Elfun Trusts' Top 5 Trades of the 1st Quarter
- By James Li
Elfun Trusts (Trades, Portfolio), part of Boston-based State Street Global Advisors, disclosed this week that its top five trades during the first quarter included a new position in Regions Financial Corp. (NYSE:RF), a boost to its Air Products & Chemicals Inc. (NYSE:APD) holding, the closure of its Alexion Pharmaceuticals Inc. (NASDAQ:ALXN) holding and reduced positions in Applied Materials Inc. (NASDAQ:AMAT) and First Republic Bank (NYSE:FRC).
Managed by Christopher Sierakowski and William Sandow, the fund seeks long-term capital appreciation by investing in common and preferred stocks of U.S.-based companies that have the potential to pay dividends in the future.
As of March 31, the fund's $3.58 billion equity portfolio contains 44 stocks with one new position and a turnover ratio of 6%. The top three sectors in terms of weight are technology, financial services and communication services, representing 25.17%, 17.45% and 14.28% of the equity portfolio.
Regions Financial
The fund purchased 3,547,200 shares of Regions Financial (NYSE:RF), giving the position 2.05% weight in the equity portfolio. Shares averaged $19.55 during the first quarter; the stock is modestly overvalued based on Thursday's price-to-GF Value ratio of 1.20.
According to GuruFocus, the Birmingham, Alabama-based regional bank's debt ratios outperform over 75% of global competitors, suggesting good financial strength. Banks usually have higher financial leverage than other industries.
Other gurus with positions in Regions Financial include Pioneer Investments (Trades, Portfolio), Steven Cohen (Trades, Portfolio)'s Point72 Asset Management and Ray Dalio (Trades, Portfolio)'s Bridgewater Associates.
Air Products & Chemicals
The fund purchased 210,800 shares of Air Products & Chemicals (NYSE:APD), boosting the position 559.15% and the equity portfolio 1.65%. Shares averaged $271.66 during the first quarter; the stock is modestly overvalued based on Thursday's price-to-GF Value ratio of 1.31.
GuruFocus ranks the Allentown, Pennsylvania-based chemical company's profitability 7 out of 10 on several positive investing signs, which include expanding profit margins and returns outperforming over 70% of global competitors.
Andreas Halvorsen (Trades, Portfolio)'s Viking Global Partners also has a holding in Air Products & Chemicals.
Alexion Pharmaceuticals
The fund sold 246,000 shares of Alexion Pharmaceuticals (NASDAQ:ALXN), trimming the equity portfolio 1.14%. Shares averaged $154.75 during the first quarter; the stock is fairly valued based on Thursday's price-to-GF Value ratio of 1.05.
GuruFocus ranks the Boston-based biotech company's profitability 9 out of 10 on several positive investing signs, which include a three-star business predictability rank and an operating margin that has increased approximately 15.4% per year on average over the past five years and is outperforming more than 95% of global competitors.
Applied Materials
The fund sold 426,500 shares of Applied Materials (NASDAQ:AMAT), curbing the position 33.82% and the equity portfolio 1.09%. Shares averaged $110.39 during the first quarter; the stock is significantly overvalued based on Thursday's price-to-GF Value ratio of 1.90.
GuruFocus ranks the Santa Clara, California-based semiconductor equipment company's profitability 9 out of 10 on several positive investing signs, which include a high Piotroski F-score of 8 and profit margins and returns outperforming more than 90% of global competitors.
First Republic Bank
The fund sold 162,000 shares of First Republic Bank (NYSE:FRC), trimming the position 27.45% and the equity portfolio 0.71%. Shares averaged $161.86 during the first quarter; the stock is significantly overvalued based on Thursday's price-to-GF Value ratio of 1.34.
GuruFocus ranks the San Francisco-based bank's financial strength 2 out of 10 on several warning signs, which include cash-to-debt ratios underperforming over 80% of global competitors and debt-to-equity ratios underperforming more than 70% of global banks.
Disclosure: No positions.
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This article first appeared on GuruFocus.
