A star stockpicker you won’t have heard of

Where are the canniest US stockpickers to be found? Is it Wall Street? Obscure London-based quantitative hedge funds? The world of investment trusts, perhaps?

I’m willing to bet that no one has ever considered the board of the UK’s Competition and Markets Authority (CMA). Its members, while well-known in the City, don’t typically feature in the ranks of best-buy fund lists. And while plenty of shareholders would like to know what companies they are scrutinising, few would seek them out for their investing advice.  

But recently, after noodling around the watchdog’s website, I came across the board’s register of interests, which are disclosed to identify conflicts of interest and uphold the CMA’s appearance of impartiality.

Aside from a few scattered holdings and family interests in UK banks, only one member – non-executive director Cynthia Dubin – has an equity portfolio of note.

The US-dominated list of stocks consists of medical device maker Abbott Laboratories (US:ABT), the tech giants Alphabet (US:GOOG), Amazon (US:AMZN), Apple (US:AAPL), Meta (US:META) and Microsoft (US:MSFT), former and current board-room employers Hurco (US:HURC), Babcock and Wilcox (US:BW), Edison International (US:EIX) and Intercontinental Exchange (US:ICE), cyber security firms Check Point Software (US:CHKP) and Palo Alto Networks (US:PANW), and US blue-chips Berkshire Hathaway (US:BRK.B), JP Morgan (US:JPM) and Walmart (US:WMT).

Helpfully, I was also able to find an archived snapshot of the register from two years ago. That disclosure also detailed positions in Twitter, which was in the process of being acquired, and Franchise Group, where Dubin served as a director until its takeover in August 2023. Other than that, little has changed.

Because the CMA’s register rules only extend to economic exposure, we can’t infer too much at the portfolio level. There’s nothing about the reinvestment of dividends, the precise timing of trades, or absolute and relative holding sizes, although we do know from US regulatory filings that Dubin has steadily built up a $0.32mn holding in Hurco since joining its board in 2019.

But there are a few things we can pick up from Dubin’s investments.

The first is that she appears to be a patient investor. Assuming her holdings remained largely consistent in the year to November 2022, the broad sell-off in US stocks means Dubin probably saw price falls of 25 per cent or more in just under half her stocks. And yet at the nadir, she stuck to her guns.

Second, while Dubin appears to take a long-term approach to her holdings, her disposal of GE Aerospace (US:GE) between April and July this year shows she is open to banking gains. After years in the doldrums, the engineering giant more than tripled in value in short order. Selling into momentum is hard to do, but Dubin appears to have nailed the timing of her one big exit.

Third, and interestingly for a board member of the UK’s competition watchdog, she has stayed keen on a sector that has been firmly in the crosshairs of US and EU antitrust officials in recent years. Under Federal Trade Commission chair Lina Khan – a long-time critic of monopolistic or dubious pricing practices in the tech sector – Meta, Microsoft, Apple and Amazon have all faced legal action. Apparently undeterred by break-up threats, Dubin has held on.

So familiar are the names within Dubin’s portfolio that it’s tempting to see them as standard bets on America’s largest, most powerful listed companies. This would be a misreading. As every investor finds out soon enough, concentration and conviction are incredibly hard to get right. Indeed, it appears few (if any) professional investors have managed to do it as well as Dubin over two years.

That’s because her average holding has trounced both the S&P 500 and every US growth-focused active fund manager in Citywire’s database over that time, despite zero exposure to Nvidia (US:NVDA). If we ignore companies on whose board she has served – and where a degree of share ownership might be compelled – then her picks have done even better, doubling in value on average.

Anyone looking to keep tabs on her portfolio can follow along here.