Wow, I sure would like to be invested in Bruce Sherman’s Private Capital. Two of his top three holdings are AT (getting bought by TPG/Goldman for $71.50) and MGM (up 30% today on talks with Tracinda). From the Stockpickr description:
“Bruce S. Sherman is Chief Executive Officer and Chief Investment Officer of Private Capital Management. He has led investment research and portfolio management activities since founding the firm in 1986. Sherman has been featured in the book Investment Gurus by Peter Tanous. Sherman’s investment philosophy and money management approach are rooted in a basic value approach to buying stocks. It has worked out well as he has returned an astounding 20% annually since starting his fund.”
PCM’s Investment Approach is a Four Step Process (From the website)
Step 1. Screening thousands of publicly traded companies each year to identify the potential for significant value that is currently unrecognized by the stock market.
Step 2. Confirming undiscovered value through rigorous financial analysis, focusing on “discretionary cash flow.”
Step 3. Learning all we can first-hand about the quality of management.
Step 4. Capturing the undiscovered value for our investors.
AT is a Hedge Fund Best Ideas Holding, and anyone tracking the strategy could sell it and replace it with Sherman’s next biggest holding, HPQ. (We make the substitution in the tracking portfolio at the close today.) Alternatively, one could hold it until the deal closing near year end 2007 for an approximate 3.6% premium.
You can view the rest of his holdings here: