Richard Driehaus is the founder of Driehaus Capital. He is also the architect of the overall investment philosophy of the company. According to Driehaus, the objective of the company is to create investment strategies that generate superior rates of return over a full market cycle. Driehaus Capital frequently beat the market and generated double-digit returns. Driehaus knows his stuff. In 2000, he was named one of the 25 most influential people in the mutual fund industry within the past 100 years by Barron's.
Recently Driehaus released his latest holdings in a 13F filing. Let's take a closer look at his most bullish bets and decide whether these stocks are worth investing in.
Golar LNG Ltd (GLNG): GLNG is the largest non-bond position in Driehaus' 13F portfolio. The top two positions of the fund were the corporate bonds of Sandisk Corporation (SNDK) and Ford Motor Company (F). At the end of last year, Driehaus had $31 million invested in GLNG. A few other hedge funds were also bullish about this stock. There were 18 hedge funds in total with GLNG positions at the end of the third quarter. For example, Charles Clough' Clough Capital Partners also had $40 million invested in this stock at the end of 2011.
GLNG performed very well over the past year. It returned a stunning 155.05% over the past 52 weeks, heavily beating the 3.78% for SPY. We think the stock will continue its strong performance. We are favorable about its healthy cash flow from operations, expanding profit margins and growing revenue and net income. The company's earnings are expected to grow at 88% on the average per year over the next few years. It is currently trading at $46.90 and its earnings next year are expected to be $2.36 per share. Therefore, its earnings for 2014 are estimated to be $4.44 per share and its P/E ratio for 2014 is about 10.56. The main competitor of GLNG is Teekay LNG Partners LP (TGP). It is expected to grow at 5% and its forward P/E ratio is 20.78. So its 2014 P/E ratio is 18.8, much higher than the 10.56 for GLNG.
Apple Inc (AAPL): AAPL is the fourth largest position in Driehaus' portfolio. Driehaus increased his AAPL stakes by 13% over the fourth quarter last year. As of December 31, 2011, his fund had more than $27 million invested in AAPL. We like AAPL. So do hedge fund managers. More than one third of the hedge funds tracked by us reported owning AAPL in their 13F portfolios. For instance, Rob Citrone's Discovery Capital Management had over $800 million invested in AAPL. Tiger Cubs Stephen Mandel and Chase Coleman were also bullish about AAPL. Both funds invested over $600 million in the stock.
Similar to GLNG, AAPL also had decent performance over the past year. It returned 38.30% over the past 52 weeks, beating the market by more than 34 percentage points. We think it is still not late to purchase AAPL and we believe AAPL will continue to be a winner in the future. The company has a leading position in the market. It designs and sells products that have a wide range of customers. We think Apple's products, including iPad, iPhone and MacBook, will achieve more market penetration internationally over the next few years. AAPL also has low valuations. It has a forward P/E ratio of 10.67 and its EPS is expected to grow at 18.76% per year in the next five years. So AAPL has a 2014 P/E ratio of only 7.57.
Other big positions in Driehaus' latest 13F portfolio include Taiwan Semiconductor (TSM), United Rentals Inc (URI), Carpenter Technology Corp (CRS) and Lear Corporation (LEA). Driehaus significantly boosted his TSM stakes by 157% over the fourth quarter. His fund had $27 million invested in this stock at the end of last year. URI is a new position. Driehaus initiated a brand new $24.5 million of URI over the fourth quarter. Both TSM and URI look attractive. TSM has a P/E ratio for 2014 of 11.8 and URI has a P/E ratio for 2014 of 8.12.
We like Driehaus and his stock picks. Technology, consumer goods and services are three major sectors that Driehaus invested in. We especially like his bets on the technology sector. Most tech stocks are trading at attractive multiples and we see great potential in the technology sector.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.