Many leading funds filed forms 13-D and 13-G (and form 4) with the SEC on Friday, indicating that they had amended their ownership in U.S. traded public companies. The following are the most notable institutional trades based on our analysis of those filings (for more info on Forms 13-D and 13-G, and how to interpret that, please refer to the end of this article):
Clearwire Corp. (CLWR): CLWR provides wireless broadband networks for delivery of residential and mobile internet access and voice services. CLWR customers connect to the Internet using licensed spectrum, thus eliminating the confines of traditional cable or phone lines. The company offers its service in fifty U.S. markets, as well as in Europe. On Friday, Baltimore, MD-based hedge fund sponsor Chesapeake Partners Management filed SEC Form SC 13G indicating that it holds 28.27 million shares, an increase from the 10.71 million shares it reported holding at the end of Q4. This makes CLWR the second largest position in their portfolio, and with the purchase, Chesapeake is now the second largest institutional shareholder of CLWR shares, behind Fidelity Investments that holds 51.25 million shares.
CLWR recently received good news last month when Sprint decided to terminate its 15-year spectrum hosting agreement with Phil Falcone's wireless startup LightSquared. Its shares are currently forming a bullish consolidation pattern at the lows, between $2.00's and $2.40's; a break to the upside from this consolidation pattern is most likely to lead to a rally based on both the technical accumulation pattern at the lows, as well as fundamental news, including the termination of LightSquared by Sprint and recent deals the carrier has struck with Cricket LTE and FreedomPop.
DR Horton Inc. (DHI): DHI builds single-family detached, as well as attached homes, such as town homes, duplexes, triplexes and condominiums, for first-time and move-up home buyers in 26 states and 72 metropolitan markets. On Friday, Edinburgh, Scotland-based Edinburgh Partners, with $2.07 billion in 13-F assets at the end of Q4, filed SEC Form SC 13G indicating that they held 19.06 million or 6.2% of outstanding shares, a decrease from the 19.58 million shares it reported holding at the end of Q4. Even after the sale, Edinburgh Partners continues to be the second largest institutional holder of DHI, behind Fidelity Investments, and DHI is also ranks among the top five positions in its 13-F portfolio for Q4.
DHI reported have rallied nicely YTD, along with the rest of the homebuilders, and the homebuilder ETF ($XHB) is up over 25% YTD and almost 80% from the lows last October. A number of brokers have recently issued upgrades in the sector, included an upgrade of the sector by Credit Suisse three weeks ago that lifted DHI from Neutral to Outperform. DHI beat analyst earnings (9c v/s 5c) estimates in its latest Q4, and the stock currently trades at 18-19 forward P/E and 1.8 P/B compared to averages of 19.6 and 1.4 for its peers in the residential/commercial building group, while earnings are projected to rebound strongly from 23c in 2011 to 82c in 2013.
Delphi Automotive Plc (DLPH): DLPH is a manufacturer of vehicle components, powertrain, safety and thermal technology solutions for automotive and commercial vehicle markets worldwide. On Friday, famed hedge fund company Paulson & Co., with over $35 billion in assets under management, including $13.9 billion in 13-F assets per their latest Q4 filing, filed SEC Form 4 indicating that it sold 0.7 million shares. This is on top of the sale of 1.1 million shares of DLPH by Paulson & Co. that we reported just last week; the hedge fund held 51.7 million shares of DLPH at the end of Q4.
DLPH has been a strong performer, rising more than 50% from its $20 IPO price about four months ago. The company reported a stellar Q4 at the end of January, beating estimates and guiding FY earnings higher. Its shares are up strongly since that stellar report; however, they still trade at a reasonable 7-8 forward P/E and 6.2 P/B compared to averages of 8.7 and 2.7 for its peers in the auto/truck OEM group, while earnings are projected to grow at a strong 11.9% annual rate from $3.33 in 2011 to $4.17 in 2013.
Other major institutional filings in the last week included:
- Infinity Pharmaceuticals (INFI), an innovative cancer drug discovery and development company, in which biotech-focused Quogue Capital, led by Wayne Rothbaum, reported holding 2.15 million shares; and
- Transcept Pharmaceutical (TSPT), a development stage biotech that develops proprietary therapeutic products in the field of neuroscience, in which New York-based Healthcor Group, with $2.65 billion in 13-F assets at the end of Q4, and investing primarily in later-stage developmental and growing mid-sized companies in the healthcare sector, reported holding 700,000 shares, an increase from the 566,400 shares that it held at the end of Q4.
Credit: Fundamental data in this article were based on SEC filings, Zacks Investment Research, Thomson Reuters and Briefing.com. The information and data is believed to be accurate, but no guarantees or representations are made.
Disclaimer: Material presented here is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. Further, these are our 'opinions' and we may be wrong. We may have positions in securities mentioned in this article. You should take this into consideration before acting on any advice given in this article. If this makes you uncomfortable, then do not listen to our thoughts and opinions. The contents of this article do not take into consideration your individual investment objectives so consult with your own financial adviser before making an investment decision. Investing includes certain risks including loss of principal.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.