Five Stocks Recently Sold By Manning and Napier

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Established in 1970 by Bill Manning and Bill Napier, Manning & Napier is on of the largest fund management companies in the U.S. For more than four decades, Manning & Napier has been leading institutional and individual clients towards their financial goals. Manning and Napier have an opportunistic investment style. The management aims to assist investors to meet a broad range of investment requirements even in the most challenging environments. As of the end of September, the hedge fund managed $44.30 billion in assets for individuals, union pension and annuity funds, corporate benefit plans, endowments, and 401(k) plans.

Manning & Napier employ's a team-based strategy, not a "star" system. This ends up with greater consistency, objectivity, and continuity. The investment picks are driven by Senior Research Group, a group of 12. All members have an average tenure of around 17 years with the company.

In the third quarter, Manning & Napier opened up positions in 20 stocks and sold-out 22 stocks. Its portfolio is hefty on technology (24.71%), services (17.73%), energy (17.61%), transportation (7.82%), and financials (5.04%). It is worth checking what goes into the 13-F filing of such a huge fund. The big sells for the Q3 are Dr. Reddy's Laboratories (NYSE: RDY), Walt Disney (NYSE: DIS), Colgate-Palmolive (NYSE: CL), FedEx (NYSE: FDX), and Unilever PLC (NYSE: UL). I briefly examined each of these stocks to see whether or not these companies are worth selling.

Dr. Reddy's Laboratories

Sector

Healthcare

Industry

Drug Manufacturers - Specialty & Generic

Market Cap

$5.90B

Beta

1.12

Operating Profit Margin

19.24%

Earnings Per Share Growth Rate

22.81%

Debt/Equity Ratio

0.55

ROI

22.94%

ROE

28.71%

Source: Finviz.com

With headquarters in India, Dr. Reddy's Laboratories manufactures and develops generic pharmaceuticals. The company operates in three divisions: proprietary products, global generics, and active chemical ingredients. The pharmaceutical services and global generics make up most of the corporation's revenue at 25% and 73%, respectively. Nearly 82% of Dr. Reddy's sales are structured outside of India, with almost 24% from Europe and 29% from North America.

The asset manager initiated a position in Dr. Reddy in Q1 with a purchase of 1.32 million shares, amounting to about $4.58 million. Manning & Napier had increased its shares by 0.35 million in the second quarter of the current year. However, this quarter Manning & Napier sold 100% of its holdings in Dr. Reddy.

We anticipate many small generic manufacturers will be mashed by the dominant large scale competitors, like Teva and Mylan. However, Dr. Reddy's low-cost edge will keep it in the game and make it a significant threat. On the other hand, the company is not showing a high dividend yield compared to peers like Novartis and Teva Pharmaceutical. Currently, Dr. Ready has a dividend yield of 0.70% and pays a dividend of $0.22 per share. On the other hand, the asset manager increased its position in Novartis by 6% due to attractive returns. Currently, Novartis shows a dividend yield of 4.05%.

Walt Disney

Sector

Services

Industry

Entertainment - Diversified                   

Market Cap

$87.37B

Beta

1.18

Operating Profit Margin

21.90%

Earnings Per Share Growth Rate

6.85%

Debt/Equity Ratio

0.36

ROI

10.48%

ROE

14.73%

Source: Finviz.com

Disney has the rights of most popular characters ever designed, including Winnie the Pooh and Mickey Mouse. These characters and some others are featured in numerous theme parks Disney possesses or licenses around the globe. The company makes animated and live-action films under various labels and owns ESPN, ABC, and the Disney Channel. Disney also owns 42.5% of A&E, Lifetime Networks, and the History Channel. Disney generates about 25% of its revenue from outside the U. S.

Manning & Napier sold out 20% of its investment in Disney in Q3. Nonetheless the fund manager still holds a major position in the company. The hedge fund increased its stake in Disney in the previous quarter. Disney is a consistent favorite of the hedge fund in the previous 9 quarters. Disney hiked up their annual dividend to $0.75 from $0.60 , and shares went up accordingly. However, shares failed to break the $50 mark and the stock stays in a state of limbo that started in July. Since then, shares have climbed as high as $53 and dropped as low as $47, but there is not much price appreciation.

Colgate-Palmolive CO

Sector

Consumer Goods

Industry

Personal Products                               

Market Cap

$50.46B

Beta

.44

Operating Profit Margin

22.80%

Earnings Per Share Growth Rate

14.98%

Debt/Equity Ratio

2.09

ROI

29.47%

ROE

95.25%

Source: Finviz.com

Colgate-Palmolive Corporation is a consumer product corporation with yearly revenue of $17 billion. It is also the globe's leading toothpaste producer. The corporation has a diverse operational structure and revenue base.

Manning & Napier reduced its holdings in Colgate-Palmolive by 38% in the Q3. As of the end of September, Manning & Napier possesses 0.15 million shares in Unilever. This forms 0.06% of the hedge fund's total portfolio. Colgate-Palmolive earnings for the third quarter were in line with anticipations. However, sales volume increased by 2%, which was lower than what was predicted by the market. The company has a wonderful business model, and we are bullish on it. However, existing valuations are high if we evaluate them with its peers. Many experts advise investors not to buy the stock prior to a valuation/price correction.

FedEx

Sector

Services

Industry

Air Delivery                                        

Market Cap

$28.43B

Beta

1.24

Operating Profit Margin

7.43%

Earnings Per Share Growth Rate

-0.25%

Debt/Equity Ratio

0.16

ROI

8.32%

ROE

13.71%

Source: Finviz.com

FedEx remains the world's largest express delivery firm since 1973. The company derives about two thirds of its revenue from its express division. The company's ground segment delivers small parcels at a lower cost than express, and the freight segment provides less-than-truckload freight services. FedEx Office provides document production and shipping services, and Trade Networks offers freight forwarding services.

Manning & Napier reduced its holdings in FedEx by 82% in Q3. As of the end of September, Manning & Napier possesses 0.17 million shares in FedEx. This forms 0.08% of the total portfolio. FedEx's huge international shipping network would be complicated and expensive to duplicate, providing the corporation a wide economic moat.

Unilever Plc

Sector

Consumer Defensive

Industry

Packaged Foods

Market Cap

$116B

Beta

0.79

Operating Profit Margin

13.35%

Earnings Per Share Growth Rate

4.90%

Debt/Equity Ratio

0.97

ROI

16.40%

ROE

28.45%

Source: Finviz.com

U.K.-based Unilever PLC operates a diversified household and personal product (about 50% of total sales) and package food (about 50% of total sales) company. The company's brands include Knorr sauces and soups, Lipton teas, Hellmann's mayonnaise, and TRESemme hair-care products.

Manning & Napier reduced its holdings in Unilever by 27% in Q3. As of the end of September, Manning & Napier possesses 13.26 million shares in Unilever. This forms 2.51% of the hedge fund total portfolio. In the earlier period, an extremely complex and decentralized structure stuck Unilever's capability to realize the profitability and growth. But, we think management's initiatives to root out inefficiencies looks to be gaining traction, in spite of numerous exterior headwinds.


ecofinstat has no positions in the stocks mentioned above. The Motley Fool owns shares of Walt Disney. Motley Fool newsletter services recommend Walt Disney, FedEx, and Unilever. 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. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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