Navellier Makes Three Big New Bets

BOSTON (TheStreet) -- The $2.5 billion Navellier hedge fund made three big new purchases in the second quarter in disparate industries.

It bought $38 million of shares in health insurer UnitedHealth Group ( UNH), creating a 1.5% portfolio stake, $32 million of preferred shares of beer maker AmBev ( ABV), resulting in a 1.3% portfolio stake, and $31 million of the shares of cigarette maker Reynolds American ( RAI), making it a 1.3% portfolio position.

UnitedHealth provides health insurance and related services to more than 77 million Americans. Its shares are up 25% this year and 41% over the past 12 months. In contrast, the S&P 500 Index is down 5% this year but up 11% over the past 12 months.

AmBev is the largest brewer in Latin America by sales volume and the fourth-largest beer producer in the world. Its shares are up 2% this year, and 63% over the past 12 months.

Reynolds American is the second-largest U.S. cigarette manufacturer. Its brands include Camel, Kool and Pall Mall. Its shares are up 7.8% this year and 27% over the past 12 months.

The hedge fund run by Louis Navellier kept its top 10 holdings relatively untouched in the second quarter. The fund holds 294 stocks.

Although hedge funds don't typically disclose their returns to the public, you can bet Navellier's clients are pleased, as his two largest holdings are each up about 50% this year.

Chipotle Mexican Grill ( CMG), a "fast-casual" restaurant chain, remains the top holding at just under 3% of the fund. It had a value of $74 million at June 30 thanks to a 49% rise in its share price this year and a 117% return over the past 12 months.

Chipotle is also popular with big mutual fund investors as Fidelity funds own a combined 13% of its shares and T. Rowe Price holds 10%.

The second-largest holding is Baidu ( BIDU), the leading Chinese-language Internet-search provider, at 2.7% of the fund. Its shares are up 55% this year and 82% over the past 12 months. At the end of July, Baidu reported that its second-quarter earnings jumped 95% to 72 cents per share.

Salesforce.com ( CRM) is the third-largest holding at 2.7% of the portfolio, and is up 1.6% this year and 38% over the past 12 months. The company is a provider of hosted customer relationship management software services.

Other top holdings include AutoZone ( AZO), a car parts and accessories store chain, the computer industry giant International Business Machines ( IBM), the offshore IT-services firm Cognizant Technology ( CTSH) and cosmetics company Estee Lauder ( EL). Their weightings remain relatively unchanged from the first quarter.

The fund closed out two positions in the second quarter, selling its $40 million stake in computer-chip maker Broadcom ( BRCM) and a $13 million position in an iShares Barclays bond fund.

Hedge funds that manage more than $100 million are required to disclose their equity holdings, options and convertible debt on a Form 13F filed to the Securities and Exchange Commission within 45 days of the end of a quarter. Funds aren't required to report short positions betting on declines.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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