Joel Greenblatt: Buys, Sells, Portfolio

Includes: AMP, ARO, AXP, AZO, WMT
by: Joel Greenblatt

Joel Greenblatt is founder and managing partner of Gotham Capital, founder of the New York Securities Auction Corporation and the online Value Investors Club, and adjunct professor at Columbia University Business School. Greenblatt started as a pure value investor, drawn to companies that appeared cheap, but was later influenced by Warren Buffett's view that growth is part of the value equation. He is author of You Can Be a Stock Market Genius, The Little Book That Beats the Market, and A Capital Offense: A Hedge Fund Manager's Struggle for Justice and the Allied Capital Scandal.

Using the "Magic Formula" for investing, described in his book, Greenblatt has seen annual returns of over 30% by ranking stock based on return on capital and a high earnings yield (based on his estimate of normalized earnings).

Mr. Greenblatt maintains a very concentrated portfolio of stocks. The latest SEC 13F filing shows a total liquidation of Aeropostel (NYSE:ARO) and Autozone (NYSE:AZO). His current portfolio consists solely of American Express (NYSE:AXP) and Wal-Mart (NYSE:WMT), with call options on Ameriprise Financial (NYSE:AMP). Data from quarter ending 12/31/2006; filed 2/14/2007 .

Recent sells for Gotham Capital:

  • Aeropostale (ARO): Sold 600,000 shares = 38% of portfolio; liquidated the firm's position
  • AutoZone (AZO): Sold 22,100 shares = 5% of portfolio; liquidated the firm's position

Gotham Capital Portfolio as of 12/31/2006:

  • American Express (AXP): 62,100 common shares ($3.7m); 15% of overall stock holdings (owns call options on an additional $109.2 million of AXP)
  • Wal-Mart (WMT): 442,000 common shares ($20.4m); 85% of overall stock holdings (owns call options on additional $138.5 million of WMT)
  • Ameriprise Financial (AMP): owns call options on $19.6 million of AMP stock