By Siraj Sarwar
Ziegler Capital Management, LLC is an asset management company with a flourishing history of providing investment solutions for individual and institutional investors. Ziegler's investment strategy produces consistent, risk-adjusted and relatively predictable returns through several market cycles. In the last quarter, Ziegler Capital Management initiated positions in 32 stocks, made additional purchases of 27 stocks and sold out 102 stocks. Its portfolio is heavy on technology (32%), services (11.6%), Healthcare (13.6%) and financial stocks (13.9%). Here, I examine the major buys favored by Ziegler Capital Management. These are Arch Capital Group (ACGL), Goldman Sachs Group (GS), Target (TGT), Corning (GLW), and Mondelez International (MDLZ).
% of portfolio
Previous % of Portfolio
% of Change
Goldman Sachs Group is a global securities and investment management and investment banking firm. Ziegler Capital Management owns 34,794 shares of Goldman Sachs at present. Goldman Sachs consistently appears in the Ziegler's portfolio. Recently, the fund manager increased its stake in Goldman by nearly 12%.
After falling to $88, the stock returned significantly and bounced back to $151 at the time of writing. The company shares gained nearly 29.50% in the last year alone. Moreover, the company is currently offering a solid dividend of $0.50 per share. Goldman Sachs is well-known for being one of the savviest business dealers on Wall Street.
Recent financial crises created cancers on the firm's business model. However, it changed its business model into one of the largest bank holding companies. With the change in business model, the company now offers more moderate risk and above-average returns.
Arch Capital Group is engaged in insurance and reinsurance on a worldwide basis. Ziegler increased its stake in Arch by 132%. At present, Ziegler Capital owns 35,970 shares, which form 0.18% of its portfolio.
Over the years, Arch Capital has sought to increase shareholder value. The company works on three main strategic principles. It selectively chases diverse specialty markets where it can apply its expertise and knowledge. Moreover, it seeks to maintain flexibility and receptiveness which permit it to take advantage of market opportunities. Furthermore, it maintains a disciplined underwriting approach to risks and prices them correctly in all phases of the insurance cycle.
With these strategic principles, it has been able to generate massive profits over the years. As shown in the above chart, the stock is consistently on a surge and nearly gained nearly 33.03% in the last year alone. Furthermore, the company's price has appreciated by nearly 111% over the past five years.
Target, another company in Ziegler's list, was incorporated in Minnesota in 1902. It operates in three segments: U.S. Retail, U.S. Credit Card and Canadian. The company has shown strong revenue growth over the years. Since 2010, it has been able to increase its revenue by $4 million. At the end of 2012, the company's revenue stood at $6.98 billion. In addition, Target has high margins relative to the industry.
The company has had solid cash flows over the years. Target has been consistently increasing operating cash flows at a steady rate. At the end of 2012, the company's operating cash flow stood at $5.4 billion. It has been able to increase operating cash flows by nearly $2 billion over the past year. However, the company has experienced a decline in free cash flows at a time when the company is making immense capital expenditures. At the end of 2012, Target's capital expenditure stood at $4 billion, an increase of 2 billion over the previous year.
Target has a strong revenue base and strong financial position at present. Moreover, the company has been consistently increasing dividends over the years. With these strong prospects, Ziegler increased its portfolio from 0.42% to 0.75%. At present, Ziegler holds 0.11 million shares of Target Corporation.
Corning is a provider of high-performance glass for computer monitors, LCD televisions, and other information display applications. Corning is one of the favorite stocks of Ziegler managers. At present, the fund manager owns 0.136 million shares of Corning. This represents an increase of 26% over the previous quarter.
Over the years, Corning has displayed strong results. In addition, the company is steadily diversifying its revenue base and earnings. At the end of Q4, Corning revenue stood at $2.15 billion, an increase of 12% over the previous quarter. Since 2010, the company has been able to increase earnings per share by $0.19. Moreover, it was able to increase net income by 14% over the previous quarter.
This can be a beneficial inclusion in Ziegler's portfolio, as the company set a record for annual sales performance and raised its dividend by 20%. Additionally, it advanced a number of new technological innovations. With new technologies, it is well positioned to enter into new markets.
Mondelez International, Inc. manufactures confectionery products. The company produces packaged food products, including confectionery, biscuits, beverages, convenience meals, cheese and various packaged grocery products. At the end of Q4, Ziegler initiated a position in Mondelez by purchasing 83,546 shares. This is the first appearance of Mondelez in the fund manager's portfolio. At present, the company constitutes 0.25% of the portfolio.
Mondelez has been showing exceptional growth over the years. The company's stock has been consistently on a surge over the previous three years. The company's price has appreciated by nearly 47% over the previous three years. In addition, the company currently offers a quarterly dividend of $0.13, yielding at 3.69%.
The company has a solid financial position at present to back its dividends and price. Recently it announced Q4 results with massive revenue of $9.5 billion. The company has shown exceptional growth in organic net revenues. Moreover, it has low debt and high return on equity of 0.5 and 9.0 respectively.
At the end of Q4, Ziegler initiated a position in Mondelez by purchasing 83,546 shares. This is the first appearance of Mondelez in the fund manager's portfolio. At present, the company constitutes 0.25% of the portfolio.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.