Billionaire Daniel Och's New Purchases

Meena is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Daniel Och started Och-Ziff Capital Management almost twenty years ago, and it has become one of the largest institutional managers of alternative assets since then. A subsidiary of the firm is OZ Management, a fund that must comply with the SEC’s quarterly requirements of position disclosures. We take keen interest in these holdings, as we have found that the most popular small-cap stocks amongst hedge fund managers can handily outperform the market (see here for our double-digit return strategy). OZ Management initiated a number of new positions in Q4 2012; read below to see some of the biggest and best additions.

News Corp. (NASDAQ: NWSA) received a $214 million allocation from OZ this past quarter, amounting to less than a percent of the fund’s portfolio. The multimedia enterprise continues to expand its wide breadth of cable offerings and business divisions, helping to push the stock up over 50% in the last twelve months. News Corp.’s most recent earnings release on Feb. 6 unveiled growth across cable and television operations, and positive sentiment for the publishing division as well. The company plans to break up into separate publishing and entertainment companies by the end of this year. Billionaire Seth Klarman of Baupost Group keeps 6.6% of his portfolio in NWSA.

Express Scripts Holding Company (NASDAQ: ESRX)
is a healthcare administration and management services provider with a market cap of $48 billion. ESRX has a respectable following amongst the funds we track, with 74 funds claiming ownership. Recent analyst activity includes a downgrade to Neutral by Macquarie on the twentieth of last month. ESRX took a 24% spill after revealing a large revenue miss in its Q3 earnings report last November; this latest report for Q4 showed that earnings and revenue were much more in line with Wall Street’s expectations and displayed a bullish 74% jump in net profit. Israel Englander of Millennium Management owns over 800,000 shares of ESRX in his fund.

Coca-Cola Enterprises, Inc. (NYSE: CCE)
is the European remainder of what used to be the dominant bottler of Coke products in the U.S. In 2010, CCE sold its U.S. bottling operations to the Coca-Cola Company (NYSE: KO), keeping its distribution network in Western Europe and Scandinavia. CCE has been a respectable winner for those investors who got in this time last year; the stock returned 30% and still has another 5% to go, according to analysts’ price targets. The company announced in the beginning of February that it would be increasing its quarterly dividend by 25% from $0.16 to $0.20. Billionaire David Harding of Winton Capital Management keeps almost $6 million worth of this stock in his portfolio.

Real estate and relocation service provider Realogy Holdings Corp. (NYSE: RLGY) received an investment of just under $90 million from OZ. The holding company owns and operates realtor brands such as Century 21 and Coldwell Banker. RLGY debuted on the NYSE in the middle of October last year, and has returned 38% to investors since then. Some of Realogy’s notable stakeholders include John Paulson and Apollo Global Management; Apollo owns half of the company. Aforementioned billionaire John Paulson owns over 13.3 million shares in his fund, Paulson & Co (view the fund’s portfolio here).

Global specialty chemicals and materials manufacturer W.R. Grace & Co. (NYSE: GRA) occupies the last spot on our list, as it collected slightly over $80 million of OZ Management’s capital. Although the company’s latest earnings announcement delivered a beat over analyst’s EPS and revenue predictions, revenues suffered a small drop of 3.4% versus the same quarter last year. The stock is currently about 10% away from its projected price targets for a year out; it has already appreciated by 37% in the past twelve months. Billionaire Ken Griffin of Citadel Investment Group recently bumped up his share count by over 43%, according to his latest 13F.

This article is written by Eric Winter and edited by Meena Krishnamsetty. They don't own shares in any of the stocks mentioned in this article.The Motley Fool recommends Express Scripts. The Motley Fool owns shares of Express Scripts. 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!

blog comments powered by Disqus