Covestor model manager Harsh Nahar takes a bottom up approach to identifying appropriate investments for his Bottom Up Concentrated model. He also looks for positions with price movements created by short-term irrationalities.
The top holding in this model is Citigroup Inc (NYSE: C). In 2009, C’s net revenues increased to $111 billion, up from the prior year’s $105.8 billion. In the same year, their total liabilities (the majority of which are long-term) reduced to $1.7 trillion from $1.8 trillion the year before. Their outstanding common shares increased substantially in 2009, going from 5.5 billion outstanding shares in 2008 to 28.5 billion in 2009. In light of new banking and credit card regulations, and the potential for lost profits as a result of the regulations, Citigroup has recently created new account choices for consumers that will help raise maintenance fees.
Another holding in the model is BlackRock Inc (NYSE: BLK), an asset management firm. While their net revenues fell in 2009 to $4.7 billion from $5.1 billion in 2008, their earnings per share increased to $6.11 from $5.91. Their total liabilities grew tremendously going from $7.4 billion in 2008 to $153.4 billion in 2009 but their overall net income increased from $786 million in 2008 to $897 million in 2009. The company has its own investment system, called Aladdin®, which provides proprietary and comprehensive risk reports and derivative calculators to clients.
Another top holding in the Bottom Up Concentrated portfolio is tobacco company Philip Morris International Inc (NYSE: PM). In 2009, the company’s net revenues fell to $25 billion dropping from $27 billion the previous year. Their earnings per share dropped from $3.32 in 2008 to $3.24 in 2009 and their total liabilities increased to $28.4 billion from $25.5 billion the year before. In recent years, the company has turned some of its attentions toward developing smokeless products.
