Monday, November 12, 2012

Harvard's Largest U.S. Equity Positions (PEB; KNXA)

Always mindful that they are not required to show any options, swaps, non-U.S. or non-traded investments in the 13F.
From Insider Monkey:

Harvard’s Top Stock Picks
 Harvard Management filed its 13F earlier this month, reporting many of its long equity positions as of the end of September. Many of the endowment’s holdings are not reported on the 13F (see previous filings from Harvard Management), and as with many other institutions a good deal of investments are managed by other funds. In addition, some large positions are in exchange-traded funds which give the endowment exposure to a particular desired country or industry. Here are five of the largest stock positions that Harvard Management did report:

Mendillo and her team held their position of 2.6 million shares in Pebblebrook Hotel Trust (NYSE:PEB), a real estate investment trust that owns hotel properties including the Doubletree hotel and conference facility in Bethesda. Its dividend yield of 2.4% is low for an REIT, and its $77 million of operating cash flow on a trailing basis (earnings are generally not very useful in evaluating an REIT) compares with a $1.2 billion market cap. We don’t have much experience evaluating REITs and so we would pass, but investors with more familiarity may appreciate learning about Harvard’s stake here.

Kenexa Corporation (NYSE:KNXA) was another top pick with Harvard Management reporting ownership of 1 million shares at the end of September. Kenexa is an HR management software company whose products help businesses with their recruiting and other functions. Its stock is very sensitive to the overall market, with a beta of 2.8; the stock had been doing well this year even before the company received a buyout offer from IBM in August. At a current price of $45.90 and the transaction set to close at $46 per share, there may not be much room here for a retail investor to get involved. We noted in preparing this analysis that many of Harvard’s top picks as of the end of September were acquisition targets, including some that had closed this quarter....