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Stocks the Most Hedge Fund Gurus Bought in Q1

Holly LaFon

Holly LaFon

255 followers
Several stocks garnered a lot of hedge fund activity in the first quarter. The stocks the most hedge fund gurus bought were Apple (AAPL), Google (GOOG), Intel Inc. (INTC), Qualcomm (QCOM) and Verisign (VRSN).

Apple (AAPL) was the most-desired stock among GuruFocus gurus in the first quarter – five of them initiated positions, and another seven added to their preexisting stakes. The most avid new buyer of Apple was Daniel Loeb, who bought 362,000 shares in the first quarter. David Tepper added the most to his Apple stake, increasing it by 276.7%, or 503,150 shares, and ending the quarter with 685,000 shares.

Apple Computer Inc. has a market cap of $494.51 billion; its shares were traded at around $555.94 with a P/E ratio of 12.9 and P/S ratio of 4.6. Apple had an annual average earnings growth of 63.5% over the past five years.

In the last five years, Apple’s stock has increased over 66%. The company maintained its leading market share in the mobile PC sector market in the first quarter, according to research from NPD Group. During the period, iPad sales captured 22.5% of the mobile PC market share, due to iPad sales, beating its next competitor Hewlett-Packard (HPQ), which still leads in the notebook and mini-notebook segment at 16.2% of the market. Apple still maintains 62.8% of the market share for tablets, and nearly doubled its tablet shipments to 13.6 million units.

On April 24, Apple issued third-quarter guidance below analysts’ estimates. The company expects revenue of about $34 billion and diluted EPS of $8.68. Analysts were expecting revenue of $37 billion and EPS of $9.93, according to Thomson Reuters.

Four hedge fund gurus bought Google (GOOG) in the first quarter, and five added it. Andreas Halvorsen was the biggest new buyer, purchasing 1,053,400 shares.

Google is a public and profitable company focused on search services. Google has a market cap of $195.74 billion; its shares were traded at around $597.32 with a P/E ratio of 18.2 and P/S ratio of 5.2. Google had an annual average earnings growth of 51.9% over the past 10 years. GuruFocus rated Google the business predictability rank of 2.5-star.

In the last year, Google’s stock has increased 14.6%. On Monday, it was reported that the company received approval from the Chinese government to purchase Motorola Mobility for $12.5 billion, or $40 per share. On Tuesday, it closed the deal. The acquisition will help its smartphone and mobile devices business, as t will come with 17,000 Motorola mobility patents. “Our aim is simple: to focus Motorola Mobility’s remarkable talent on fewer, bigger bets, and create wonderful devices that are used by people around the world,” said Dennis Woodside, Google’s newly appointed CEO of Motorola Mobility.

The third most sought-after stock was Intel Corp. (INTC), one of the world's largest semiconductor chip makers. Four gurus bought the stock in the first quarter, and two added to their holdings. The largest new position was by Ray Dalio, who purchased 239,453 shares. Michael Price added the most, increasing his stake by 2050%, or 1,025,000 shares. At quarter-end he owned a total of 1,075,000 shares.

Intel Corp has a market cap of $130.25 billion; its shares were traded at around $25.79 with a P/S ratio of 2.4. The dividend yield of Intel Corp stocks is 3.2%. Intel Corp had an annual average earnings growth of 12.7% over the past 10 years.

Value investors have been attracted to Intel for its proven, profitable business and low valuation. The company’s revenue grew 26% from 2010 to 2011, and free cash flow was $10.2 billion in 2011. Earnings reached a record $12.9 billion in 2011, up from $11.7 billion in 2010. Yet, Intel’s P/E ratio remains quite low at 10.8:

INTC pe Interactive Chart



Intel also has a 3.2% dividend yield.

Four hedge fund gurus bought new stakes in Qualcomm (QCOM); four added to their stakes. The largest new buy was from David Tepper, who picked up 1,513,486 shares. Primecap Management added the most shares, buying 2,257,261 shares, for a quarter-end total holding of 18,704,725 shares.

Qualcomm develops and delivers innovative digital wireless communications products and services based on the company's CDMA digital technology. Qualcomm has a market cap of $94.69 billion; its shares were traded at around $57.91 with a P/E ratio of 18.3 and P/S ratio of 6.3. The dividend yield of Qualcomm Inc stocks is 1.5%. Qualcomm had an annual average earnings growth of 18.2% over the past 10 years. GuruFocus rated Qualcomm the business predictability rank of 3.5-star.

Qualcomm’s revenue increased 30.3% in the last 12 months, and revenue increased to $15 billion in 2011 from $11 billion in 2010. The company also generated $4.3 billion in free cash flow in 2011, its second-highest level of the decade. Qualcomm has increased its cash holdings to $15.1 billion, its highest level in the last decade, with long-term liabilities of $9.5 billion and no long-term debt.

The dividend yield of Qualcomm is 1.5%.

Qualcomm provides 28nm chips used in Apple’s iPhone and parts of Windows 8-based laptop and tablets. In January 2012, it acquired its own smartphone and tablet display startup. At least one report says predicts that smartphone growth will double by 2015.

See more of the stocks the most gurus bought and sold here.


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