Even while under the pressure of managing $44 billion in
assets, billionaire Ken Fisher of Fisher Asset Management still
manages to throw us little guys a bone every now and again.
Unlike many of his peers in the hedge fund community, Fisher
has a history of filing his Form 13Fs to the SEC earlier than
required, typically 20 days or more in advance of the due
Why is this a big deal? His early reporting increases the
transparency and usefulness of his disclosure, helping investors
to better interpret the filing without being too many steps
This quarter was no exception, with Fisher Asset Management
releasing its second-quarter 13F just 25 days after the quarter
ended (versus the maximum 45 days allowed by law). With this
information as ripe as its going to get, I've picked apart
Fisher's positions to see where he's finding high yields.
A broader interpretation of his 13F filing shows that Fisher
is still bullish on finance and banking, with a special focus on
REITs (real estate investment trusts) for attractive yields. Here
are four of his most lucrative dividend picks.
Senior Housing Properties Trust (NYSE:
is one of the largest income producers in Fisher's portfolio,
offering the billionaire a 6.4% yield. The owner and operator of
nursing homes, retirement communities, and assisted living
complexes only amounts to about $11 million in his portfolio,
however. Perhaps that is for the best, as the stock has lost
nearly 12% looking back a year (versus the S&P 500 Index's
17% gain). Wall Street isn't currently a fan of health care REITs
it seems, with Goldman Sachs downgrading the sector earlier this
month and average analyst price targets for SNH coming in
slightly below current trading levels.
Dupont Fabros Technology (NYSE:
doesn't carry a name that screams "office REIT," but trust that
the company does in fact operate and manage wholesale data
centers under the real estate investment trust status. Fisher is
earning a 5.3% yield on DFT, as are noteworthy investment firms
like Blackrock and Fidelity. Fisher's allotment to DFT totals
around nearly four times that of SNH, or roughly $41 million. The
company recently beat earnings on July 24, helping fuel the
stock's 13% rise this year.
BioMed Realty Trust (NYSE:
is the top provider of laboratory and office space for the life
science industry, operating in the main U.S. research hubs (think
Boston, San Francisco, and so on), as well as adjacent to many
universities. Its REIT tax structure helps to bestow investors
with a respectable 4.5% yield, prompting Fisher Asset Management
to allocate nearly $43 million to the stock. BMR is currently
trading about 5% under from analyst's price targets. It is also
3% from its 52-week high, and I wouldn't be surprised if we saw
some upward revisions of those targets if it appreciates further.
Continuing to lease more space to big players like
(as BMR did late July) should support that growth.
National Retail Properties (NYSE:
possesses the lowest yield on this screen, a still-ample 4.4%.
Fisher currently holds about $42 million worth of NNN, meaning
he's holding similar stakes in DFT, BMR and NNN. The owner of
freestanding retail stores has a strong record with income
investors, escalating its annual dividends for 24 years in a row.
NNN also stands out from the pack in that it has posted a gain of
20% this year. That ramp up most likely explains the rash of
downgrades NNN received this summer from Merrill Lynch, Morgan
Stanley and Ladenburg Thalmann, hinting that the REIT will be
entering a cool-off phase soon (if it has not already).
Risks to Consider:
There are obvious drawbacks for tracking and investing based
upon 13F disclosures, even when the lag between investment and
form submission is as small as Fisher's. Because we can't see
Fisher's entire portfolio, hedging mechanisms, real assets, and
so on, investors should view Fisher's declared positions in an
educational light rather than as investing gospel.
Action to Take -->
Now worth $2.5 billion, Fisher is a forced to be reckoned with in
the investing community. While every one of his portfolio picks
may not be suitable for every investor, digging through his
portfolio while looking for income-friendly stocks like these
could reveal some excellent opportunities that might not have
been on your radar.
America's wealthiest investors have long used REITs to generate
safe, rising income. In our latest High-Yield Investing research,
we've found another little-known group of investments the wealthy
have used for decades to generate dividend yields of 12% or more.
To learn more about these special investments,