In their Large Cap model, manager Gator Capital Management invests in 30 large cap companies. They use fundamental research to determine which companies to add to the model and review earnings releases and conference calls to help narrow the choices down. They also talk to company managers to clarify any questions they have. If the company goes through a major change, such as a merger or CEO change, then Gator Capital will consider selling the position.
The top holding in the model is Liberty Media Corporation (NASDAQ: LINTA), a distributor of television programming for channels like Discovery Channel, USA and STARZ. LINTA’s net revenues grew from $7.8 billion in 2007 to $8.1 billion in 2008, then to $8.3 billion in 2009. Over the past few years, the company’s total liabilities have been dropping steadily—falling from $11.7 billion in 2007 to $11 billion in 2008 and finally to $10.4 billion in 2009. Their price to earnings ratio is lower than many of their competitors.
Another top holding in the model is Wells Fargo & Company (NYSE: WFC). WFC’s net revenues dropped from $35.2 billion in 2007 to $34.9 billion in 2008, but then grew to $56.3 billion in 2009. And while their total liabilities grew from $527.8 billion in 2007 to $1.2 trillion in 2008, they dropped to $1.1 trillion in 2009. The company’s outstanding shares increased from 4.2 billion in 2008 to 5.2 billion in 2009.
Taking the third spot in top holdings in the Large Cap model is Oracle Corp (NASDAQ: ORCL). ORCL’s net revenues grew from $23.3 billion in 2009 to $26.8 billion in 2010. Their total liabilities also increased over this time period, from $22.2 billion in 2009 to $29.1 billion in 2010. Outstanding shares have remained at 5 million since 2009, and their price to earnings ratio is higher than many of their peers.
