Many leading funds filed forms 13-D and 13-G (and form 4) with the SEC on Tuesday, including Baillie Gifford, Relational Investors, and BMO Financial Corp., 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 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 on Tuesday.
Baidu Inc. (BIDU): Often touted as the Google (GOOG) of China, BIDU is a leading Chinese provider of internet search, targeted online advertising and other internet content services. On Tuesday, Edinburgh-based esteemed investment management firm Baillie Gifford, with over $100 billion in assets under management, including $24.5 billion in U.S. equity assets at the time of its latest 13-F Q3 filing, filed SEC Form SC 13G/A indicating that it held 26.2 million shares, an increase from the 26.0 million shares it held at the end of Q3 (or a purchase of over $25 million). Baillie Gifford is currently the largest institutional holder of BIDU shares, and a long-term holder since 2008. We too are firm believers in the long-term value of BIDU, and recommended buying BIDU in our coverage of Chinese equities on October 3, when it traded at $105, identifying it as the best opportunity among Chinese equities; it is now up 25% from that price after rising as high as 40% during the month after our recommendation.
Besides Baidu, in separate SC 13D/G filings, Baillie Gifford also indicated that it increased its holdings in New Oriental Education & Technology ADS (EDU), a Chinese provider of foreign language training and test preparation courses for admissions and assessment tests in the U.S., the PRC and Commonwealth countries, in which it increased its holding by 12,000 shares (or $0.3 million) to 16.73 million shares; and First Solar Inc. (FSLR), a manufacturer and seller of solar modules using a thin-film semiconductor technology for residential and commercial markets in the U.S., Europe and Asia, and also a provider of photovoltaic solar power systems, in which it increased its holding by a 15,600 shares (or $0.7 million) to 6.47 million shares. Baillie Gifford is the largest institutional holder of EDU, and it is the second largest institutional holder of FSLR.
PMC Sierra Inc.(PMCS): PMCS designs, develops, markets and supports high-performance internet infrastructure semiconductor networking solutions that enable the transportation and storage of large quantities of digital data. It sells its semiconductor devices in five market segments, including enterprise storage, fiber access, wireless access, metro transport and aggregation, and printer and enterprise networking. On Tuesday, San Diego-based shareholder activist value-oriented hedge fund manager Relational Investors, with $5.3 billion in equity assets under management per its latest 13-F Q3 filing, filed SEC Form SC 13D indicating that it held 16.5 million or 7.2% of outstanding shares, an increase of 8.7 million shares from the 7.8 million it held at the end of Q3. This makes Relational the third largest institutional holder behind Fidelity Investments (32.5 million shares) and T Rowe Price (21.6 million shares). Relational initiated the position in Q1 of 2011, and has been adding to it since then, including adding 1.3 million shares in Q3.
In its filing, Relational elaborated on its rationale behind the investment, stating its belief that "the company's share price does not adequately reflect the longer-term earnings and cash flow generating potential," and arguing that "the discount is at least partially attributable to the company's business mix and capital allocation strategy." Furthermore, Relational also stated that the Company may need to consider "broader strategic alternatives" if it is unable to achieve sales growth in its Optical and Mobile segments.
Manitowoc Co. (MTW): MTW is a manufacturer of cranes and related lifting equipment for the energy, petrochemical, construction and mining markets, and it also serves the foodservice industry by providing ice machines, ice/beverage dispensers and refrigeration products. On Tuesday, Chicago-based BMO Financial Corp., a holding company that is a subsidiary of the Bank of Montreal, with over $50 billion in U.S. equity assets under management at the time of its 13-F Q3 filings, filed SEC Form SC 13G indicating that it held 8.0 million or 6.1% of outstanding shares, an increase from the 0.06 million it held at the end of Q3. This makes it now the largest institutional holder of MTW shares, ahead of Vanguard Group (6.0 million shares), that was previously the top holder. MTW trades at a fair 12-13 forward P/E and 3.1 P/B compared with averages of 12.3 and 2.0 for the construction and mining machinery group.
Incyte Corporation (INCY): INCY develops small molecule drugs for hematologic and oncology indications, and inflammatory and autoimmune diseases. On Tuesday, New York-based biotech-focused hedge fund Baker Bros. Life Sciences Capital, with $2.1 billion in assets under management, filed SEC Form 4 indicating that it now holds 12.4 million shares, after purchasing 0.5 million shares for $8.9 million. This is an increase from the 11.1 million shares that Baker Bros. reported owning at the end of Q3, and the 11.9 million shares it reported owning in a prior 13-D/G filing that we reported in mid-December. Also, on Tuesday, 14159 Capital controlled by brothers Julian and Felix Baker of Baker Bros., filed SEC form 4 indicating that it purchased 14,625 shares for $0.24 million, increasing its holding to 0.36 million shares.
Jaguar Mining Inc. (JAG): JAG is a Canadian company engaged in the exploration, development and extraction of gold in Minas Gerais, Brazil. On Tuesday, Hong Kong-based Senrigan Capital Management filed SEC Form SC 13G indicating that it held 8.0 million or 9.5% of outstanding shares, thereby also making it the largest institutional holder of JAG shares. JAG trades at 13-14 forward P/E and 2.2 P/B compared with averages of 12.0 and 3.6 respectively for its peers in the gold mining stocks index, while earnings are projected to more than double from 26cents in 2011 to 54cents in 2012.
Credit: Fundamental data in this article were based on SEC filings, I-Metrix® by Edgar Online®, Zacks Investment Research, Thomson Reuters and Briefing.com. The information and data is believed to be accurate, but no guarantees or representations are made.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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.
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