Advanced Investment Partners’ Fourth Quarter Top Stock Picks


Douglas W. Case, along with his partners, founded Advanced Investment Partners in 1996. Since then, Case has served as the hedge fund’s President, CIO and manager. He uses an elaborate system of quantitative analyses and benchmarks to guide the success of Advanced Investment Partners. Case also supports socially responsible investing, meaning that he selects stocks based to a degree on their environmental, social and governance policies (a practice commonly referred to as ESG).

Here we compiled a list of top 25 stocks in Advanced Investment Partners’ portfolio, based on its fourth quarter 13F filing which was released on February 8th. Besides new positions in Prologis Inc. (PLD) and Lyondellbasell Industries (LYB), most of Advanced Investment Partners’ large positions realized strong returns since the end of September.

Company Ticker Value (x$1000) Activity Return (since Sep 30)
Apple Computer Inc. AAPL 24,731 -1.49% 23%
Intl Business Machines Corp IBM 20,220 -0.66% 11%
Intel Corp INTC 17,294 7.19% 27%
Procter & Gamble Comp PG 16,531 3.97% 2%
Wyndham Worldwide Corp WYN 14,420 80.83% 44%
United Parcel Svc Inc. UPS 14,194 -3.39% 23%
Verizon Communication VZ 13,079 -1.03% 6%
Northeast Utils NU 11,011 5.46% 6%
Amazon Inc. AMZN 10,957 -2.94% -15%
Mckesson Corporation MCK 10,783 2.25% 14%
Express Scripts Inc. ESRX 10,235 6.36% 38%
Exxon Mobil Corp XOM 9,998 -24.49% 20%
Precision Castparts PCP 9,582 -1.34% 9%
Home Depot Inc. HD 9,499 13.77% 39%
Equifax Inc. EFX 8,886 9.78% 30%
Simon Ppty Group Inc. SPG 8,781 -1.35% 26%
Consolidated Edison ED 8,634 2.04% 5%
Prologis Inc. PLD 8,563 New 39%
Colgate Palmolive Co CL 8,513 8.34% 5%
Lyondellbasell Industries LYB 8,134 New 113%
Salesforce Com Inc. CRM 8,056 -0.84% 7%
American Tower Corp AMT 7,906 16.18% 18%
Conocophillips COP 7,530 -8.06% 15%
Goldman Sachs Group GS 7,195 -9.79% 23%
Caterpillar Inc. CAT 7,021 32.66% 56%

Wyndham Worldwide Corp (WYN) returned a whopping 44% since the end of the third quarter. Advanced Investment Partners made a smart move when the firm tripled its WYN position to 211 thousand shares by the end of September. During the fourth quarter, Advanced Investment Partners continued increasing its position in WYN by nearly 81% and had 381 thousand shares as of the end of December. Beside Advanced Investment Partners, many hedge funds were also bullish about WYN, including Stephen Mandel’s Long Pine Capital and Larry Robbins’ Glenview Capital. The hotel operator is now trading near its historical high. Although recently the company reported that its Q4 earnings were below its previous year’s level, its adjusted profit beat analysts’ expectations. Moreover, the company raised its quarterly dividend payout by 53%. We are bullish about WYN, as the stock is now approaching $43 per share.

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Advanced Investment Partners initiated new positions in Prologis Inc. (PLD) and Lyondellbasell Industries (LYB) during the fourth quarter. Both stocks posted large gains. PLD was wavering between $22 and $30 in the fourth quarter, and the stock surged in 2012 from $28 to more than $33. Since it’s quite possible that Advanced Investment Partners built its PLD position at $26, the firm might have already gained more than 25%. Steven Cohen’s SAC Capital is also among the hedge funds that are bullish about PLD. LYB has increased by 113% so far since the end of September when the stock dropped to a 52-week low. At the end of December, LYB was trading at $34, while the stock is now trading at $45. So it’s obvious that Advanced Investment Partners at least made a profit of 30%.

Amazon Inc. (AMZN) is the only position in this list that lost money to its investors. The stock slumped in the fourth quarter and has lost 15% since the end of September. Advanced Investment Partners slightly decreased its position in AMZN by 2.94%, leaving 63 thousand shares. Since Advanced Investment Partners’ AMZN position was built during the first quarter of 2010, the firm still made about a 30% profit in AMZN since initiating its position in the company. Billionaire Ken Fisher’s Fisher Asset Management had $550 million in Amazon at the end of the third quarter.

Other stocks in this list that posted large gains include Apple Computer Inc. (AAPL), Intel Corp (INTC), United Parcel Svc Inc. (UPS), Express Scripts Inc. (ESRX), Exxon Mobil Corp (XOM), Home Depot Inc. (HD), Equifax Inc. (EFX), Simon Property Group Inc. (SPG), Goldman Sachs Group (GS), and Caterpillar Inc. (CAT). Overall, seventeen out of Case’s top twenty-five stocks outperformed the market.

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