Although Feb. 14 is better known as Valentine's Day, it's also a date of particular significance for investment managers.
#-ad_banner-#For investment managers overseeing a fund with assets under management north of 0 million, Feb. 14 is the deadline to file a Form 13F with the SEC. The 13F outlines certain types of a fund's assets, predominantly long exchange-traded positions, certain debt positions, and some equity options.
Taken as a snapshot at the end of each quarter, these disclosures can give individual investors valuable insight into the minds of the investing elite.
Although typically filed 45 days after the end of a quarter, some funds release their documents early. Bridgewater Associates recently did so for last year's fourth quarter. Founded by legendary billionaire Ray Dalio in 1975, Bridgewater now commands roughly 0 billion in capital, a staggering amount that makes it the largest hedge fund in the world. Dalio's own net worth has crept up to nearly billion, according to Forbes.
I've dug into Bridgewater's 13F with two criteria in mind: Find stocks paying yields higher than 3%, and see which of the bunch were added to by the fund between the third and fourth quarters last year. Three names out of nearly 300 positions made the cut.
Health Care REIT (NYSE: HCN) sits at the top of our list, bestowing investors with a generous dividend yield of 5.6%. High dividends are par for the course for real estate investment trusts like HCN given their tax structure, but HCN stands out due to the fact that Bridgewater increased its position from roughly 17,500 shares at the end of the third quarter to over 325,000 shares a quarter later.
Although HCN has lost 9% over the past 12 months, analysts at J.P. Morgan have taken a liking to the health care and senior living real estate player, bumping the stock up to "overweight" last month. Declining interest rates since the start of this year are helping to hold up the stock price as well, seeing HCN up 6% while the market has stayed in the red.
|Founded by Ray Dalio in 1975, Bridgewater now commands roughly 0 billion in capital. Dalio's own net worth has crept up to nearly billion, according to Forbes.|
Tobacco giant Altria Group (NYSE: MO) also received extra attention from Bridgewater with a modest increase in shares from 54,600 to 66,100 between last year's third and fourth quarters. In its most recent earnings report, Altria missed expectations slightly but boosted its forecast for 2014.
Investors have benefited from Altria's continued buyback program, with a quarter of a billion dollars purchased in the past quarter alone. Another way Altria continues to reward its investors is through a 5.4% yield and strong dividend growth spanning decades. Unfortunately, it has not translated to a higher stock price given the decline of the stock market this year. Wall Street is still a fan of MO, however, with average one-year expectations of better than 13% upside.
Not to be outshone, Ventas (NYSE: VTR) rounds out the bottom of this screen with a respectable yield of 4.6%. Like HCN, VTR is a health care REIT, operating primarily in the U.S. and Canada. Also similar to HCN, VTR is down quite a ways from its 52-week high (more than 50%), but that did not stop Bridgewater from building its position between the past two quarters by nearly 300%, or over 260,000 shares. Investors who bought VTR or added to their position during the same time have been rewarded with upside so far in 2014, and the company's earnings report this month showed an increase in revenues year-over-year, prompting an 8% increase in its dividend. Sell-side analysts had been bullish about Ventas before the announcement, with both UBS and RBC Capital upgrading VTR since early January.
Risks to consider: Although rich with information, a 13F filing does not paint the whole picture of a fund's holdings. Short positions and various other assets are not required to be disclosed, and the rationales behind a fund's positions are not explicitly outlined. Additionally, a fund's positions could change between the end of a quarter and the time of filing. Investors should use 13F's as supplemental information.
Action to Take –> Income-generating stocks are a great addition to any portfolio, and these dividend-churning machines have been given the thumbs up by some of Wall Street's finest. However, the price gains of these three stocks may be meager this year given potentially rising interest rates and the weak footing of 2014 so far. Count on making these long-term plays if you plan to dive in.
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LONDON (MarketWatch) — Ford Motor Co.’s Alan Mulally and internal candidate Satya Nadella are front-runners in Microsoft’s search for a new chief executive, Bloomberg reported Thursday. Nadella heads up the software maker’s cloud and enterprise business, while Mulally is seen as appealing to those who would like an outsider to take the helm. Citing people familiar with the matter, Bloomberg said ex-Nokia CEO Stephen Elop and Microsoft executive Tony Bates, former CEO of Skype, are still in the running to replace outgoing head Steven Ballmer, but are seen as less likely contenders at the moment. Microsoft, which declined to comment to Bloomberg, said in August that Ballmer would stand down as CEO within a year.
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