|CGM Investors Hoping Heebner's Q2 Turnaround Takes Hold|
* On Wednesday July 15, 2009, 11:08 am EDT
Ken Heebner, once one of the top performing fund managers and still one of the most closely watched, continues to face challenges after world-beating numbers in 2007. However, a number of his bets from the start of Q2 have fared well, and CGM investors will be hoping that the performance is just the start of a rebound in Heebner's fortunes.
Year to date, Heebner's flagship CGM Focus Fund (Nasdaq: CGMFX - News) is down by about -10%, while the S&P 500 has put up breakeven performance. According to Morningstar, investors pulled $326 million out of the fund in the first half of the year. The Focus Fund returned a remarkable 80% in 2007, raising his profile with many investors.
CGM's top holdings from the start of Q2 across all of its funds showed Heebner making moves in several sectors, opening new positions in dotcom retailer Amazon.com (Nasdaq: AMZN - News), electronics retailer Best Buy (NYSE: BBY - News), Brazilian oil giant Petrobras (NYSE: PBR - News, PBR-A - News), and bank PNC Financial Services (NYSE: PNC - News).
Even though CGM Focus has had a rough year, Q2 turned out not be all that bad, reversing some of the damage from a poor Q1. The fund returned about 11% during Q2. Looking again at Heebner's holdings, one can see that some of his financial bets - assuming he still holds them - have begun to pay off. Along with PNC, Goldman Sachs (NYSE: GS - News), JPMorgan Chase (NYSE: JPM - News), Morgan Stanley (NYSE: MS - News), and insurer Metlife (NYSE: MET - News) are all among the best performing stocks from his reported holdings at the start of Q2. Heebner has reportedly sold many of the investments he made in the insurance sector beginning late last year, so it's quite possible that he no longer holds shares of Metlife.
Of course, there's no telling if Heebner is still in any of these names, and he is known for making big moves very quickly so there has no doubt been some shuffling among his top holdings over the last few months.