Oxstones Investment Club™From Wall Street Journal Site,
Some of the investing world’s top names disclosed their stockholdings on Monday, and there were a few surprises.
Four times a year, many investors who manage more than $100 million are required to disclose holdings in certain types of securities, including stocks, within 45 days of the end of a given quarter.
Most hedge-fund managers and others wait until the last possible moment to make these filings, and the disclosures to the Securities and Exchange Commission cover the quarter ending Sept. 30.
The so-called 13-F disclosures give the public a relatively fresh look inside the portfolios of major money managers such as Warren Buffett, George Soros and John Paulson. They are often the investing public’s first notice that closely watched figures have reversed course on a given sector or major company.
John Paulson
Hedge-fund manager John Paulson drew down holdings in the U.S. financial-services industry last quarter, reporting no stake in Goldman Sachs Group Inc. and reduced stakes in firms including Citigroup Inc., Bank of America Corp. and J.P. Morgan Chase & Co.
Mr. Paulson, who runs Paulson & Co., gave no mention in his most recent Securities and Exchange Commission filing of the 1.1 million-share Goldman stake he previously reported. The filing shows that his Citigroup holdings fell to 424 million shares from 507 million, while Bank of America holdings dropped to 138 million from 168 million and J.P. Morgan Chase to 23.7 million from 25.7 million.
Mr. Paulson was among the first big hedge-fund managers to buy up shares in banks last year, after winning big in bets against subprime mortgages during the financial crisis.
Two other companies in financial services in which Mr. Paulson reported smaller stakes are Capital One Financial Corp. and Marshall & Ilsley Corp.
The hedge-fund manager made a number of other adjustments outside financials. He maintained most of his holdings in gold companies but reported a smaller stake in AngloGold Ashanti Ltd., Africa’s largest gold producer.
He also reported no stake in Exxon Mobil Corp. or Devon Energy Corp., two energy companies whose shares he held last period.
Mr. Paulson also reported new stakes in Genzyme Corp., a takeover target for French pharmaceutical giant Sanofi-Aventis SA; in Anadarko Petroleum Corp., partial owner of the blown-out Macondo well in the Gulf of Mexico; and in Internet security company Symantec Corp.
He trimmed stakes in Comcast Corp. and Starwood Hotels & Resorts Worldwide Inc.
—Brendan Conway
Warren Buffett
Warren Buffett’s Berkshire Hathaway Inc. took a $52 million stake in Bank of New York Mellon Corp. in the third quarter, while reducing or eliminating positions in several other stocks.
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Warren Buffett
Berkshire sold all shares of Home Depot Inc., CarMax Inc., Iron Mountain Inc., NRG Energy Inc. and trash-hauler Republic Services Inc.
Those holdings were among the smaller positions in Berkshire’s investment portfolio; collectively they were valued at about $860 million at the end of the second quarter. Many people who follow Berkshire have long said many of those stocks were likely picked by Berkshire’s other investment manager, Lou Simpson, who is retiring at the end of the year.
If that is the case, Monday’s filing shows Berkshire is repositioning its portfolio to prepare for life after Mr. Simpson. In October, Mr. Buffett announced that Todd Combs, until then a little-known manager of a Connecticut hedge fund, will soon take over some investing duties.
Berkshire also reduced holdings of Comcast Corp., Ingersoll-Rand PLC, Nalco Holding Co., Nike Inc. and Fiserv Inc. Comcast and Nike had been in Berkshire’s portfolio for several years, while Fiserv was a position Berkshire first disclosed just three months ago. All but Nike had been valued at less than $250 million at the end of the second quarter.
“It appears to be a changing of the guard,” said Gerald Martin, an assistant professor at American University’s Kogod School of Business, who has studied Mr. Buffett’s investing history. “It’s interesting timing. It coincides with Lou leaving and the new guy coming on.”
Berkshire increased its investment in Johnson & Johnson by 3% to 42.6 million shares. The holding is valued at $2.7 billion, based on Monday’s closing price.
The firm also increased its stake in Wells Fargo & Co. by 5% to 336 million shares. The holding, already one of Berkshire’s largest, was valued at $9.3 billion Monday after the addition of the new shares.
Berkshire sold a small part of another major investment, Procter & Gamble Co.
Berkshire alluded to the Wells Fargo and P&G transactions in a listing of its top holdings in the company’s quarterly earnings report earlier this month.
Berkshire also sold shares of Moody’s Corp., but the holding listed in the regulatory filing as of Sept. 30 isn’t the latest available. Because of the size of the investment, Berkshire has been required to inform investors when it sells Moody’s stock within days of the transactions, and the most recent filing was Oct. 21.
All told, Berkshire bought $611 million of equity securities in the quarter, and collected $1.82 billion from the sale of portions of the equity portfolio, according to the earlier filing.
Berkshire’s quarterly disclosure of its $48.6 billion U.S. portfolio is scrutinized by professional money managers and amateur investors alike, and Mr. Buffett’s stock picks have the power to move the shares of the companies he is buying and selling.
Bank of New York Mellon shares rose 1.9% to $28.25 in after-market trading. BNY Mellon is a trust-and-custody bank, which generally serves other companies and financial institutions. The stock has risen 7.5% from the end of the quarter to Monday’s close.
Mr. Buffett has warned investors who want to piggyback on his stock picks against assuming all moves in the Berkshire portfolio are his. Portions of the company’s holdings have long been managed by Mr. Simpson, the head of investing at Berkshire-owned car insurer Geico Corp.
While Berkshire spent relatively little on new stocks in the third quarter, the company bought about $2.5 billion of fixed-maturity securities and increased its cash on hand by 23% in three months to about $34 billion.
—Erik Holm
George Soros
Billionaire investor George Soros’s hedge fund bought more shares of blue chips AT&T Inc. and Monsanto Co. in the third quarter.
Mr. Soros, who has said that gold is the ultimate bubble, reduced his direct ownership stake in the SPDR Gold Trust, a gold-backed exchange-traded fund, by 501,300 shares to 4.7 million shares. The position was valued at $600.8 million on Sept. 30. However, he disclosed “call” options on 705,000 shares of the SPDR Gold Trust, which will appreciate in value if shares of the fund rise. Mr. Soros previously reported a 46,389 “shared” holding in the fund, but reported no such position at the end of the third quarter.
The value of Mr. Soros’s stockholdings was $6.7 billion at the end of the third quarter. The fund reported stockholdings worth $5.1 billion at the end of the second quarter. The value changes because of to a combination of market action and share purchases and sales.
Soros Fund Management bought 1.3 million shares of AT&T, raising the value of the position to $51.4 million as of Sept. 30, according to the filing. Mr. Soros also purchased 897,813 shares of Monsanto—his second-largest holding on a dollar basis—during the quarter. The position is now valued at $312.6 million.
The fund also reported a new position in drug maker Dendreon Corp., disclosing it purchased 1.8 million shares valued at $74.8 million at the end of the third quarter. Other new holdings include Mentor Graphics Corp. Mr. Soros disclosed the purchase of 76.5 million convertible notes of the company, valued at $79.5 million.
In a reversal from its second-quarter disclosure, the fund bought 2.1 million shares of pharmaceutical giant Pfizer Inc. Mr. Soros had previously sold five million shares of Pfizer in the second quarter. His position is now valued at $41.4 million.
Additionally, Mr. Soros reported no stake in Best Buy Co. The fund sold 936,895 shares during the third quarter.
—Brett Philbin
David Einhorn
Greenlight Capital Inc., run by hedge-fund manager David Einhorn, in the third quarter bought 525,000 more shares in Apple Inc., and added stakes in Broadridge Financial Solutions, Ingram Micro Inc., and semiconductor solutions provider Verigy Ltd.
The value of Greenlight’s stock holdings was $4.02 billion at the end of the third quarter. The fund manager held $3.32 billion in stock at the end of the second quarter.
The filings showed Greenlight also boosted holdings in offshore drilling company Ensco PLC, home-building and mortgage-banking company NVR Inc., Symmetricom Inc. and reinsurer Transatlantic Holdings Inc.
Meanwhile, the firm exited from several stocks: maker of corporate data-storage equipment EMC Corp. and defense and aerospace company Lockheed Martin Corp.
—Amy Or
Carl Icahn
Billionaire investor Carl Icahn reported Monday he has taken new investments in toy maker Mattel Inc. and building-products maker Masco Corp.
Mr. Icahn, known for his activist stances and battles with boards, said in his 13-F filing that he built up a stake of 2.43 million shares in Mattel and 5.02 million shares in Masco, two bets that lean on the U.S. consumer spending money.
But at the same time, he reported no stakes as of Sept. 30 in two of his more high-profile holdings, fast-food chain Wendy’s/Arby’s Group Inc. and Yahoo Inc.
Last period, Mr. Icahn reported expanding his energy holdings, and he again added to his holdings of oil and natural-gas producer Chesapeake Energy Inc., boosting the stake to 16.64 million shares, from 12.74 million at the end of June. But Mr. Icahn also reported no stakes in Anadarko Petroleum Corp. or Ensco PLC, two companies he reported new stakes in last period.
Among his other new holdings as of the end of September were Commercial Metals Co., with 2.46 million shares, and Motricity Inc., at 4.4 million shares. Mr. Icahn’s son, Brett, recently joined the board of the mobile Internet company Motricity, and the two previously were reported to have discussed it as an investment.
The elder Mr. Icahn also continued to boost his share of Lawson Software Inc., which rose to 16.5 million shares, from 9.5 million last period.
He has been active in his holdings in Lions Gate Entertainment Corp., where he now holds 44.6 million shares in total, plus about $2 million in debt. He has had an outstanding, long-running tender offer for all remaining shares of the film studio. The studio, in turn, has sued Mr. Icahn.
Mr. Icahn has also been increasing his stake in Motorola Inc., which he disclosed earlier this month was at 265.6 million shares. The stake is growing ahead of a split of Motorola’s business, which Mr. Icahn has said he expects to improve the shares’ value.
Last week, Mr. Icahn also revealed he had increased his holdings in Hain Celestial Group Inc., which currently sits at 6.39 million shares. An increased stake in Mentor Graphics Corp. had also already been reported by Mr. Icahn.
Mr. Icahn reported little to no change to his holdings in biotechnology stocks, including a steady stake in Amylin Pharmaceuticals Inc., a drug maker that saw shares tumble 35% in the aftermath of a setback in its diabetes treatment.
His holdings in Genzyme Corp. remained at 13.1 million shares as the drug maker finds itself in a fight with French pharmaceutical giant Sanofi-Aventis SA, which is now pushing a hostile takeover attempt. Mr. Icahn has two representatives on Genzyme’s board.
—David Benoit
Bill Ackman
Activist investor Bill Ackman’s Pershing Square Capital Management has exited restaurant-chain owner Yum Brands Inc. for the quarter ended Sept. 30, according to regulatory filings. Yum owns KFC, Pizza Hut and Taco Bell.
In the SEC filing, Mr. Ackman also disclosed reduced stakes in both Kraft Foods Inc. and Target Corp. n the third quarter.
Last month, Mr. Ackman, an activist investor who often takes large stakes in the handful of companies in which he invests, disclosed a 16.5% stake in J.C. Penney Co. and said it is teaming up activist efforts with Vornado Realty Trust. The fund manager, now the department store’s largest shareholder, said J.C. Penney’s real-estate portfolio is better than its competition and that it has “untapped potential” as it hasn’t fired any staff during the crisis.
He has also disclosed an 11% stake in Fortune Brands Inc., as he felt shares are undervalued.
—Amy Or
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