Bloomberg News

Heebner Buys Philip Morris, Bank of America, Sells Apple Shares

February 14, 2012

Feb. 14 (Bloomberg) -- Kenneth Heebner, who ran one of the top-performing U.S. stock mutual funds during the past decade, bought shares of Philip Morris International Inc. and Bank of America Corp., while selling Apple Inc. in the fourth quarter.

Capital Growth Management LP purchased 1.73 million shares of Philip Morris, the world’s largest publicly traded tobacco manufacturer, during the three-month period that ended Dec. 31, according to a filing with the U.S. Securities and Exchange Commission today. The Boston-based money manager bought 22.1 million shares of Bank of America, the second-largest U.S. bank by assets. The firm sold all 406,000 shares of Apple Inc., the world’s largest technology company, during the fourth quarter.

Heebner’s CGM Focus Fund has beaten 99 percent of peers in 2012. The fund returned 16 percent annually in the decade ended in January 2011 for the best record among more than 3,500 diversified U.S. stock funds, according to data compiled by Morningstar Inc. It then lost 15 percent in the past year, data compiled by Bloomberg show. His performance has stalled in the past five years, trailing 92 percent of peers, according to data compiled by Bloomberg.

Philip Morris of New York has since risen to the highest level since its spinoff from Altria Group Inc., climbing to $81.61 a share yesterday. Charlotte, North Carolina-based Bank of America has surged 43 percent in 2012, the fifth-biggest gain in the Standard & Poor’s 500 Index, after posting the fourth- largest loss last year and falling to an almost three-year low in December. Apple surged to a record $502.60 yesterday and is set to have its best quarter since 2009.

Financial-Company Holdings

The Capital Growth filing showed the firm increased its holdings of financial companies to 49 percent of assets, up 7.2 percentage points from the third quarter, according to data compiled by Bloomberg. The biggest stakes in that industry by market value were in Citigroup Inc., Simon Property Group Inc. and Morgan Stanley, the document showed.

Consumer discretionary stocks were the second-biggest group in the firm’s portfolio, accounting for 17 percent of the fund. That’s down 10 percentage points from the prior period. Priceline.com Inc. and Ford Motor Co. were the largest holdings in the group. Heebner sold all shares of Tiffany & Co., the world’s second-largest luxury jewelry retailer, clothing retailer Ralph Lauren Corp. and Amazon.com Inc., the world’s largest Internet retailer.

--Editors: Joanna Ossinger, Nick Baker

To contact the reporter on this story: Inyoung Hwang in New York at ihwang7@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net


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