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UBS O'Connor, L.L.C. is a key strategic alternative investment provider within the A&Q platform of UBS Global Asset Management. O'Connor manages more than $7.1 billion in nontraditional strategies through its Credit Strategies, Equity Strategies, Currency and Rates and Convertible Securities programs. Its offers multiple strategies involving long/short market neutral, long/short equities, convertible arbitrage, merger and acquisition trading, quantitative, credit, currency and rates as well as opportunistic strategies.

The following is a list of top stocks (by market value) that UBS O'Connor, L.L.C. bought in the last quarter, as released in its most recent 13F filing with the SEC.

Stock

Shares,
03/31/2011

Shares,
06/30/2011

Danaher Corp. (NYSE:DHR)

724,263
2,229,983

Emerson Electric Co. (NYSE:EMR)

140,000
1,486,550

Tyco International Ltd. (NYSE:TYC)

0
1,059,876

Hubbell Inc. (NYSE:HUB.B)

0
501,338

Newell Rubbermaid Inc. (NYSE:NWL)

2,161,015
4,188,113

Cameron International Corporation (NYSE:CAM)

0
570,624

Prologis (NYSE:PLD)

129,800
929,061

My favorite among the above stocks is Tyco International (TYC). Tyco International Ltd. is a diversified company that provides security products and services, fire protection and detection products and services, valves and controls, and other industrial products. It operates in five segments: ADT Worldwide, Flow Control, Fire Protection Services, Electrical and Metal Products, and Safety Products. Tyco International is relatively a more defensive company vs. industrial peers, due to its rich mix of stable, recurring revenues. Over 45% of Tyco’s sales are tied to recurring revenues and services that are highly predictable (e.g., ADT security monitoring) and relatively insulated from changes in economic growth rates, making it a good bet in current uncertain times.

I won’t be buying Hubbell (HUB.B) or Emerson (EMR), even though they are considered late cyclical industrial companies, as I believe we are entering another slowdown, not just later phases of recovery. Danaher (DHR) is a mid-cycle industrial company. One of the possible reasons the fund might have bought Danaher is the anticipated positive contribution from its Beckman acquisition that is likely to have positive impact on its earnings in the near future (2H11, 2012). However, I would even avoid this one until more clarity on the macroeconomic environment emerges.

Cameron International (CAM) may prove to be a good buy if commodity prices (oil, in particular) remain inflated. Cameron International Corporation provides flow equipment products, systems and services to global oil, gas and process industries. The company operates in three segments: Drilling & Production Systems, Process & Compression Systems and Valves & Measurement. The company reported strong results and order inflow last quarter.

Source: UBS O'Connor's Top Fund Buys