Fisher Investments, the firm led by Ken Fisher (Trades, Portfolio), disclosed in a regulatory filing that its top trades during the third quarter included reductions to its holdings of Tencent Holdings Ltd. (TCEHY, Financial) and Alibaba Group Holding Ltd. (BABA, Financial), a new position in Charles Schwab Corp. (SCHW, Financial) and boosts to its investments in Walmart Inc. (WMT, Financial), Blackrock Corp. (BLK, Financial) and Starbucks Corp. (SBUX, Financial).
The son of Phil Fisher wrote several finance books, including the 1984 Dow Jones bestseller “Super Stocks.” Fisher’s firm invests based on the idea that supply and demand of securities solely determines the price of securities and that all widely known information has been priced into the market. The Camas, Washington-based firm seeks to add value by identifying information that is not widely known or interpreting the information differently than other market participants do.
As of September, the firm’s $133.38 billion 13F equity portfolio contains 1,028 stocks, with 103 new positions and a quarterly turnover ratio of 13%. The top four sectors in terms of weight are technology, financial services, consumer cyclical and health care, representing 26.37%, 12.61%, 11.33% and 10.26% of the equity portfolio.
Investors should be aware 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but the reports can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
Tencent
Fisher sold 39,398,939 shares of Tencent (TCEHY, Financial), slicing 98.81% of the position and 1.26% of its equity portfolio.
Shares of Tencent averaged $39.71 during the third quarter; the stock is significantly undervalued based on its price-to-GF Value ratio of 0.44 as of Thursday.
The Shenzhen, Guangdong-based social media giant has a GF Score of 89 out of 100, driven by a rank of 10 out of 10 for profitability and growth despite financial strength ranking 7 out of 10, GF Value ranking 4 out of 10 and momentum ranking 3 out of 10.
Tencent’s profitability ranks 10 out of 10 on several positive investing signs, which include a five-star business predictability rank and a net profit margin that outperforms more than 90% of global competitors.
Gurus with holdings in Tencent’s Hong Kong-listed shares (HKSE:00700, Financial) include Matthews Pacific Tiger Fund (Trades, Portfolio) and Tweedy Browne (Trades, Portfolio) International Value.
Alibaba
Fisher sold 10,316,884 shares of Alibaba (BABA, Financial), chopping 71.25% of the position and 0.83% of its equity portfolio.
Shares of Alibaba averaged $95.27 during the third quarter; the stock is significantly undervalued based on its price-to-GF Value ratio of 0.21 as of Thursday.
The Hangzhou, Zhejiang-based e-commerce giant has a GF Score of 69 out of 100 based on a growth rank of 10 out of 10, a profitability rank of 9 out of 10, a financial strength rank of 7 out of 10 and a GF Value rank of 2 out of 10. However, the stock does not have enough data to compute a momentum rank and thus, the GF Score may give an incomplete picture of the company’s potential.
Other gurus with holdings in Alibaba include David Herro (Trades, Portfolio)’s Oakmark International Fund, PRIMECAP Management (Trades, Portfolio) and Dodge & Cox.
Charles Schwab
The firm invested in 15,433,332 shares of Charles Schwab (SCHW, Financial), giving the position 0.83% equity portfolio weight.
Shares of Charles Schwab averaged $69.43 during the third quarter; the stock is modestly overvalued based on its price-to-GF Value ratio of 1.13.
The Westlake, Texas-based brokerage service has a GF Score of 80 out of 100 based on a momentum rank of 9 out of 10, a growth rank of 8 out of 10, a profitability rank of 7 out of 10, a financial strength rank of 4 out of 10 and a GF Value rank of 3 out of 10.
Walmart
The firm added 7,627,286 shares of Walmart (WMT, Financial), expanding the position by 1,519.21% and its equity portfolio by 0.74%.
Shares of Walmart averaged $131.42 during the third quarter; the stock is fairly valued based on its price-to-GF Value ratio of 0.94 as of Thursday.
The Bentonville, Arkansas-based retail giant has a GF Score of 82 out of 10 based on a profitability rank of 8 out of 10, a financial strength rank of 7 out of 10, a momentum rank of 5 out of 10 and a rank of 6 out of 10 for growth and GF Value.
Blackrock
Fisher purchased 1,521,293 shares of Blackrock (BLK, Financial), increasing the position by 753.62% and its equity portfolio by 0.63%.
Shares of Blackrock averaged $654.57 during the third quarter; the stock is fairly valued based on its price-to-GF Value ratio of 1.05 as of Thursday.
The New York-based asset management company has a GF Score of 94 out of 100 based on a growth rank of 10 out of 10, a profitability rank of 9 out of 10, a momentum rank of 8 out of 10 and a rank of 6 out of 10 for financial strength and GF Value.
Starbucks
The firm added 9,568,965 shares of Starbucks (SBUX, Financial), giving the stake 0.61% equity portfolio weight.
Shares of Starbucks averaged $84.95 during the third quarter; the stock is modestly undervalued based on its price-to-GF Value ratio of 0.83.
The Seattle-based coffee giant has a GF Score of 90 out of 100, driven by a growth rank of 8 out of 10 and a rank of 9 out of 10 for profitability, GF Value and momentum despite financial strength ranking just 4 out of 10.
