Mega Fund Managers' Buys And Sells In Consumer Durables

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 |  Includes: BBRY, BWA, EA, F, GM, GRMN, HOG, JCI, MAT, MSI, QCOM, TPX
by: GuruFundPicks

Mega fund managers, defined as managing between $100 billion and over a trillion dollars, are bearish on the consumer durable goods sector. During the June quarter, mega fund managers together sold a net $3.02 billion from their prior $143.47 billion position in the group, selling $14.23 billion and buying $11.21 billion worth of stocks in the group. Furthermore, overall they are underweight in the group by a factor of 0.67; that is, taken together, the 30+ mega funds have invested 2.8% of their assets in the group, significantly less than the 4.1% weighting of the group in the overall market.

A majority of the hedge fund and mutual fund managers included in the mega funds list manage well over $100 billion in U.S. equity assets, with some managing between $50 and $100 billion. The list includes prominent managers such as Wellington Management ($1.6 trillion in total assets under management), Vanguard Group ($1.4 trillion), Fidelity Investments ($640 billion), T Rowe Price ($330 billion), and Goldman Sachs Asset Management ($580 billion), among others. The following are the consumer durable goods companies that these mega fund managers are most bullish and bearish about (see table):

Mega Funds Bullish on General Motors Co. (NYSE:GM): Almost all (30#) mega funds have taken a position in GM, adding a net $1.15 billion to their $6.25 billion prior quarter position, including buying $1.95 billion and selling $800 million worth of stock. Major buyers of GM in the June quarter included JPMorgan Chase & Co. ($282 million), AllianceBernstein ($230 million), Vanguard Group ($226 million) and State Street Corp. ($209 million).

Mega Funds Bullish on Qualcomm Inc. (NASDAQ:QCOM): QCOM is a designer of CDMA-based, RF, and power management IC's for system software used in wireless handsets, modem cards, and networks. Twenty-nine mega funds hold $31.62 billion worth of QCOM or just over 40% of the outstanding shares, including a net cut of $19 million during the June quarter. Major holders of QCOM included Fidelity Investments ($3.46 billion), Vanguard Group ($3.24 billion), T. Rowe Price ($3.12 billion) and State Street Corp. ($3.12 billion).

Mega Funds Bearish on Ford Motor (NYSE:F): Twenty-nine mega funds hold $11.47 billion or just under 30% of the outstanding shares, including cutting a net $537 million during the June quarter. Major sellers included Fidelity Investments ($220 million), Wellington Capital Management ($178 million), Goldman Sachs Group ($147 million), Invesco Ltd. ($142 million) and Janus Capital Management ($117 million).

Mega Funds Bullish on Johnson Control Inc. (NYSE:JCI): JCI manufactures automotive interior systems and batteries for OEMs and control systems for non-residential buildings. Thirty mega funds hold $10.68 billion or just over 52% of the outstanding shares, including cutting a minor $261 million during the June quarter. Major holders of JCI included Capital World Investors ($1.41 billion), Capital Research Global Investors ($997 million), J P Morgan Chase & Co. ($924 million), Vanguard Group ($826 million), State Street Corp. ($765 million) and Wellington Capital Management ($693 million).

Mega Funds Bearish on Motorola Solutions Inc. (NYSE:MSI): MSI manufactures two-way radios, wireless network security products, and voice and data communications systems. Twenty-eight mega funds hold $4.78 billion or just over a third of the outstanding shares, including cutting $372 million during the latest June quarter. Major sellers included Dodge & Cox ($322 million), Franklin Street Advisors ($103 million) and AllianceBernstein ($95 million); and the major holders of MSI stock included Dodge & Cox ($787 million) and Morgan Stanley ($748 million).

Mega Funds Neutral on Garmin Ltd. (NASDAQ:GRMN): GRMN manufactures hand-held, portable and fixed-mount GPS systems for automotive, outdoor, marine and aviation markets. Twenty-two mega funds cut a net $42 million from their $1.30 billion prior quarter position. Major holders of GRMN included Capital Research Global Investors ($454 million), Fidelity Investments ($286 million) and Vanguard Group ($118 million).

Mega Funds Bearish on Research in Motion Ltd. (RIMM): RIMM is a Canadian manufacturer of BlackBerry handheld devices for the mobile communications market. Eighteen mega funds hold $1.66 billion, or just under 12% of the outstanding shares, including cutting a net $185 million from their prior quarter position in the company. Major sellers included Janus Capital Management ($139 million), Fidelity Investments ($137 million) and Royal Bank of Canada ($77 million).

Mega Funds Bearish on Tempur Pedic International (NYSE:TPX): TPX manufactures temperature sensitive visco-elastic pressure foam mattresses, pillows, and comfort/lumbar cushions. Twenty-four mega funds hold $1.71 billion or just over 46% of the outstanding shares, including cutting a net $387 million from their $2.09 billion prior quarter position. Major sellers included Wellington Capital Management ($233 million) and Fidelity Investments ($185 million).

Furthermore, as illustrated in the following table, mega funds have large positions in Mattel Inc. (NASDAQ:MAT), where they are bearish as they cut a net $205 million during the June quarter; Harley Davidson Inc. (NYSE:HOG), where are also bearish as they cut a net $205 million during the June quarter; Borg Warner Inc. (NYSE:BWA), a manufacturer of engine and drive-train components for light vehicle OEMs, where they are neutral as they only added a net $33 million during the June quarter; and Electronic Arts Inc. (ERTS), a developer of video game software and content for play on video game consoles, PCs, handheld platforms, and mobile phones, where they are bearish as they cut a net $268 million during the June quarter.

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General Methodology and Background Information: The latest available institutional 13-F filings of over 30+ mega hedge fund and mutual fund managers were analyzed to determine their capital allocation among different industry groupings, and to determine their favorite picks and pans in each group. These mega fund managers number less than one percent of all funds and yet they control almost half of the U.S. equity discretionary fund assets. The argument is that mega institutional investors have the resources and the access to information, knowledge and expertise to conduct extensive due diligence in informing their investment decisions. When mega Institutional Investors invest and maybe even converge on a specific investment idea, the idea deserves consideration for further investigation. The savvy investor may then leverage this information either as a starting point to conduct his own due diligence.

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.

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