By Eric Winter
As one of the youngest billionaire managers on Wall Street, Chase Coleman of Tiger Global Management Llc has had the benefit and seeding of Julian Robertson, one of the most legendary managers in hedge fund history. In 2007, a year that proved to be notably positive for traders and managers, the tiger cub was able to provide a 71% return on assets under management, and he nearly repeated that feat in the first nine months of 2010 by returning 64%. We've compiled a list of some of Coleman's highest dividend-paying stocks; continue reading to see how they size up. We should note that Tiger Global isn't an income investor and they bought these stocks because they are probably expecting significant capital gains.
R.R. Donnelley & Sons (RRD) tops Coleman's list, with a high-achieving double-digit yield, 11.3% to be exact. The integrated communications provider operates primarily in the commercial printing industry, serving more than 60,000 customers worldwide in a highly-competitive business. RRD achieves such a high yield by paying out $0.26 per quarter despite the sub-$10 price per share. Even with consistent earnings beats for the past four announcements, RRD stumbled through most of 2012, ending the year down over 23%. Coleman's $37mm position is beat only by Elm Ridge Capital's $42mm size (according to the funds we track). (Check out Elm Ridge's other heavy stock picks here.)
Mail solution provider Pitney Bowes Inc. (PBI) stands out as another big dividend play for Tiger, providing the fund with a 10.9% yield and an annual payout rate of 1.50. However, the high yield most likely did not make up for the poor performance of PBI in 2012, amounting to an even larger depreciation in price than RRD, a roughly 31% drop. However, 2013 has been quite the reprieve for PBI, as the stock has returned 25% from its depressed prices at the end of last year. Analysts think the stock has another $2 to go from its current price of $13.41, so keep an eye out for both a growth and income play here. David Harding of Winton Capital Management upped his position in PBI in his last 13F filing (see what other dividend picks this billionaire holds here.)
Firearms manufacture Sturm, Ruger & Company, Inc. (RGR) was another diversified play of Coleman's, netting him a dividend yield of 3.00%. RGR participated in the "Great Special Dividend Giveaway of 2012", joining a number of companies who spun off extra cash in giant dividends to avoid the income tax implications of the pending fiscal cliff. This meant that RGR shareholders as of December 5th, 2012, made out with a $4.50 dividend per share, up quite a bit from their typical dividend of roughly $0.35. Tack that onto the 20% price jump in RGR over the last year and you end up with some very satisfied shareholders and fund managers.
Supermarket chain Roundy's (RNDY) managed to grab some of Tiger's capital as well, amounting to just over $5mm. They operate around 160 grocery stores, primarily in the Midwest, and have been in business for more than 130 years. Their impressive dividend yield of 8.1% was once again attributed to a low share price versus payout ratio, which may turn off some investors who want to avoid stocks that don't break the $10 price mark. Quant fund Two Sigma Advisors has a small position as well, with "small" being the operative word (only $370,000 invested).
Finally, biopharmaceutical company Questcor Pharmaceuticals, Inc. (QCOR) finishes out our list of Coleman's top dividend plays. The stock promises a yield of 3.00%, but that is peanuts compared to the drop QCOR experienced in the past twelve months, amounting to over 30% of price per share lost. They recently acquired BioVectra, which manufactures the primary ingredient for their H.P. Acthar Gel. The acquisition should enable QCOR to understand BioVectra's trade secrets and improve production costs. Bernard Horn of Polaris Capital Management may see some opportunity with the purchase, as he bumped up his position by 50% according to his last 13F.