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

by: GuruFundPicks

Many leading funds filed forms 13-D and 13-G (and form 4) with the SEC last week, including Baillie Gifford, JPMorgan Chase & Co., and RBS Partners, indicating that they had amended their ownership in U.S. traded public companies. The forms are required to be filed within 10 days, so the institutions traded these shares sometime at or after the end of last year. 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, not detailed earlier in our coverage by sector (for more info on Forms 13-D and 13-G, and how to interpret that, please refer to the end of this article): International ADR (NASDAQ:CTRP): CTRP is a China-based consolidator of hotel accommodations, airline tickets and packaged tours targeting individual business and leisure travelers in China. On Tuesday, Edinburgh-based esteemed investment management firm Baillie Gifford, with over $100 billion in assets under management, including $22.2 billion in U.S. equity assets per its latest 13-F Q3 filing, filed SEC Form SC 13G indicating that it holds 2.55 million ordinary shares or 10.2 million ADSs (1 ordinary share equals four ADSs), a decrease of 115,124 ADS's from the 10.3 million it held at the end of Q3. Its shares have been weak since the company forecast a drop in Q4 margins in mid-November, and are currently down almost 35% in the past year, and they trade at 21-22 forward P/E and 3.7 P/B compared to averages of 70.5 and 5.4 for its peers in the internet commerce group. With the growth of the Chinese travel market behind it, CTRP seems like an attractive play, but we would wait on the sidelines until margin growth is resumed.

Asiainfo-Linkage Inc. (NASDAQ:ASIA): ASIA is a provider of telecom software solutions and IT products and services to telecom carriers and other enterprises in China. On Tuesday, JPMorgan Chase & Co. (NYSE:JPM) filed SEC Form SC 13G indicating that it holds 3.9 million or 5.3% of outstanding shares, an increase from the 3.5 million shares it held at the end of Q3. ASIA shares staged a strong rally last week, up 48% in the four trading days last week, ahead of and after the company announced the receipt of a "going private" proposal from Power Joy Limited, a subsidiary of CITIC Capital China Partners, pursuant to which Power Joy would acquire all of the outstanding shares in cash at a premium to last week's closing price of $11.78.

DCT Industrial Trust Inc. (NYSE:DCT): DCT is a publicly owned REIT that owns, acquires, develops and manages high-quality bulk distribution and light industrial properties in high volume distribution markets in the U.S. and Mexico. On Thursday, Tokyo-based Diam Co., Ltd., with almost $5.8 billion in U.S. equity assets per its latest 13-F Q3 filing, filed SEC Form SC 13G indicating that it holds 12.5 million or 5.1% of outstanding shares, an increase of 302,436 shares from the 12.2 million shares it held at the end of Q3. DCT shares have been strong recently and are approaching multi-year highs, and they trade at a current 14-15 forward P/E and 1.1 P/B compared to averages of 13.8 and 1.2 for its peers in the REIT equity trust group.

CBS Corp. (NYSE:CBS): CBS is a global media company engaged in TV and radio broadcasting, motion picture production, publishing and advertising. On Tuesday, JPMorgan Chase & Co. filed SEC Form SC 13G indicating that it holds 36.3 million or 5.9% of outstanding shares, an increase of 963,023 shares from the 35.3 million shares it reported at the end of Q3. CBS trades at 12-13 forward P/E versus the 11.0 average for the media conglomerate group.

Autozone Inc. (NYSE:AZO): AZO is a leading operator of over 4,800 retail auto parts stores nationwide and in Mexico and Puerto Rico, offering automotive parts and accessories that focus primarily on do-it-yourself (DIY) customers. On Thursday, Greenwich, CT-based RBS Partners led by value-focused famed hedge fund manager Edward Lampert filed SEC Form SC 13D/A indicating that it held 4.2 million or 10.8% of outstanding shares, a decrease from the 8.9 million it held at the end of Q3 and from the 4.9 million shares it held at the time of its prior SC 13D/A filing earlier this month on January 4th. AZO has been a stellar long-term performer rising over two-fold in the last three years, and it currently trades at a discount 13 forward P/E compared to 15.6 average for its peers in the retail/wholesale auto parts group, while earnings are projected to grow at an annual rate of 16.9% from $19.47 in 2011 to $26.62 in 2013.

General Discussion

Form 13-D is commonly referred to as the "beneficial ownership report," and is required when a person or a group of persons acquires beneficial ownership of more than 5% of the voting class of a company's equity securities. Form 13-G is the abbreviated version of the form that is allowed under certain circumstances.

The information in forms 13-D and 13-G is extremely timely as it is required to be filed within 10 days after the purchase, in contrast to 13-F quarterly filings by Institutions that are filed every three months. The information contained in 13-F filings, thereby, can as much as 18 weeks old by the time it is disseminated to the public. Furthermore, by virtue of their 5% ownership in public companies, the information contained in the 13-D and 13-G filings indicates only high confidence or high conviction moves by institutions and insiders, and hence can be interpreted to be of greater relevance to the investment community than the 13-F quarterly filings. Furthermore, 13-D and 13-G filings often are a precursor to a hostile takeover, company breakups and other "change of control" events, and often they will include a letter to management explaining the reason for their taking a large stake in the company.

Credit: Fundamental data in this article were based on SEC filings, I-Metrix by Edgar Online, Zacks Investment Research, Thomson Reuters and 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.

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