and testing of the company's Durata lead. This led to a stock pullback, which Fisher likely saw and took advantage of.
Revenues and earnings were both down last quarter for Darling International. The Texas-based company provides recovery and recycling services of cooking oil and bakery waste for the food industry. Darling faces lower finished product prices, which may continue to dampen earnings. But its biodiesel joint venture with Valero Energy shows promise.
St. Jude and Darling possess forward price-to-earnings ratios of 11 and 13, respectively. Since the P/E ratio of the S&P 500 is currently near 17, these two stocks appear undervalued. Our Motley Fool CAPS community highly rates both as 5-star (out of 5) stocks.
Fisher added Digital Realty Trust , Elizabeth Arden , and Hain Celestial to his portfolio in the fourth quarter. Geographically diversified REIT Digital Realty Trust will likely take advantage of the explosive growth in data storage. Global data center traffic is projected to grow fourfold by 2016. The San Francisco-based REIT invests in data center properties, such as corporate IT offices, and trades at a forward price-to-earnings ratio of 14.
Beauty products company Elizabeth Arden looked good enough for Fisher to scoop up some shares. Last quarter, net sales increased nearly 14% year over year and were aided by a launch of revamped Elizabeth Arden products. The company appears undervalued, boasting a forward price-to-earnings ratio of 15.
On the other hand, Hain Celestial appears overvalued, trading at a forward price-to-earnings ratio of 19. The company strives to gain market share in the very competitive but profitable natural and organic food industry. Our Motley Fool CAPS community rates Hain a 5-star stock. Meanwhile, it considers both Digital Realty Trust and Elizabeth Arden as 2-star stocks.
Foolish bottom line
Of these stocks, I like Darling and Digital Realty Trust right now. I think the long-term trends for the industries and potential for growth are extremely compelling. But don't simply take Fisher's (or my) word as gold. Conduct your research, determine your take on these companies, and formulate your own investing thesis.
The article 5 Stocks Billionaire Ken Fisher Bought Last Quarter originally appeared on Fool.com.Fool contributor Nicole Seghetti has no position in any stocks mentioned. The Motley Fool recommends Darling International and Hain Celestial. The Motley Fool owns shares of Darling International, Hain Celestial, and St. Jude Medical. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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