By Matt Doiron
13G filings are made with the SEC when a fund controls more than 5% of a company's shares outstanding and does not plan to engage in an activist campaign (or if such a fund later buys or sells shares). We keep track of these filings so that investors have the chance to follow what large funds or other investors are doing, and copy their ideas if they look attractive. Here are some 13G filings that have occurred in the past several days:
Cascade Investment, Bill Gates' foundation, increased its holdings of Republic Services (RSG) to over 76 million shares. At Monday's closing price of $28.93 per share, Cascade owns about $2.2 billion worth of stock in the $10.6 billion market cap company. Republic Services is a waste disposal company, serving residential, commercial, and industrial customers and is priced at 16 times trailing earnings. So far this year, Republic is up about 5% after plunging in April following a miss on earnings. Cascade has been increasing its position for quite some time: the group owned 59 million shares at the end of March 2011. Two months ago, we wrote an article about RSG and recommended the stock to long-term conservative dividend investors. Republic Services gained 10% since then and distributed $0.22 in dividends. (read our detailed analysis)
Highfields Capital Management, which was seeded by Harvard Management Company when it was founded in 1998, reported ownership of 9.2 million shares of records management and data protection company Iron Mountain (IRM). This represented 5.4% of the $5.6 billion market cap company. Iron Mountain trades at a trailing P/E of 37, and, based on analyst estimates, a forward P/E of 22; however, the company's business has been struggling with stagnant revenue and declining earnings.
Former Omega Advisors trader Larry Robbins and his team at Glenview Capital reported owning 7.9 million shares of interactive program software company Rovi (ROVI). This was up from the 700,000 shares in Glenview's portfolio at the end of March and represents over 7% of the shares outstanding (read more about Glenview's transaction). Rovi trades at 6.4 times its forward earnings estimates and at a five-year PEG ratio of 0.6, so Glenview and sell-side analysts are far more bullish about the company than other buy-side investors. Senator Investment Group was another investor in Rovi at the end of March, with 2 million shares.
Natural and organic foods company Annie's (BNNY) saw SAC Capital Advisors, managed by billionaire Steven Cohen, buy almost 900,000 shares. This gave SAC 5% of the company's shares outstanding. Annie's has seen good earnings growth recently and Wall Street analysts expect its growth to continue. While it trades at a rather high 93 times trailing earnings, its forward P/E based on analyst estimates is only 43. Annie's IPO'd in March and is up about 17% since then, versus about 7-8% for the S&P 500.
Finally, SAC Capital also invested in Digital River (DRIV), which provides online sales and marketing services such as hosting online stores. SAC now owns over 2 million shares of the company, giving it ownership of 5.4% of the shares outstanding. The stock is down about 6% so far in 2012. The company trades at 35 times trailing earnings, but sell-side analysts are optimistic about its prospects, and so Digital River carries a forward P/E ratio of 12 and a five-year PEG ratio of 1. However, in the company's most recent quarter it reported a decrease of over 30% in earnings compared to the same period in the previous year. Billionaire investor George Soros initiated a $147 million convertible note position in Digital River during the first quarter. Billionaire Jim Simons is also among DRIV investors with a $15 million position.