It is that time again. Institutional investors must file their Form 13-f with the Securities and Exchange Commission by the end of tomorrow, and the early filings have been coming in fast and furious.
This filing period, which comes four times a year, allows us to peek inside the buying and selling activity of the best value investors, distressed investors and activist investors, to see what they have been doing with their fund assets. Talking-head interviews are nice, but seeing what these people are actually doing with money is even more instructive.
When I first started doing this, very few people took the time to track the filings, but that has changed. Much of the information is all over the web within minutes of the filing being posted at the SEC website. The information is still very useful, but you need to be a little more careful about investigating and trading the stocks we find.
One of the more widely followed investors is Seth Klarman of the Baupost Fund. Given his long track record of success, that is understandable. I was delighted to see that in the second quarter, Baupost initiated a position if one of my favorite energy names by picking up 1 million shares of Hess (HES). The fund also added to its gold-mining names by adding to its stakes in Allied Nevada Gold (ANV) and NovaGold Resources (NG) during the quarter.
Klarman also bought 15 million shares of the troubled insurance and financial services concern Genworth Financial (GNW). His fund also continued to buy Hewlett-Packard (HPQ) and BP (BP). When tracking Baupost's moves, keep in mind that less than $4 billion of the $25 billion fund is in equities. The rest is in debt securities, real estate and other investments. You won't be able to match his performance just by tracking his stock moves.
Donald Smith & Co. is a deep-value investing firm that I like to follow. Smith's moves are less followed than Klarman's, but I have stolen some solid ideas from Smith over the years. He was also adding to his gold-mining stake in the second quarter. His firm bought more shares of Yamana Gold (AUY) and added a new potion in AuRico Gold (AUQ).
The firm more than doubled its holdings of the troubled electronics retailer Radio Shack (RSH) in the three-month period. In a double bet on airlines and Europe, Smith bought shares of Air France (AFLYY). At first glance, the stock looks very cheap, and I am intrigued by the idea, as non-financial European stocks have some long-term appeal. Other new buys in the quarter included Ruby Tuesday (RT), NRG Energy (NRG) and Banner (BANR).
One filing I always check is the one from MFP Investors, the firm run by value investing legend Michael Price. Price continues to accumulate regional and community bank stocks in his fund. During the second quarter, he bought West Coast Bancorp (WCBO), Investors Bancorp (ISBC) and Northeast Bancorp (NBN). He also more than doubled his stake in Boston Scientific (BSX), a stock that has seen recent CEO buying and appears to finally be on the verge of a real turnaround. Like many other value investors, he appears to be seeing some value in large tech stocks. His firm bought more Intel (INTC) and added a new position in Dell (DELL) in the second quarter.
A new must-read filing is from Paul Isaac of Arbiter Partners. Walter Schloss' nephew reduced his overall equity exposure by about 20% during the quarter. He remains short highfliers such as Salesforce.com (CRM), Tesla Motors (TSLA) and Green Mountain Coffee Roasters (GMCR). His new positions included private-equity firm Blackstone (BX) and Xerox (XRX). He also owns several gold miners, including Newmont Mining (NEM) and Agnico-Eagle Mines (AEM). I also noticed that he holds a lot of small banks and added at least one new microcap community bank in the quarter.
My big takeaway so far this quarter is that a lot of very smart people are buying gold-mining stocks. As I noted yesterday, it is one of the worst-performing sectors so far this year. I am far from a gold bug, but it looks like I need to spend some time investigating the mining companies. I also note that some of the smartest investors in the world are also stockpiling little banks for the "trade of the decade."
As I go through the flood of filings today and tomorrow, I will post and tweet any interesting findings.
