By Eric Winter
Worth roughly $1.8bn, Ken Fisher finds himself on the list of America's 400 richest people, perched at 271 according to Forbes magazine's calculations. Fisher has also been writing for the publication for 26 years, but even that tenure is shorter than the life of his fund, Fisher Asset Management, started in 1979. Fisher recently disclosed his holdings for Q4 2012 in his latest 13F filing, showing the fund's market value north of $35bn. We track investors like Fisher as we've discovered many of these billionaire's small-cap picks handily beat the market, a phenomenon we have dug deep into and pulled an impressive strategy out of (learn more here). Let's take a look at Fisher's top five newest investments in the fourth quarter of last year.
Education Realty Trust, Inc. (EDR) acts as Fisher's largest new investment, even though his commitment was a paltry 0.1% of the fund's assets under management. EDR is a REIT, specifically one that specializes in collegiate housing. True to many other REITS, EDR pays a hefty dividend, offering investors a yield of 3.7%. The stock inched out a gain looking back twelve months, but it was still more than six percentage points under the S&P 500's overall return of 11.6%. EDR reported earnings on the 19th. Its FFO was in line with analysts' expectations and its revenue beat the expectations. Billionaire Steven Cohen of SAC Capital Advisors has roughly $14mm invested (see his top holdings here).
Second on the list is another REIT, Mack-Cali Realty Corporation (CLI). Instead of investing in university housing, CLI is more geared towards office and flex properties. The company had earnings beat after earnings beat last year. Its latest announcement on the seventh of this month was no different, with a surprise amounting to almost 5% over what analysts expected. CLI offers a gigantic dividend yield of 6.6% and has a modest forward price-to-earnings ratio of 11 (substantially lower than trailing measurements). Ken Griffin recently propped up his share amount, reaching 95,700.
Harris Teeter Supermarkets, Inc. (HTSI) managed to grab a mere 0.08% of Fisher Asset Management's funds. The regional supermarket chain has about 208 stores in operation, predominantly in the Eastern and Southern U.S. Agree Realty Corporation, another REIT, recently made a $3mm purchase from HTSI. Agree has been purchasing assets from the likes of Applebee's and LA Fitness, and the HTSI holding is a modest addition to their growing portfolio. The stock returned a loss looking back a year, but positive growth in earnings and revenue year over year show some hope for the future.
Beauty products and cosmetics manufacturer Elizabeth Arden (RDEN) made its way into Fisher's portfolio as well, with a slightly smaller investment than HTSI received. RDEN has been viewed favorably by Wall Street so far this year, earning upgrades from the likes of CJS Securities and RBC Capital. They join other analysts to infer a mean price target one year out of $45.43; if they're correct, RDEN could gain over 18% this year to meet their calculations. The company had a slight slip by missing earnings marginally in its fourth quarter announcement, but we have a moderately bullish outlook on the stock and will keep our eyes on it. Billionaire Israel Englander is bullish as well, holding almost 55,000 shares of RDEN.
The last new addition we'll cover is Capital Federal Financial (CFFN). CFFN is a bank holding company that primarily serves the needs of retail clients, offering general services such as savings accounts, checking accounts, consumer loans, etc. Despite the small market cap, CFFN pays a fair dividend of 2.5%. Coverage on CFFN is limited, hinting that Fisher's team has done their own heavy lifting in terms of due diligence. Assuming he has higher valuations in mind like a handful of analysts do, CFFN could be a fair winner for 2013. Billionaire Jim Simons has his fingers in this pie as well, to the tune of $31mm.