Cracking the Billionaire Code - Three ETFs

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If a stock name sounds more like spy code, is difficult to read and even harder to say, you may be in the mysterious dimension of exchange traded funds where those who know know and those who don't never will. The typical lack of information about exchange traded funds does not deter the billionaire investors from buying these shares. In fact, Guru Ray Dalio holds more than 80 million shares of EEM, comprising 27.3%% of his total managed assets.

Last week GuruFocus covered PowerShares QQQ Trust, Series 1 ETF ( QQQ ), iPath S&P 500 VIX Short Term Futures TM ( VXX ) and iShares FTSE/Xinhua China 25 Index ETF ( FXI ). Read the full story here . This week we are sleuthing three more of the top ten exchange traded funds, including Market Vectors ETF Trust ( GDX ), iShares MSCI Emerging Markets Indx ETF ( EEM ) and iShares Russell 2000 Index ETF ( IWM ).

Meanwhile, the ETF detective works diligently to crack the billionaire code and solve mysteries like why gurus would hold ETFs for five years of solid losses. Case in point: Jean-Marie Eveillard has held GDX since the third quarter of 2008, posting double-digit losses in every quarter since.

iShares MSCI Emerging Markets Indx ETF ( EEM )


Tracking EEM's historical price and P/E range:



Guru Action: As of June 30, 2013, there are 15 guru stakeholders holding EEM and no insider activity found.

The top Guru stakeholder is Ray Dalio who increased his position by 21.8% in the second quarter, buying 14,516,289 shares at an average price of $41.48 per share, for a gain of 1.5%. His current shares of 81,119,678 represent 8.25% of shares outstanding or 27.3%% of his total managed assets.

His five-year trading history shows a gain of 1% on 81,670,278 shares at an average price of $41.79 per share; he had a loss of 9% selling 550,600 shares at an average price of $46.47 per share.

Market Vectors ETF Trust ( GDX )

Down 55% over 12 months, GDX has a market cap of $357 million. The current share price is around $24.19. Shares trade with a P/B of 4.60. The EV-to-EBIT ratio is 12.

The dividend yield is 3.10%.

Track share pricing since year 2006:



Guru Action: As of June 30, 2013, there are four guru stakeholders holding GDX and fairly recent insider buys.

The top Guru stakeholder is David Einhorn who increased his position by 46.49% in the second quarter, buying 2,791,925 shares at an average price of $29.19 per share, for a loss of 17.1%. His current shares of 8,796,896 represent 4% of his total managed assets.

His trading history of six quarters shows double-digit losses in every quarter. He lost 42% on10,673,525 shares at an average price of $41.40 per share; he also lost 48% on1,876,629 shares sold at an average price of $46.80 per share

iShares Russell 2000 Index ETF ( IWM )

Up 28% over 12 months, IWM has a market cap of $19.09 billion. The current share price is around $107.02. IWM has an EV-to-EBIT ratio of 17.2.

The dividend yield is 1.60%.

Warnings: The GuruFocus checkup on the financials and performances concluded that there is not enough data about the ETF and that its interest coverage is extremely low.

Tracking historical share pricing and P/E range:



Guru Action: As of June 30, 2013, there are 12 guru stakeholders holding IWM and no insiders found.

Led by Louis Moore Bacon, the top five Guru stakeholders have placed puts on their holdings.

Louis Moore Bacon's current shares are 2,637,500 or 1.38% of shares outstanding. His IWM holding represents 6.1% of his total assets managed. In his five-year history, he gained 18% buying 4,999,000 shares at an average price of $90.33 per share. He gained 13% on 4,894,000 shares sold at an average price of $94.88 per share.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

Referenced Stocks: EEM , FXI , GDX , IWM , QQQ

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