BALTIMORE (Stockpickr) – Ken Fisher is one of the most well known money managers in the world. Through his long-running Forbes column, “Portfolio Strategy,” Fisher has introduced countless readers to the precepts behind his investment strategy. And with $36 billion in assets under management, his firm, Fisher Investments, has put those precepts to work.
Fisher’s appearances in Forbes aren’t relegated to his columns — he’s also a member of the Forbes list of the 400 richest Americans, with a $1.6 billion fortune.
All the more reason to take a look at the stocks Fisher’s firm added to its client accounts in 2011. This week, we’ll do just that, exploring five newly initiated positions per Fisher Investments’ most recent SEC filings.
Agricultural nutrient firm Mosaic(MOS) was the largest new addition to Fisher Investments’ portfolio in the last quarter. The firm initiated the position with a 3.48 million-share investment.
Mosaic is one of the leading producers of phosphate and potash, two of the most widely used agricultural fertilizers in the world. While Mosaic’s supply is currently centered around North American mines, a new phosphate mining interest in Peru should help to shore up Mosaic’s access to quality rock in the future.
Rising commodity prices bode well for Mosaic, because they directly drive top-line increases for the company. That said, commodity price swings are a double-edged sword; while prices are on the upswing now, falling output prices could impact the company’s profitability.
Strong exposure to the agricultural sectors of emerging markets like Brazil and China should help fuel growth for Mosaic in a much more sustainable manner than commodity price increases alone. For exposure to the agricultural industry, Mosaic is a good option right now.
Mosaic showed up on a list last month of 5 Agriculture Stocks That Analysts Love
Apparel maker Phillips Van-Heusen(PVH) delivered strong fourth-quarter numbers at the end of March, with quarter-over-quarter sales growth in most operating segments as well as a massive revenue increase from the Tommy Hilfiger acquisition that was finalised in 2010. Phillips Van-Heusen has been one of the biggest beneficiaries of increased consumer spending, a trend that should continue to be the primary driver for growth in the entire apparel industry in 2011.
Even though the company’s new brand should be a big factor in that growth, the decision to acquire Hilfiger hasn’t come without significant tradeoffs for shareholders: Most notably, it added a significant chunk of long-term debt to the company’s formerly spotless balance sheet. That said, the bargain price PVH paid for the brand more than makes up for that debt increase.
As Hilfiger’s operations start to shine through to PVH’s consolidated financial statements, expect investors to be impressed by greatly increased fundamental performance. Increased cash flow generation abilities will likely be put to work to continue reducing that debt load in the near-term. Fisher Investments bought 137,965 shares in the latest quarter, making it one of the firm’s largest new positions.
Phillips Van-Heusen was one of Goldman’s 11 best consumer stocks for 2011.
2011 is already shaping up to be a strong year for the Eastman Chemical (EMN); the company’s stock price is up 20% this year. From a technical standpoint, the company plowed through the psychological $100 barrier this week, clearing the way to higher prices. Ultimately, though, it was the stock’s impressive fundamentals that drove that share price performance.
Eastman is one of the biggest chemical and materials manufacturers in the world, with a hand in producing specialty products like cigarette filters, adhesives, and polymers. Until recently, Eastman had been a leading maker of PET plastics — a business unit that the firm divested itself of late last year. The move makes considerable sense for Eastman, and should ultimately remove a drag on earnings from the company’s income statement.
While strong customer diversification in Eastman’s remaining businesses have helped sustain sales in recent years, they also take away some of the pricing power that the firm would have over a more concentrated customer base. As a result, margin squeeze is a continual concern that investors should watch closely. Fisher investments picked up a 74,901 share stake in the latest quarter.
Eastman is one of 20 top-yielding chemicals stocks.
Nike(NKE) has long been the standard bearer of the sports apparel industry. And despite considerable attempts by attractive competitors such as Under Armour(UA) to usurp its influence over the industry, Nike remains just that. Even so, the company now has to reach a bit farther for growth given the incredibly saturated nature of the U.S. and European sports apparel industries.
Nike is accomplishing that feat by marketing to a burgeoning middle class population in a number of developing countries, where its branded apparel represents an attainable status symbol. Complacency will be the death of Nike, and investors should be well aware of that fact – while Nike continues to be league leader, intense competition means that the firm will need to stay on its game to keep its spot. Fisher investments initiated a 76,763 share position in the company.
Nike was one of Goldman’s 11 best consumer stocks for 2011.
Another big position for Fisher in the last quarter was Sara Lee(SLE), the $11.2 billion global food manufacturer that lays claim to major brands such as Jimmy Dean, Hillshire Farm and namesake Sara Lee. Fisher and company picked up a 183,765 share stake in Sara Lee in the latest quarter.
Sara Lee has been undergoing a major corporate restructuring in recent years, divesting itself of several major business lines by way of spin-offs and sales. Those moves have kept the company’s balance sheet enviable right now — and important factor as economic worries continue to weigh on retail investors.
As investors keep trading back up to Sara Lee’s brands, the company should see continued growth in 2011 — and a history of returning value to shareholders gives investors all the more reason to take a bite of this food stock.
Sara Lee shows up on a recent list of S&P 500 stocks with big insider buying and selling.
To see the rest of the firm’s plays, check out the Ken Fisher Portfolio on Stockpickr.