Over the past days hedge funds have been filing their form 13-F, which is a quarterly report of equity holdings filed by institutional investment managers with at least $100 million in equity assets under management, as required by the United States Securities and Exchange Commission (SEC). In this article, let´s concentrate in one particular hedge fund and try to see the principal holdings in its portfolio. I will look into Blackhill Capital Inc., a financial investment advisory firm headquartered in Morristown, N.J.
Recently the fund reported its equity portfolio, as at the end of last year. The total value of the portfolio amounted to $657.0 million, up from $621.2 million disclosed at the end of the previous quarter. Consequently, the fund's total return was 5.75% in the last quarter. The filing revealed that at the end of last year, the fund added 38 new positions to its equity portfolio, and sold out of two other companies. The top 10 portfolio holdings as of the end of the quarter represented 69.67%.The largest changes from previous 13-F fillings are in the health care sector (1%) followed by industrials and technological stocks (around 0.2% each).
In this article, we have selected three companies, in which the fund holds the largest stakes, in terms of market value.
The first on the list is Pfizer Inc. (PFE), in which Blackhill disclosed a $23.6 million stake with over 772,140 shares. Pfizer is a biopharmaceutical company which sells health care products worldwide. It operates in a highly competitive industry with Merck & Co. Inc. (MRK), Novartis AG (NVS) and Sanofi (SNY). It has reported fourth quarter EPS and revenues above the Zacks Consensus Estimate. It has a proven commitment to returning cash to investors, with a current dividend yield of 3% which is considered quite good to protect investors' purchasing power. The company returned about $15 billion to shareholders (dividends and share buybacks) in 2012.
Other hedge fund gurus have also been active in the company. Jim Simons (Trades, Portfolio) has bought in it in fourth quarter 2013.
The Walt Disney Company (DIS) comes in next, the fund owning over 250,860 shares, worth $19.1 million. The company reported earnings per share increased by 33.8% in the most recent quarter compared to the same quarter a year ago. As we can see in the next chart, the bank has demonstrated a pattern of positive EPS growth over the last years.
We have to mention, that the net income growth from the same quarter one year ago has outperformed compared to the Media industry average.
In Johnson & Johnson (JNJ) Blackhill disclosed ownership of over 206,560 shares, worth $18.9 million. The company reported earnings per share increased by 32.5% compared to the same quarter one year prior, and has demonstrated a pattern of positive earnings per share growth over the past two years. The company returns cash to investors: Its current dividend yield is 2.83%, which is considered quite enough to protect the purchasing power.
Final Comment
The stocks still have good upside potential despite the fact that they have already risen in the past year. The three stocks are certainly attractive for fundamental investors and make it a worthy investment for Blackhill's portfolio. In future articles we are going to calculate the intrinsic value of these stocks to determine if they are a good buy in terms of valuation.
Disclosure: Vanina Egea holds no position in any stocks mentioned.
About the author:Vanina EgeaA fundamental analyst at Lone Tree Analytics
Visit Vanina Egea's Website
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PFE STOCK PRICE CHART
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