Stacks of Ideas From the Big Boys

 | Aug 15, 2013 | 12:30 PM EDT  | Comments
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It's that time again. Throughout the course of this week, the newest batch of 13F SEC filings are set to be filed. To me, these reports are among the most important sources of market information you can get: Rather than focus on what forecasters are predicting, 13F filings directly tell you what investors are doing with their money. It doesn't get more helpful than that. 

Below is snapshot of some noteworthy moves by a number of notable investors. The value in 13Fs comes from viewing as many of them as you can while you focus on successful investors, rather than on large institutions. For an example, Fidelity's 13F -- which covers all Fidelity Funds -- consists of more than 5,000 positions. 

We'll start with Warren Buffett's Berkshire Hathaway (BRK.B). The firm seems to be liquidating his positions in Kraft Foods (KFT), and Mondelez (MDLZ), a pair of companies that resulted from Kraft's 2012 decision to split its business in two. Buffett has reduced his Kraft position by 88%, and has exited from 92% of Mondelez. For his big buy, meanwhile, he upped his stake in General Motors (GM), by 60% to $1.4 billion. This dollar figure suggests that it was the Oracle himself who pulled the trigger, and not his two new investment lieutenants. 

Then there's Seth Klarman of the Baupost Group, who has been vocal about his disdain for the Federal Reserve's easy-money policies and the market deterioration that he says these actions will ultimately bring. Klarman seems to have remained bullish on gold, as Baupost has added new (very modest) positions in gold-mining stocks Yamana Gold (AUY) and Kincross Gold (KGC). On the other hand, he exited his position in News Corp. (NWSA) -- a very interesting move, as this had been the fund's largest position by a mile for quite some time. These moves aside, Klarman's most notable change was a new $600 million stake in Micron Technology (MU). 

In contrast to Klarman's gold moves, hedge fund manager John Paulson cut his gold positions by more than half in the second quarter. But Paulson had been running a purely dedicated gold fund, and I suspect the reduction was likely due to the fund's poor performance, given the drop in the price of the yellow metal this year. Paulson's most notable bet, off-limits to most other folks, is his deal to completely acquire Steinway Musical (LVB) -- his $40-per-share bid topped KKR's (KKR) earlier bid of $35 just a few weeks ago. Assuming the deal closes, this will be the first time Paulson will ever buy an entire company. Shares in Steinway currently trade for around $41. 

Finally, we come to Nelson Peltz -- one of several major activist investors, all of whom seem to be covered by Carl Icahn's shadow these days. That notwithstanding, Peltz has disclosed a stake in chemical company DuPont (DU), and this is now a name worth following. Trading at 12x earnings, and with a dividend yield of 3%, DuPont's valuation clearly hasn't moved along with the market. Perhaps Peltz will be the guy to shake things up.

I still have more batches of 13Fs to peruse. Stay tuned for other intriguing bets.

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