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The Most-Bought Stocks of Investing Gurus
Posted by: Holly LaFon (IP Logged)
Date: May 21, 2013 03:49PM
Last week, gurus finished reporting their portfolio updates for the first quarter, and buying activity was more concentrated among certain stocks than others. GuruFocus’ S&P 500 Screener demonstrates that the companies the most money managers GuruFocus follows bought or increased their shareholdings of are: Apple (AAPL), Microsoft (MSFT), Citigroup (C), JPMorgan (JPM) and Oracle (ORCL).
S&P 500 Screener Shot:
Oracle was purchased by two money managers GuruFocus follows in the first quarter, making it the fifth-most purchased of the S&P 500. The stock in the first quarter traded between $31.25 and $36.34. On Monday it is priced at $34.90 after gaining 4.7% year to date.
Jeremy Grantham, with 47,057,601 shares, has the largest stake, as Lou Simpson, with 5,019,659 shares, has the stock as the greatest percentage of his portfolio, at 10.2%.
A company with a $160.4 billion market cap, Oracle provides optimized and integrated hardware and software systems to its clients which include all of the Fortune 100.
Oracle in the first quarter saw a 1% decline in revenues to $8.96 billion on a U.S. currency basis, and net income was almost flat at $2.5 billion or 28% of revenues. Cash and cash equivalents also increased to $16.1 billion from $14.96 billion, and current liabilities declined to $11.9 billion from $15.34 billion.
Oracle in February merged with session border control technology company Acme Packet Inc. and acquired cloud marketing and revenue management software company Eloqua Inc. for $935 million.
Twenty-three gurus purchased or added to their holdings of JPMorgan stock in the first quarter, ranking it as the fourth most-purchased stock of the S&P 500. JPMorgan’s third quarter share price spanned $43.96 and $51, and touches a near 10-year high $52.59 per share on Tuesday.
Investor James Barrow has the largest stake in JPMorgan with almost 31 million shares, or 0.8% of the company. Mark Hillman owns 35,236 shares which is the largest percentage of a guru’s portfolio at 5.1% of his assets managed.
In the first quarter JPMorgan reported net income of $6.5 billion, an increase from $4.9 billion in the year-ago quarter, on $25.8 billion in revenue, declined slightly from $26.8 million in the year-ago quarter. Nevertheless, the firm’s capital strength and earnings power allowed it to increase its dividend to $0.38 per share from $0.30 per share, matching its highest historical level.
JPMorgan has a P/E of 9.3, a P/S ratio of 2.08 (near a three-year high) and P/B ratio of 1.0.
Twenty-three gurus also purchased Citigroup, tying it with fellow financial services company JPMorgan. The company traded within $39.56 and $47.60 in the first quarter, and at $51.60 on Tuesday.
James Barrow owns the most shares with just over 20 million, and Mohnish Pabrai has the most significant investment, with about 1.6 million shares measuring 20.3% of his assets managed.
Citigroup in the first quarter reported net income of $3.8 billion, up from $2.9 billion in the year-ago quarter, after 2012 marked its third straight year of profitability since the financial crisis. Revenue of $20.5 billion was up from $19.4 billion in the year-ago quarter. The bank promised a “challenging” year but said factors contributing to positive results included: seasonally strong markets businesses, sustained investment banking momentum, year-over-year loan and deposits growth and a more favorable credit environment.
In March, Citi agreed to pay $730 million to settle a class action lawsuit related to Citigroup debt and preferred stock purchased from 2006 to 2008, placing it closer to resolving its claims from the financial crisis period.
Citi’s dividend remains $0.01 per share, but the company approved a $1.2 billion common stock repurchase program ending in first quarter 2013, in an aim to offset share dilution due to its annual incentive compensation grants.
Citigroup has a P/E of 19.2, P/B of 0.80 and P/S of 2.18, near a five-year high.
Thirty-one gurus purchased second-place stock Microsoft in the first quarter. Its price ranged from $26.46 to $28.61 in the first quarter, and hit $35.08 on Tuesday, near its 10-year high.
The firm Dodge & Cox possesses the most shares, with more than 78 million, and Donald Yacktman has the largest weighting in the company, with 6.1% of his total assets managed invested in it.
In the first quarter Microsoft had revenue of $20.49 billion, an increase from $17.4 billion in the year-ago quarter though down slightly sequentially. Revenue increases were primarily a result of new products and services such as the Windows 8, Surface Pro and the new Office, and hampered by a decline in the x86 PC market. Net income also increased to $6.1 billion, an increase from $5.1 billion in the year-ago quarter.
Microsoft has a P/E of 17.8, P/B of 4.4 and P/S near a three-year high at 3.89.
Apple ranked as the most-purchased stock in the first quarter. Shares of the company were purchased by 37 investors gurus tracked by GuruFocus. The purchase price ranged between $420.05 and $549.03. On Tuesday, the price stands at $442.93, near a 52-week low.
Hedge fund manager David Einhorn controls the most shares with about 2.4 million, which also qualifies him as the investor with the most dominant position, at 16.2% of his total assets under management.
In the first quarter Apple posted $43.6 billion in revenue, compared to $39.2 billion in the year-ago quarter, and $9.5 billion in net profit, compared to $11.6 billion in the year-ago quarter. Revenue growth was driven by strong iPhone and iPad sales. The company ended the quarter with $145 billion in cash on its balance sheet.
In April, Apple also decided to more than double its return of capital to shareholders to $100 billion by the end of calendar year 2015, or about $30 billion per year. The program includes increasing its repurchase authorization from $10 billion to a record $60 billion, and spending roughly $1 billion annually on net-share-settle vesting restricted stock units, as well as a 15% dividend increase to $3.05 per share.
Apple has a P/E of 10.3, near its 10-year low, a P/B of 3.3 and P/S of 2.43, near its five-year low.
To see more of the stocks the most gurus bought in the first quarter of 2013, visit the S&P 500 screener. Become a Premium Member to GuruFocus here.
Guru Discussed: James Barrow: Current Portfolio, Stock Picks
Mohnish Pabrai: Current Portfolio, Stock Picks
Stocks Discussed: AAPL, MSFT, C, JPM, ORCL,