By Eric Winter
First Eagle Investment Management has a heritage linking it back to the 1800s, carrying on the legacy of a German firm then known as S. Bleichroder. Today, famed French investor Jean-Marie Eveillard acts as Senior Vice President of FEIM and Senior Investment Advisor to First Eagle Funds. The fund is mandated by the SEC to release its holdings every quarter, giving investors insight into the firm's equity, option, and certain debt positions. We have used such information to come up with a strategy that has netted over 38% since its inception last September (read more here). Let's take a closer look at First Eagle's top stock positions for the first quarter of 2013 based on its latest 13F filing.
Comcast (CMCSK) stands out as the largest disclosed holding, moving up from the second position a quarter before. First Eagle's share size grew by 11,600 from Q4 2012 to Q1 2013 (which amounts to almost no movement given the 23.8mm shares owned), but the position's market value increased by more than 10% in that time period. The global media conglomerate is up 12.7% year to date, supporting that increase. CMCSK reported first-quarter earnings on May 1, showing a 17% bump up in profit, bolstered by an increase in voice and high-speed Internet subscribers. Billionaire Mario Gabelli of GAMCO Investors owns over 900,000 shares (take a look at his other positions here).
Cisco Systems (CSCO) was displaced by CMCSK as the fund's largest holding by market value, even despite tacking on 4mm shares from Q4 2012 to this past quarter. This is largely in part due to the stock's weaker performance in the same time period (CSCO is up just 6% year to date). The stock has had a hard time gaining upward traction as it mirrors negative movement made by other enterprise IT names that have been reporting weak earnings as of late (think IBM, Juniper). First Eagle holds 42mm shares; billionaire Ken Fisher of Fisher Asset Management keeps about 33mm in his portfolio (check out his other holdings here).
Sysco Corp. (SYY) keeps its spot relative to last quarter; the fund increased its shares a marginal amount to make an aggregate position size of 24.3mm shares. Fiscal third-quarter earnings delivered on May 6, outlined a miss on both the revenue and earnings fronts, with the bad news attributed to economic and weather conditions that kept consumers from eating out. The stock has fallen out of favor with analyst this year, with Cantor Fitzgerald and Morgan Stanley handing out Sell and Underweight ratings, respectively. In addition to call and put positions, billionaire Ken Griffin of Citadel Investment Group owns over 276,000 shares.
Microsoft (MSFT) moves up a spot from its position in Q4 2012, once again with just a slight bump in share size but an 8.5% increase in market value. The stock has rocketed since this April, giving MSFT a year to date gain of over 25% (with much of that upward movement happening since the end of March). An EPS beat on its FQ3 earnings announcement on the 18th of last month has certainly acted as a catalyst, even though revenue came in slightly less than expected. ValueAct Capital recently disclosed a $2bn stake in the company. Billionaire David Einhorn of Greenlight Capital has nearly 11mm shares of MSFT in his portfolio.
Grupo Televisa S.A. (TV) assumes the last spot on our list, falling from fourth in Q4 2012 to fifth in Q1 2013. First Eagle dropped its holdings by 400,000 shares from 28.4mm shares to 28mm even, and market value actually fell slightly, as the Mexico-based television broadcasting company has trudged through this year, giving back 4.4%. The company, along with Carlos Slim's American Movil (AMX), has been under heat lately with the passing of a telecom reform bill that has created an independent regulator to monitor the company, impose stiffer penalties (if needed), and possibly force it to sell assets. Billionaire Louis Bacon of Moore Global Investments claims ownership of 140,000 shares according to his 13F.