Bookmark and Share
Showing posts with label BEAM. Show all posts
Showing posts with label BEAM. Show all posts

Is An ‘Activist Mutual Fund’ A Smart Investment?

The following article was written by our guest author Insider Monkey. At Insider Monkey, we use a number of techniques to track investment activity of hedge funds and other notable investors. Our research has shown that the most popular small cap stocks among hedge funds, as determined by quarterly 13F filings, earn an average excess return of 18 percentage points per year (discover the details of our small-cap strategy). Last summer, we put this theory into practice by publishing a portfolio of the most popular small caps and since inception this portfolio has beaten the S&P 500 by 29 percentage points.

The activist

Investors can also receive more up-to-date information about what hedge fund managers are doing through 13D and 13G filings. 13Ds are also known as activist filings—when a hedge fund such as billionaire Carl Icahn’s Icahn Capital or billionaire Bill Ackman’s Pershing Square files a 13D as opposed to a 13G, it usually signals that it intends to push management to make changes at the company either privately or publicly. While activist campaigns do not always work, often these managers are successful in getting a company to sell itself, spin out a non-core business unit, return more cash to shareholders, or take other actions that increase shareholder value.

They also may benefit from improvements in general market conditions that push up the stock price, as with any other hedge fund investment. The combination of these factors sometimes results in high average returns: Icahn, for example, tends to have done well with his 13D filings in the past couple of years.

Meet one 13D Activist Fund

Northern Lights Distributors, LLC has launched a long-only fund (the 13D Activist Fund) whose managers select stocks from the universe of activist positions. While the fund has a limited performance history, it has outperformed the S&P 500 year to date with a return of 26% compared to the index’s total return of 18%.

The 13D Activist Fund also notes that third-party academic research shows superior performance for activist targets and this is not entirely captured by a pop in the stock price immediately following the announcement. For example, “a further significant increase in share price” occurs after the filing date according to one study on the returns from activism.

To capitalize on this finding, the 13D Activist Fund specifically seeks to take positions in activist targets from a variety of managers, targeting “20 to 40” holdings. For purposes of comparison, Icahn’s most recent 13F only included a total of 19 positions, and some of these were in smaller-cap stocks (the 13D Activist Fund targets stocks with market capitalizations of at least $1 billion) or in companies where he was not making activist moves.

As a result, by construction its portfolio should incorporate ideas from several activists rather than mimicking any particular fund’s portfolio. The fund managers acknowledge that there is little fundamental analysis involved in their strategy; they prefer to defer on that point and analyze the activist investor’s record directly in determining the likelihood of positive returns.

To do this, they analyze both the overall track record of an activist as well as his success in a particular industry or sector; activists who have historically struggled in tech investments might be ignored if they file a 13D on a tech stock. They also evaluate the activist’s plans for creating change at the company. Different activist techniques might be judged more or less likely to succeed.

Recent data

Its most recent publicly disclosed data shows that the 13D Activist Fund’s three largest holdings were Jack in the Box Inc. (NASDAQ:JACK), where Blue Harbour Group has been engaged in an activist strategy for about three years; Valeant Pharmaceuticals Intl Inc (NYSE:VRX), one of the top holdings of Jeffrey Ubben’s ValueAct Capital, and Canadian Pacific Railway Limited (USA) (NYSE:CP), which has more than doubled in the last two years as Ackman has succeeded in transforming the railroad.

Motorola Solutions Inc (NYSE:MSI), another ValueAct holding, and Ackman favorite BEAM Inc (NYSE:BEAM) rounded out the fund’s top five picks. Looking at the rest of its top holdings, it appears that other activists the fund tracks include billionaire Paul Singer’s Elliott Management, Keith Meister’s Corvex Capital, and Richard McGuire’s Marcato Capital Management.

Final thoughts

Given the combination of the fund’s performance and the academic research supporting the concept of imitating activists, the basic concept involved seems to be a good one particularly for investors who are looking for assets with a low correlation to the overall market.

The question is which of the following would be the best way for an interested investor to participate: buy into the fund and pay its fees (likely the only way for most investors to access the entire portfolio of activist opportunities), watch for its public reports and directly buy some of the stocks the managers choose (which has a considerable delay), or follow 13Ds oneself and directly research these for attractive single-stock investments.


Disclosure: I own no shares of any stocks mentioned in this article.

Ex-Dividend Stocks: Best Dividend Paying Shares On August 12, 2013

The best yielding and biggest ex-dividend stocks researched by ”long-term-investments.blogspot.com”. Dividend Investors should have a quiet overview of stocks with upcoming ex dividend dates.

The ex dividend date is the final date on which the new stock buyer couldn’t receive the next dividend. If you like to receive the dividend, you need to buy the stock before the ex dividend date. I made a little screen of the best yielding stocks with a higher capitalization that have their ex date on the next trading day.

A full list of all stocks with payment dates can be found here: Ex-Dividend Stocks August 12, 2013. In total, 22 stocks go ex dividend - of which 11 yield more than 3 percent. The average yield amounts to 5.74%.

Here is the sheet of the best yielding, higher capitalized ex-dividend stocks:

Company
Ticker
Mcap
P/E
P/B
P/S
Yield
Sandridge Mississippian Trust II
774.72M
8.11
1.81
7.49
17.52%
SandRidge Mississippian Trust I
401.80M
5.04
1.58
4.71
17.00%
SandRidge Permian Trust
827.93M
6.57
1.72
6.06
14.84%
TECO Energy, Inc.
3.85B
16.88
1.67
1.31
4.92%
United Online, Inc.
776.04M
105.00
1.67
0.90
4.76%
Consolidated Edison Inc.
17.75B
16.97
1.49
1.44
4.06%
Regency Centers Corporation
4.65B
-
3.24
9.37
3.58%
Wisconsin Energy Corp.
9.94B
18.28
2.37
2.26
3.52%
Sandy Spring Bancorp Inc.
614.46M
14.06
1.27
4.21
2.60%
Valero Energy Corporation
20.11B
7.36
1.10
0.15
2.16%
Protective Life Corp.
3.44B
12.63
0.76
0.95
1.84%
Fresh Del Monte Produce Inc.
1.70B
14.03
0.93
0.49
1.70%
Micrel Inc.
599.60M
54.16
2.61
2.41
1.65%
Pool Corp.
2.50B
30.84
7.22
1.25
1.42%
Beam, Inc.
10.64B
24.55
2.27
4.24
1.36%
United States Steel Corp.
X
2.61B
-
0.75
0.14
1.11%
Home Bancshares, Inc.
1.53B
22.49
2.87
8.26
1.10%
Carriage Services Inc.
326.32M
28.11
2.32
1.55
0.56%

Bill Ackman’s Highest Yielding Dividend Stock Bets And His Complete Portfolio

Bill Ackman’s latest portfolio transactions and his biggest positions originally published at "long-term-investments.blogspot.com". Some of you might know Bill Ackman because of the phone battle against Carl Icahn on CNBC. He is an activist with around USD 10 billion in assets under management. In his management company “Pershing Square Capital” he has only 10 stock holdings.

As an activist, Ackman tries to increase pressure on the management of a company in order to implement own visions of the company’s future. Nearly half of his positions have voting rights over 10 percent.

His main investment focus is on defensive stocks from the consumer and industrial sector. Around 70 percent of his exposure is related to these two sectors.

Below is a small list of Bill Ackman’s latest Portfolio transactions. He is a lazy guy. Last quarter, he bought only one stock and he needed more than a year to complete his latest 20 transactions.

From his 20 latest transactions are 12 unique positions of which 10 pay dividends. Dividend payments are not in focus of Ackman’s investment strategy. Only one company yields above the 3 percent mark.

Ex-Dividend Stocks: Best Dividend Paying Shares On May 06, 2013

The best yielding and biggest ex-dividend stocks researched by ”long-term-investments.blogspot.com”. Dividend Investors should have a quiet overview of stocks with upcoming ex dividend dates.

The ex dividend date is the final date on which the new stock buyer couldn’t receive the next dividend. If you like to receive the dividend, you need to buy the stock before the ex dividend date. I made a little screen of the best yielding stocks with a higher capitalization that have their ex date on the next trading day.

A full list of all stocks with payment dates can be found here: Ex-Dividend Stocks May 06, 2013. In total, 39 stocks and preferred shares go ex dividend - of which 20 yield more than 3 percent. The average yield amounts to 3.98%.

Here is the sheet of the best yielding, higher capitalized ex-dividend stocks:

Company
Ticker
Mcap
P/E
P/B
P/S
Yield
Penn Virginia Resource Partners
2.41B
-
1.90
2.40
8.72%
Linn Energy, LLC
9.01B
-
2.03
5.08
7.56%
Atlas Pipeline Partners LP
2.74B
38.67
1.52
2.20
6.38%
Inergy Midstream LLC
2.19B
39.78
2.88
11.30
6.13%
Alliance Resource Partners LP
2.76B
12.20
3.90
1.36
5.93%
DCP Midstream Partners LP
3.55B
21.05
2.83
2.06
5.70%
American Realty Capital Prp.
2.50B
-
2.21
148.53
5.55%
Inergy, L.P.
2.90B
5.18
2.60
1.63
5.27%
Federated Investors, Inc.
2.32B
12.35
3.88
2.46
4.32%
Access Midstream Partners, L.P.
4.47B
36.89
1.94
7.35
4.28%
Magellan Midstream Partners LP
11.81B
27.14
7.78
6.66
3.84%
Sanofi
140.50B
21.67
1.88
3.00
3.20%
Southern Copper Corp.
27.91B
14.48
5.86
4.19
2.42%
Beam, Inc.
10.31B
26.03
2.23
4.18
1.40%
Cheesecake Factory
2.08B
20.86
3.52
1.13
1.22%
Waste Connections Inc.
4.61B
27.27
2.45
2.66
1.07%
UBS AG
67.98B
-
1.35
4.03
0.90%
Companhia Brasileira de Distribuicao
14.54B
27.54
3.39
0.57
0.33%