Picking Through 13F Picks

 | May 14, 2014 | 4:30 PM EDT  | Comments
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Stock quotes in this article:

gntx

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brk.a

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brk.b

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tecua

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dgit

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bpz

Form 13F season is under way and, so far, the filings with the Securities and Exchange Commission have been quiet -- at least among the filings that I pursue. To be fair, I'm sure many managers have been buying and selling among the couple of dozen investors that I pay close attention to. In the coming days, the picture will come into greater focus.

Martin Capital Management is small fund I enjoy looking through. Based in Indiana, Frank Martin is the typical old-school value investor. He analyzes fundamentals. He is conservative to a fault, but you won't find his investors complaining. But Martin was very quiet in the first quarter: no positions and very little movement inside the portfolio. The largest positions continue to be Gentex (GNTX) and Berkshire Hathaway (BRK.A, BRK.B). The interesting thing about Gentex is that shares have fallen back a bit to $29 per share from $34. To be sure, Martin was buying shares when they were trading in the high teens, and yours truly was telling Real Money readers about it.

Roumell Asset Management is another boutique investment fund that is very intensive in its research and analysis. Roumell was responsible for two previous ideas: Tecumseh Products (TECUA) and Digital Generation (DGIT). Both turned out to be multi-baggers, although Tecumseh has since fallen back. Roumell hasn't filed a 13F yet, but it has released its quarterly letter. In it, the firm announced two new equity positions. 

The first was software developer SeaChange International (SEAC). The software helps many of today's leading cable operators manage and distribute software. Shares trade around $9, near a 52-week low and off from a recent high of $14. The company has a market cap of $300 million with net cash of more than $100 million.

The second new position was U.S. gas and oil exploration company BPZ Resources (BPZ). This is an asset-play bet for Roumell. Shares trade for about $3, valuing the company at $345 million, and with an enterprise value of $470 million. According to Roumell, the net present value of the proved reserves alone is $6 per share. For whatever it is worth, an analyst recently upgraded the stock with a price of $7, citing an improving cost structure amid better quarterly results.

Roumell, or any investor for that matter, will never be right all the time. But investors hungry for quality ideas to pursue should give these picks a closer look. If they are in the Roumell portfolio, it means they have been screened intensively.

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