Top New Buys and Sells of Eric Mindich of Eton Park Capital

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 |  Includes: AIQUF, BAX, CIT, JPM, MRO, MS, NLSN, SNI, SNY, VIA, VRSK, YPF, ZBH
by: GuruFundPicks
New York-based multi-strategy hedge fund Eton Park Capital Management, LP, founded in November 2004 by former Goldman Sachs partner Eric Mindich, manages over $11.5 billion in equity assets, including $7 billion invested in U.S. equities. Prior to founding Eton Park, Mindich was a senior member of Goldman Sachs' principal strategies group, where at the age of 27 he became the youngest partner in the history of Goldman Sachs. With offices in New York and London, Eton Park invests mostly in long/short equity and convertible arbitrage strategies. It is different from many other hedge funds in that 30% of its assets can be invested in private investments. Furthermore, unlike most hedge funds where investors can withdraw their money at quarterly intervals, investors in Eton Park have their capital committed for between three to five years.
The fund holds a moderately diversified portfolio of 69 equity positions, about 60% of that in large-caps, 30-35% in mid-caps and the remaining 5-10% in small-caps. Its portfolio turnover is 120%, implying an average holding period of ten months to a year. Based on the most recent SEC 13-F filing for the March 2011 quarter, we determined that its portfolio is over-weight services, financial and basic materials sectors, and it is under-weight consumer, technology and energy sectors.
Within sectors, at a more disaggregated level, our prior analysis of their SEC 13-F filings for the December 2010 quarter had revealed that it was over-weighted in the money center and foreign bank group, the medical equipment group, and the integrated oil and gas group. Based on a review of the most recent SEC 13-F filing for the March 2011 quarter, we determined that it's no longer over-weight the medical equipment group as it sold large positions in Baxter International Inc. (NYSE:BAX) and Zimmer Holdings Inc. (ZMH) during the quarter. However, it significantly added to its positions in the integrated oil and gas group, buying another $335 million worth during the quarter in Marathon Oil Corp (NYSE:MRO) and YPF Sociedad Anonima (NYSE:YPF). Furthermore, it continues to maintain an over-weight position in the money center and foreign bank group.
The following summarizes its new picks and pans in the latest reported 13-F filing for the March 2011 quarter, and updated based on any 13-G filings since the end of the quarter:
  • Nielsen Holdings NV (NYSE:NLSN) offers media and marketing information, analytics and industry expertise with a focus on what consumers watch and buy. This is a huge new conviction buy at $328 million.
  • Marathon Oil Corp. is engaged in the exploration, production, refining, transportation and marketing of oil and natural gas worldwide. This too is a large conviction buy at $180 million.
  • Scripps Networks Interactive CLA (NYSE:SNI) operates five national media networks and related Internet businesses and offers comparison shopping services. This position was initiated in early 2009 in the low-$20s, so the selling out of that large $155 million in the $50s at a 100%+ profit in two years is probably just profit-taking.
  • Verisk Analytics CLA (NASDAQ:VRSK) provides proprietary actuarial and underwriting data related to U.S. property and casualty insurance risks. This position was initiated in October 2009 in the mid-$20s, so the selling of $147 million out of a $245 million position from the prior quarter in the mid-$30s fifteen months later at a 50% gain is probably just profit taking.
  • CIT Group Inc. (NYSE:CIT) is a global provider of commercial and consumer financing and leasing capital to small, mid-size and larger companies. This position was initiated at the end of 2009 in the low-$30s, so the selling off of most of this position in the mid-$40s at a 35%+ gain in 15 months is (probably) just profit taking.
  • Airgas Inc. (ARG) distributes industrial, medical and specialty gases and welding, safety and other related products. This position was initiated in early 2010 in the mid-$50s and is still among its largest high conviction holds and a 5%+ ownership in the company, even after the $124 million sell this quarter.
  • Viacom Inc. CLA (NYSE:VIA) is a holding company engaged in cable TV, filmed entertainment production and distribution, and music publishing. This at $700 million is its largest position, and it added to this position during the quarter.
  • YPF Sociedad Anonima is an Argentine company engaged in domestic upstream and downstream operations for crude oil, natural gas and petrochemicals. This at $435 million is its second-largest position and it added to this position during the quarter, so it is a high conviction holding.
  • Morgan Stanley (NYSE:MS) provides financial products/ services to corporations, governments, financial institutions and individuals worldwide. This position was initiated in early 2010 in the $30 range, and it's been wrong since as the stock has fallen off steeply since the buy.
  • JPMorgan Chase & Co. (NYSE:JPM) is a global financial company providing private, commercial and investment banking and treasury services in over 60 countries. The position was initiated at the end of 2009 in the mid-$40s, and at $388 million this is its largest position and a conviction hold.
Table
Company
Ticker
Action
Market Value at end of March 2011 Quarter
Change in Value from Prior Quarter
Percent of Portfolio
Percent Shares Owned
New Picks and Pans
Nielsen Holdings N V
NLSN
New
$ 328 million
$328 million
4.65%
3.35%
Marathon Oil Corp.
MRO
New
$ 180 million
$180 million
2.55%
0.47%
Scripps Networks Inc.
SNI
Drop
$ 0 million
($155) million
0.00%
0.00%
Verisk Analytics Inc.
VRSK
Cut
$ 98 million
($147) million
1.39%
1.97%
CIT Group Inc.
CIT
Cut
$ 12 million
($129) million
0.17%
0.14%
Airgas Inc.
ARG
Cut
$ 275 million
($124) million
3.91%
5.19%
Top Holdings
Viacom Inc.
VIA
Add
$ 700 million
$49 million
9.93%
2.81%
YPF Sociedad Anonoima
YPF
Add
$ 435 million
$111 million
6.18%
2.49%
Morgan Stanley
MS
Same
$ 410 million
$0 million
5.81%
0.97%
JPMorgan Chase & Co.
JPM
Same
$ 388 million
$0 million
5.50%
0.21%
Click to enlarge
Credit: Historical fundamentals including operating metrics and stock ownership information were derived using SEC filings data, I-Metrix® by Edgar Online®, Zacks Investment Research, Thomson Reuters and Briefing.com. The information and data is believed to be accurate, but no guarantees or representations are made.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.