Top Q2 Buys of Acadian Asset Management

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 |  Includes: DISH, NOC, PM, SKM, T, TSU, VALE
by: Rash Menaria
Acadian Asset Management LLC is an investment advisory firm catering to investment companies, pension and profit sharing plans, charitable organizations, corporations and government entities. It manages more than $49 billion in assets and covers both U.S. and foreign investments. The firm utilizes a team approach, screening a universe of companies across a global network on a daily basis and seeking those that are undervalued and exhibiting positive earnings trends and potential.
The following is a list of its top seven buys by market value in the last quarter, as released in the firm's most recent 13F filing with the SEC.
Stock
Symbol
Change Bought Last Quarter
Shares Held - 06/30/2011
Vale S.A.
8769714
20489488
DIRECTV
4434014
4464702
Philip Morris International, Inc.
3254256
3510823
Tim Participacoes S.A.
3003372
3244221
Northrop Grumman Corporation
2002849
2409725
SK Telecom Co. Ltd.
4773561
4831487
Dish Network Corporation
2674112
3209693
Click to enlarge
I mentioned in a recent article that Vale and Philip Morris appear to be good buys. Vale S.A. is trading at 6.4x Dec’11 EPS and most of the analysts have buy ratings on the stock with a median price target of $42.5 vs the current price of 33.52. Almost all negatives are priced into the stock at these levels and going forward an increase in dividends as well as the successful completion of the Moatize coal project can be the positive catalysts. Philip Morris also looks attractive given its strong earnings momentum as well as attractive dividend yield of 3.5%.
In addition to Vale and Philip Morris, Direct TV also appears to be an excellent buy. Direct TV is trading at 12.2x next year consensus EPS. This appears cheap given its 28% EPS growth rate (consensus estimates). DTV continues to have significant financial flexibility, which is driving superior capital returns. It also provides exposure to fast-growing Latin American Pay TV market and has incremental revenue opportunities in the US in the form of commercial, improved VOD and local advertising. The stock is in a continuous uptrend and is near its all-time high. I still believe it’s reasonably priced and can see more upside going forward.
For other stocks, here are some of the basics about their businesses and sell side consensus target price for their stocks:
TIM Participacoes S.A. is a Brazil-based company. The Company uses the global system for mobile communication (GSM) to provide mobile telecommunications services throughout Brazil. The services provided by the Company include short message services or text messaging, multimedia messaging services, push-mail, BlackBerry service, video call, turbo mail, wireless application protocol downloads, Web browsing, business data solutions, songs, games, television access, voice mail, conference calling, chats, and other content and services. It has a median sell-side price target of $48.50 compared with the current market price of $49.45.
Northrop Grumman Corporation is an integrated enterprise consisting of businesses that cover the entire security spectrum, from undersea to outer space and into cyberspace. The Company operates in four segments: Aerospace Systems, Electronic Systems, Information Systems and Technical Services. It has a median sell-side price target of $70 compared with the current market price of $65.12.
SK Telecom Co., Ltd. is a Korea-based wireless telecommunications services provider. SK Telecom's services are provided under five categories: wireless Internet services, game portal services, multimedia services, international roaming services and video telephony services. It has a median sell-side price target of $18.90 compared with the current market price of $15.88.
DISH Network Corporation is a pay-television provider. The Company’s products include Programming, Receiver Systems, DISHOnline.com, DISH Remote Access and Google (NASDAQ:GOOG) TV. The principal digital broadcast operations facilities it uses are EchoStar’s facilities located in Cheyenne, Wyoming, and Gilbert, Arizona. It has a median sell-side price target of $33 compared with the current market price of $31.69.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.