Analysis Of Institutional 5% Ownership Filings Last Week In Multiple Sectors

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 |  Includes: BKS, BRCD, HRC, LUK, MRGE, SCHW, SNV, TS
by: GuruFundPicks

Many leading funds filed forms 13-D and 13-G (and form 4) with the SEC last week, including mega funds PRIMECAP Management, Fidelity Investments, and Capital World Investors, indicating that they had amended their ownership in U.S. traded public companies. The forms are required to be filed within ten days, so the institutions traded these shares sometime during and after the last couple of trading days of December. Also, we have included, when applicable, SEC Form 4 filings by Institutions that are considered corporate insiders by virtue of their holding more than 10% ownership, and in many cases having representation on the Board of Directors.

The following are the most notable filings in multiple sectors last week; other articles that cover filings last week in specific sectors like basic materials, technology, consumer and other sectors can be accessed from our other page (for more info on Forms 13-D and 13-G, and how to interpret that, please refer to the end of this article):

Schwab Charles Corp. (NYSE:SCHW): SCHW provides brokerage, banking, and financial services to individual and institutional clients. On Monday, Pasadena, CA-based PRIMECAP Management, investment advisor to the Odyssey Mutual Funds and with over $62 billion in assets under management, filed SEC Form SC 13G indicating that it held 63.7 million or 5.0% of outstanding shares, an increase from the 58.1 million shares that it held at the time of its 13-F Q3 filing. PRIMECAP opened this position in Q2 (of 2011) with 30.4 million shares, and has been gradually building up this position. SCHW shares are currently near six-year lows, weak along with the rest of the financial sector, and they trade at a premium 17 forward P/E and 2.0 P/B compared to averages of 12.5 and 1.3 for its peers in the investment banking group.

Tenaris SA (NYSE:TS): a Luxembourg manufacturer of seamless and welded steel tubular products for energy and industrial applications. On Wednesday, Scotland-based Aberdeen Asset Management Plc filed SEC Form SC 13G indicating that it held 54.1 million or 9.2% of outstanding shares, an increase from the 52.2 million shares it held at the end of Q3. Aberdeen has been a long-time holder of Tenaris shares, since 2002, when the stock traded in the $3-$4 range, and has been accumulating shares since then. The stock is undervalued, trading at 13-14 forward P/E and 2.3 P/B compared to averages of 20.2 and 2.0 for its peers in the steel pipe & tube group, while earnings are projected to increase at a compound 24.3% annualized rate from $1.91 in 2010 to $2.94 in 2012.

Brocade Communications Systems Inc. (NASDAQ:BRCD): BRCD is an innovative network solutions provider that helps organizations worldwide transition smoothly to a virtualized world where applications are information can reside anywhere, by providing data center networking and storage area networking (SAN) solutions. On Friday, Elliott Associates filed SEC Form SC 13D/A indicating that it held 34.2 million or 7.5% of outstanding shares, a decrease from the 47.4 million it held at the end of Q3. Elliott opened this position in Q1 of 2011 and has rapidly built up this position, with most of the purchases in Q3 when it added 43.3 million shares to its 4.1 million share prior quarter position in the company. BRCD has been stuck in a trading range at the bottom for over nine years, and it trades at 10 forward P/E and 1.3 P/B compared to averages of 24.9 and 2.4 for its peers in the computer networks group.

Jeffries Group Inc. (JEF): JEF provides capital raising, mergers and acquisitions, restructuring and trade execution for small and mid-sized companies. On Tuesday, Los Angeles-based mega fund Capital World Investors, with over $280 billion in U.S. equity assets under management per its latest Q3 filing, filed SEC Form SC 13G/A indicating that it held 24.1 million or 12.1% of outstanding shares, an increase from the 13.0 million shares it held at the end of Q3 (when it opened a new position). JEF trades at 10-11 forward P/E and 1.1 P/B compared to averages of 12.5 and 1.3 for its peers in the investment banking group.

Synovus Financial Corp. (NYSE:SNV): SNV is a holding company with 30 first and second tier banking subsidiaries operating via 323 offices in GA, AL, FL, SC and TN. On Tuesday, Fidelity Investments filed SEC Form SC 13G/A indicating that it held 25.0 million or 3.2% of outstanding shares, a decrease from the 44.1 million shares it held at the end of Q3, thereby ceasing to be a 5% or more holder of the stock. Fidelity opened this position in Q3 of 2009, and in the latest reported Q3 it cut 8.1 million shares from its 52.2 million share prior quarter position.

Hill-Rom Holdings Inc. (NYSE:HRC): HRC is well-known as setting the standard for high-performing, intelligent bed systems and stretchers for medical facilities. In addition, it also develops and supplies other medical technologies and related services including patient support systems, non-invasive therapeutics, software and rental equipment for the healthcare industry. On Tuesday, Fidelity Investments filed SEC Form SC 13G/A indicating that it held 4.9 million or 8.0% of outstanding shares, a decrease from the 6.5 million shares it held at the end of Q3. HRC trades at 11-12 forward P/E and 2.5 P/B compared to averages of 19.7 and 3.8 for its peers in the medical products group, while earnings are projected to increase at 7.2% growth rate from $2.27 in 2011 to $2.61 in 2013.

Barnes & Noble Inc. (NYSE:BKS): BKS that made its name as the operator of retail bookstore chain Barnes & Noble with over 1,300 bookstores in 50 states selling books, magazines, and music, is rapidly transforming into a content, commerce and technology company. Now it provides access to books, magazines, newspapers and other content through its multi-channel distribution platform, including via the NOOK eBook Reader devices. On Monday, Daniel Tisch filed SEC Form SC 13G indicating that he holds 3.1 million or 5.1% of outstanding shares, including 1.5 million in the name of TowerView and another 1.6 million in the name of DT Four Partners. TowerView is the personal investment company of Tisch, the son of billionaire Wall Street investor and former CEO of CBS television, Lawrence Tisch, and it owned 1.2 million shares of BKS at the time of its 13-F Q3 filing. BKS currently trades near its lows, and gapped down just last Thursday after it announced that it would be spinning off its Nook digital business after that unit's sales grew 70% year-over-year. Its shares gapped down as investors were concerned that the planned spinoff of Nook would affect business at its brick-and-mortar B&N stores.

Merge Healthcare Inc. (NASDAQ:MRGE): MRGE develops medical imaging, clinical workflow process, and patient information management software applications. The medical imaging software solutions support end-to-end business and clinical workflow for radiology department and specialty practices, imaging centers and hospitals. The patient information management software applications improve their customers' productivity and enhance the quality of the patient experience. On Tuesday, New York-based investment management firm Gilder Gagnon Howe & Co. that is focused on an aggressive growth strategy and has assets under management of $3.9 billion filed SEC Form SC 13G/A indicating that it held 3.6 million or 4.0% of outstanding shares, a decline from the 4.0 million shares it held at the end of Q3. MRGE shares have fared well recently, up about 25% in the past year, and they trade at 18 forward P/E and 4.8 P/B compared to averages of 36.9 and 6.5 for its peers in the medical information systems group.

Credit: Fundamental data in this article were based on SEC filings, 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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