Here's What This $8.6 Billion Money Manager Has Been Buying and Selling
Oct 24th 2013 6:31PM
Updated Oct 24th 2013 6:32PM
Every quarter, many money managers have to disclose what they've bought and sold via "13F" filings. Their latest moves can shine a bright light on smart stock picks.
Today let's look at Kornitzer Capital Management, founded in 1989 and based far from Wall Street, in Kansas. It's a full-service investment-management firm overseeing more than $8.9 billion for institutions, mutual funds, and private clients. Kornitzer gets all its investment research in-house, explaining :
We use a variety of fundamental evaluation methods while dissecting vast amounts of data, visiting companies as well as their competitors and suppliers, and writing formal research reports. Lastly, we build proprietary financial models and use multiple valuation methodologies to derive a security's intrinsic value.
The company's reportable stock portfolio totaled $8.6 billion in value as of Sept. 30, 2013.
So, what does Kornitzer Capital's latest quarterly 13F filing tell us? Here are a few interesting details:
The biggest new holdings are Fusion-io and AMC Networks. Other new holdings of interest include Agilent Technologies . Fusion-io is focused on technologies such as flash memory and solid-state drives. Its latest quarter featured solid revenue and earnings, but management sharply lowered expectations and also noted the departure of the company's CFO and head of sales. Not long after its last earnings report, its CEO and CMO, both co-founders of the company, also departed. With its industry consolidating, some see Fusion-io as an acquisition target.
Bioanalytic and measurement specialist Agilent Technologies has some investors excited about its plans to split itself in two, with the Agilent name attached to its life sciences, diagnostics, and applied-markets businesses and the new company focused on electronic measurement technology. Agilent Technologies generates more than $1 billion in free cash flow annually, and its top line has been growing, but its earnings have not been rising consistently in recent years.
Among holdings in which Kornitzer Capital Management increased its stake was Philip Morris International . The international counterpart to domestic tobacco giant Altria, it yields 4.3%. Philip Morris' third quarter featured estimate-topping earnings, along with disappointing revenue and lowered projections. It has been challenged by shrinking cigarette volume but has countered that by raising prices. On the plus side (for the company, at least), some regions such as Asia are experiencing growth in smoking rates. Nations with strong growth in smoking include Indonesia, Pakistan, China, Philippines, Mexico, and Korea, per Zacks research. Bulls like Philip Morris' innovation and share buybacks.
Kornitzer Capital Management reduced its stake in lots of companies, including LinnCo and Halcon Resources . LinnCo is an oil and gas company with a dividend yield of 9.9%. It largely exists to own units of the master limited partnership Linn Energy and convert distributions into dividends. Linn and LinnCo aim to acquire Berry Petroleum, but the SEC has been looking into that deal. (Linn is also building its position in the promising Permian Basin.) Bulls like Linn's cash generation and growth prospects, but bears worry about operational mishaps and see greener pastures elsewhere.
Halcon Resources is a promising oil and gas company, operating in the lucrative Bakken region and elsewhere, such as in Texas. It has been growing rapidly, but it also carries significant debt. Halcon has been successfully tweaking its operating processes in order to boost production. Some see Halcon Resources as a likely acquisition target.
Finally, Kornitzer Capital's biggest closed positions included MKS Instruments and Lufkin Industries.
We should never blindly copy any investor's moves, no matter how talented the investor. But it can be useful to keep an eye on what smart folks are doing. 13F forms can be great places to find intriguing candidates for our portfolios.
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The article Here's What This $8.6 Billion Money Manager Has Been Buying and Selling originally appeared on Fool.com.Longtime Fool contributor Selena Maranjian, whom you can follow on Twitter, owns no position in any stocks mentioned. The Motley Fool recommends AMC Networks. The Motley Fool owns shares of Philip Morris International. 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.