|"Bigfoot" steps in.|
Heebner Buys Financials, Abandons Top Energy Stakes (Update2)
By Sree Vidya Bhaktavatsalam
Nov. 14 (Bloomberg) -- Kenneth Heebner, the fund manager who beat all peers last year by buying energy stocks and selling financials, reversed course in the third quarter, snapping up Citigroup Inc., Wells Fargo & Co. and Bank of America Corp.
Heebner's Capital Growth Management LP, based in Boston, bought 15.4 million shares of Wells Fargo, 27 million shares of Citigroup and 15.6 million shares of Bank of America in the three months ended Sept. 30, according to a regulatory filing today. The combined stakes equal about 15 percent of the U.S.- listed stocks reported in the filing.
The firm sold all its shares of Schlumberger Ltd., along with those of Freeport-McMoran Copper & Gold Inc., Peabody Energy Corp., and Consol Energy Inc. The four companies were four of the money manager's top five holdings as of June 30, Bloomberg data show.
Heebner, 68, known for his rapid movements in and out of stocks, exited banks in the second quarter of 2007 after saying that the credit crisis would hobble earnings. He put more than three-fourths of the fund into natural resources and energy, helping his CGM Focus Fund to an 80 percent gain in 2007, the best performance by a U.S. stock fund.
The $7.4 billion CGM Focus has dropped 46 percent this year, lagging behind 99 percent of rival funds, according to Bloomberg data. The fund has been hurt by plunging prices of oil and commodities. Crude oil prices have tumbled 62 percent since reaching a record $147.27 on July 11, as a global economic slowdown cut demand.
Heebner wasn't available for comment on the filing with the U.S. Securities an Exchange Commission, spokeswoman Martha McGuire said.
Nicknamed ``Bigfoot' by industry professionals for his large and sudden trades, Heebner had almost half of the firm's portfolio in financial companies as of Sept. 30, Bloomberg data show. Wells Fargo is the largest holding owned by Capital Growth, while Citigroup and Bank of America rank third and fourth.
Energy and materials companies accounted for 13 percent of Capital Growth's assets, the data show. The firm held 13 million shares of Petroleo Brasileiro SA, the Brazilian oil company. Petrobras is the firm's second-biggest holding.
Heebner also purchased shares of Wal-Mart Stores Inc. and McDonald's Corp. in the quarter, as the companies drew cash- strapped customers looking for cheaper prices. Capital Growth bought 7.95 million shares of Wal-Mart, a new position, and 7.68 million shares of McDonald's.
Wal-Mart shares have risen 13 percent this year, while those of McDonald's have fallen 5.1 percent. The Standard & Poor's 500 Index has declined 40 percent.
Heebner is the co-founder of Capital Growth, which manages more than $10 billion in assets. Besides CGM Focus, Heebner manages the $2.3 billion CGM Realty Fund and the $674 million CGM Mutual Fund.