Joel Greenblatt, famous writer and fund manager started Gotham Capital in 1985 with "$7 million, most of which was provided by junk-bond king Michael Milken." Since then, Gotham has accumulated stocks in over 700 different companies amounting to holdings of over $1.7 billion as of year end 2012. In the final quarter of 2012 his largest new positions were as follows:
Greenblatt's largest new investment was in Wells Fargo Company (WFC). As you can see below, this seems to have been a solid buy as Wells Fargo is up 8% so far YTD. WFC is a $193 billion company with a solid profit margin of 22.5%, from which it pays a 2.73% dividend. I really believe its time for Wells Fargo to break away from the other large banks, for more on that, I have written another article that you can find here. In addition to the common shares, Gotham also picked up some call options and warrants.
Coming in second was a $4.6 million investment in Computer Sciences Corp. (CSC). As shown below, this too seems to have been a great play as CSC is up over 24% YTD. Computer Sciences is a $7.67 billion company that had sales of $15.55 billion last year. It currently pays a 1.60% dividend.
In what appears to be another perfectly timed investment, Hillshire Brands (HSH), Greenblatt's third largest new stock has also moved up since the beginning of 2013. Up 19.09% YTD, Hillshire Brands is a $4 billion company that pays a 1.5% dividend and has a really low P/E of 5.66. This investment was valued at $4.4 million at the end of 2012 and represented 0.26% of the fund's holdings.
Last on the list is Gotham's $4.2 million stake in Cubist Pharmaceuticals (CBST). Cubist is a $3 billion company that currently trades at $46.96 per share with a P/E of 22.67. It pays no dividend and has moved up 12% YTD (Seeing a trend here?). Its share of the $1.7 billion portfolio built by Greenblatt is 0.25%.