Hedge Funds Have Bought TiVo and More
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While we wait for 13F filings to reveal a more complete picture of what hedge funds and other notable investors owned at the beginning of 2013 (very few of these filings have been released early), we can still get a picture of what fund managers are doing with 13D and 13G filings. These documents disclose when an institutional investor owns over 5% of the outstanding shares of a company, or when they make significant changes to such a position, and generally must be filed fairly quickly. As a result investors have a fairly recent buy recommendation from a fund, though of course it isn’t wise to blindly follow even the most successful investors as their performance depends on the entire set of trades they are making (including those in larger-cap stocks which don’t often appear in 13Ds and 13Gs). Here are five stocks hedge funds have bought recently:
Billionaire Ken Griffin and his team at Citadel Investment Group own 6.6 million shares of TiVo (NASDAQ: TIVO) according to Citadel’s most recent 13G filing. The 13F from the end of September reported a position of just over 1 million shares (see Griffin's favorite stocks). TiVo remains unprofitable, at least if we strip out proceeds from litigation (some analysts argue that lawsuits will actually be a reliable source of income for the company, but we’d rather not depend on that line of thinking) and sell-side consensus is for negative profits in the forward fiscal year ending January 2014 as well. 12% of the outstanding shares are held short and we think it would be best to avoid the stock.
Colony Financial (NYSE: CLNY), a real estate investment trust, can now count billionaire Steve Cohen and his SAC Capital Advisors among their major shareholders after SAC disclosed a position of 3.3 million shares (or just over 5% of the company). This is up from 340,000 shares at the end of the third quarter (check out Cohen's stock picks). As a real estate investment trust, Colony distributes much of its income to shareholders and this results in a considerable dividend yield- almost 7% at this time. The company invests in commercial mortgage loans and other debt tied to real estate.
Activist investor Carl Icahn added 4 million shares of CVR Refining (NYSE: CVRR) at an average price of $25 per share, and now owns 124 million shares of the stock. VR became independently traded on January 17th and was formerly a business unit of CVR Energy (CVI), a core Icahn holding. Research more of Icahn's largest positions. CVR Refining, as implied, is a refiner of petroleum products. It is organized as a master limited partnership (MLP), a class of business that is increasing in popularity in the energy sector.
Royce & Associates, a fund managed by Chuck Royce, increased its stake in Seacor Holdings, (NYSE: CKH), a marine transportation company. Royce now owns about 6% of Seacor. While the company’s top line numbers appear poor, the headline decrease in revenue is due to worse numbers in commodity trading and earnings have actually been up. The stock carries trailing and forward P/Es of 23 and 17, respectively, with continued bullishness from the Street resulting in a five-year PEG ratio of 0.8. We noticed that many of Seacor’s peers actually appeared to be cheaper in terms of earnings or EBITDA multiples. Read more about Seacor and its peers.
Michael Johnston’s Steelhead Partners reported a position of 1.8 million shares in Rudolph Technologies (NASDAQ: RTEC). The fund had not owned any shares at the end of September (find stocks that Steelhead did own). Rudolph focuses on providing defect inspection equipment to the semiconductor industry. The company’s revenue and net income were up strongly in the third quarter of 2012 versus a year earlier; pretax income actually doubled. In addition, Rudolph has over $170 million in cash, cash equivalents and marketable securities on its balance sheet and this makes up a considerable portion of its market cap. The trailing P/E is 22, but we think the cash and recent growth make it worth considering.
This article is written by Matt Doiron and edited by Meena Krishnamsetty. They don't own shares in any of the stocks mentioned in this article. The Motley Fool has no position in any of the stocks mentioned. 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!