William P. Jones is founder of William Jones & Associates, which manages $3.6 billion in client assets. Jones graduated from Harvard University in 1973. He founded WJ&A fifteen years later. Prior to forming WJ&A, Jones was a Director and Senior Portfolio Manager at Mackay-Shields Associates. Before that, Jones worked as a Vice President and Trust Officer at Chase Manhattan Bank from 1980 until 1982.
WJ&A has a conservative investment strategy, which focuses on long-term growth of client capital through proper asset allocation. WJ&A has 10 portfolio managers, each averaging 26 years of investment experience in bonds, equities and hedge funds.
According to 13F filings, WJ&A had 249 securities worth $1.69 billion in its 13F portfolio as of December 31, 2010. We noticed that Jones has been holding more than half of these securities for at least five years. In the last quarter of 2010, he sold 16 securities and bought 40 new securities. Here are the 10 largest new stock picks:
Top 10 New Holdings | ||
Stock | Value in Millions (USD) | Return |
CME GROUP INC COM (CME) | 24.1 | -4.04% |
MFA FINANCIAL INC COM (MFA) | 21.2 | 2.94% |
GENESEE & WYO INC CL A (GWR) | 11.1 | 0.19% |
FREEPORT-MCMORAN COPPER AND GO (FCX) | 3.3 | -10.50% |
SPDR KBW REGIONAL BANKING ETF (KRE) | 2.7 | 2.68% |
SHENGKAI INNOVATIONS INC COM (VALV) | 2.0 | 0.30% |
PENN WEST ENERGY TRUST (PWE) | 1.1 | 11.96% |
WINDSTREAM CORP COM (WIN) | 1.1 | -5.38% |
INERGY L P UNIT LTD PTNR (NRGY) | 1.0 | 7.78% |
PETROLEO BRASILERO SA PETROBRA (PBR) | 0.9 | -4.23% |
Value Weighted Return of Top 10 New Holdings | 68.5 | -0.7% |
Value Weighted Return of New Holdings | 78.1 | 0.0% |
5.85% | ||
Only two of Jones’ top 10 new positions managed to beat the market. Except for PWE and NRGY, all of these companies have underperformed the SPY since the end of December. His largest new stock picks lost 0.7% since the end of 2010, vs. 5.85% gain for the SPY. The value weighted average performance of his whole new stock picks was 0.0% since the end of December, underperforming the market by 5.85 percentage points.
We think it’s more appropriate to check out Jones’ 10 largest positions to understand more about its performance. Here are the results:
Top 10 Holdings | ||
Stock | Value in Millions (USD) | Return |
DOVER CORP (DOV) | 126.4 | 14.01% |
SPDR GOLD TRUST (GLD) | 65.0 | -4.61% |
ENTERPRISE PRODS PARTNERS L P (EPD) | 57.6 | 3.92% |
APPLE INC COM (AAPL) | 42.4 | 10.63% |
GOOGLE INC CL A (GOOG) | 34.2 | 5.14% |
VERIZON COMMUNICATIONS INC COM (VZ) | 29.0 | 3.03% |
MCDONALDS CORP (MCD) | 24.8 | -0.81% |
NATURAL RESOURCE PARTNERS L P (NRP) | 23.5 | 8.74% |
MICROSOFT CORP COM (MSFT) | 23.3 | -2.36% |
MAGELLAN MIDSTREAM PARTNERS (MMP) | 22.3 | 2.30% |
Value Weighted Return | 448.6 | 5.78% |
SPY | 5.85% | |
His 10 largest positions returned 5.78% since the end of December, underperforming the SPY by 0.07 percentage points. His three best performing positions are DOV, NPR, and AAPL. The biggest drag on John Williams’ recent performance is the decline in gold. Some other hedge fund managers including Daniel Loeb, John Paulson, Lee Hobson andStephen Mandel have also invested in gold. Billionaire investor Leon Cooperman sold his MCD position in the fourth quarter. Apple is one of the stocks several hedge funds own the most of. MSFT is one of the 10 largest positions in Richard Perry’s portfolio at the end of December.
Performance of Top 10 Long Term Holdings in Last Five Years | ||
Stock | Value in Millions (USD) | Return |
DOVER CORP (DOV) | 124.0 | 62.62% |
QUALCOMM INC (QCOM) | 39.0 | 32.84% |
GENERAL ELECTRIC CO (GE) | 31.3 | -22.74% |
CITIGROUP INC (C) | 29.8 | -88.14% |
THE WILLIAMS COMPANY, INC. (WMB) | 28.9 | 37.70% |
CANADIAN NATURAL RESOURCES (CNQ) | 27.4 | 67.62% |
DCP MIDSTREAM PARTNERS LP (DPM) | 27.1 | 122.14% |
CROWN CASTLE INTL CORP (CCI) | 27.0 | 47.03% |
EXXON MOBIL CORP (XOM) | 22.8 | 55.46% |
iSHARES FTSE/XINHUA CHINA 25 I (FXI) | 17.9 | 78.81% |
Average Return | N/A | 39.33% |
SPY | N/A | 5.11% |
The above table shows the performance of WJ&A’s top 10 long-term stocks in the last five years. WJ&A’s largest investment over the last five years is Dover Corporation. Dover Corporation returned almost 62.6% since February 2006, beating the market by a large margin. Had WJ&A added equal dollar amounts of each stock into its portfolio, its return would have been 39.33%. Considering SPY’s 5.11% return, WJ&A's long term picks are extremely successful. This underlines William Jones’ talent in picking long term winners.
Disclosure: I am long C, MSFT.
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