|Heebner’s CGM Slump Continues In 2010|
(CGMFX, ANR, BHP, CLF, SCCO, FCX, TCK, AAPL, CMI, F, GS, MS)
After lagging its peers in 2008 and 2009, Ken Heebner’s CGM Focus Fund (CGMFX) slipped by another -6.3% this year through June 15. According to data from Morningstar the fund is off by -54% since June 30 2008, compared to an -8.7% loss by the S&P 500. Despite Heebner’s recent slump, Wedgewood Investors president Dennis Marin told Bloomberg, “Over the next three to five years our bet is that we will do well with him.” Meanwhile, fund of funds manager Ronald Sugameli noted that losses since 2008, “don’t indicate Heebner has lost his talent or expertise.”
A look at CGM’s top-15 U.S.-listed equity holdings from across all its funds at the end of the first quarter offers some clues as to how Heebner might return to his past winning ways. Heebner, who is known for a high turnover rate compared to most mutual fund managers, added numerous new bets early in 2010.
Coal miner Alpha Natural Resources (ANR), diversified natural resources firm BHP Billiton (BHP), and iron ore and metallurgical coal play Cliffs Natural Resources (CLF) were among CGM’s new commodity bets at the end of Q1. Meanwhile, Heebner was slightly trimming stakes in Southern Copper (SCCO) and Freeport-McMoRan (FCX) while leaving the fund’s Teck Resources (TCK) bet unchanged from the end of 2009.
Elsewhere in the portfolio, Heebner was upping existing bets on tech giant Apple (AAPL) and heavy-duty diesel engine producer Cummins (CMI) while paring positions in automaker Ford Motor (F) and investment firms Goldman Sachs Group (GS) and Morgan Stanley (MS) during the first quarter.