By Alex Oleinic
Form 13F is a filing with the Securities and Exchange Commission in which hedge funds and other institutional investors disclose their holdings as at the end of a calendar quarter. Generally, 13Fs are filed several weeks after the end of a quarter. One of the funds we track is Robert B. Gillam's McKinley Capital Management and it have recently filed its 13F with the SEC, disclosing its positions as at the end of March. We have picked top five holdings in terms of stake value.
Why do we pay attention?
It's important to track hedge fund sentiment, because on the whole, their best picks have been shown to outperform the market by as much as 18 percentage points a year. Best of all, retail investors can capitalize on this phenomenon, but they have to know where to look first (learn the secrets of this strategy here).
The top two
First on the list is Visa (V), in which Mr. Gillam's fund disclosed a $49.9 million position. The value of the stake in Visa reported at the end of last year was $52.4 million. The fund currently owns 293,868 shares of Visa, down from 345,973 shares reported at the end of December. The stock of Visa is trading at a forward P/E of 20.6x. Visa is one of the most loved companies in the hedge fund industry, as more than 70 hedge funds from our database were long heading into 2013. Warren Buffett is also among V shareholders (see Buffett's top picks).
Next on the list is Biogen Idec (BIIB), in which McKinley Capital owns 254,807 shares, worth $49.1 million. In the previous 13F, the fund reported a $35.6 million stake, which included 243,354 shares. For the first three months of 2013, the total revenue of Biogen Idec increased by an annual 10% to $1.4 billion, while the non-GAAP diluted EPS rose by 41% on the year to $1.97 per share. Shares have a year-to-date return of 45.6%.
The best of the rest
Gilead Sciences (GILD) is another holding in the equity portfolio of McKinley Capital. The fund disclosed owning 943,591 shares, the value of the stake being $46.2 million. This is a new position in the 13F portfolio of McKinley Capital. In the biotechnology industry, Gilead has the highest market cap, which is worth $80.45 billion. According to our database, 50 funds were bullish on Gilead in the previous round of 13F filings.
Also we should mention eBay (EBAY), represented by a $45.7 million stake in the 13F of McKinley. The fund surged the holding to 842,858 shares, after reporting 12,497 shares in the previous filing. The previous value of the holding was $637,000. eBay is one of the most popular companies, so to say, among the hedgies, as more than 80 hedge funds from our database were invested at the end of December. Shares sport a forward P/E of 17.2x and have a year-to-date return of more than 9%.
Oracle Corporation (ORCL) is the fifth most valuable holding in the 13F portfolio of McKinley Capital. The stake surged to 1,377,767 shares in the first quarter, from 181,072 shares reported at the end of last year. The value of the position also jumped to $44.5 million, from $6.0 million. More than 60 of the hedge funds we track held shares of Oracle at the end of 2012. Among the companies from the technology sector, Oracle has the seventh-largest market cap, which amounts to $158.75 billion. The stock has a year-to-date return of above 2%.
A total of 320 holdings are in the latest first-quarter 13F filed by McKinley Capital, up from 309 at the end of 2012. Robert B. Gillam has made some interesting moves during the first three months of 2013, especially to the holdings in big companies, which rule the sectors of the businesses in it is involved. McKinley Capital has an impressive equity portfolio worth about $2.2 billion, up from the previous value of some $1.9 billion, and that's why it is important to track its activity moving forward.