Jeremy Grantham (Trades, Portfolio), the legendary investor and owner of the Boston-based firm Grantham Mayo Van Otterloo, committed one-third of his portfolio of $16 billion stocks to a specific group of quality companies.
Just like many other gurus, Grantham has significant positions in high-performing companies like Apple (AAPL, Financial), Microsoft Corp. (MSFT, Financial), UnitedHealth (UNH, Financial) and Alphabet Inc. (GOOGL, Financial). The stocks of those companies represented more than 13% of Grantham’s top holdings, according to the most recent public filings from the early months of the year.
But his investments in other companies aren’t as widely known. These included key positions in Oracle Corp. (ORCL, Financial), Johnson & Johnson (JNJ, Financial), Accenture PLC (ACN, Financial), Medtronic PLC (MDT, Financial) and Cognizant Technology Solutions Corp. (CTSH, Financial)
Of Grantham’s portfolio as a whole, the majority of its 567 stocks, or more than 35%, are invested in the technology industry. A total of 19% of the portfolio is invested in health care. Financial services, consumer cyclical and consumer defensive make up the other major industries that are represented in Grantham’s portfolio.
The guru is worth our attention as he has proven himself to be quite a forecaster of disasters. While he may not have a crystal ball, he has enjoyed a long career of steering clients’ assets clear of impending crashes. He also has been able to correctly identify speculative market "bubbles" as they were happening. The guru, for example, avoided investing in Japanese equities and real estate in the late '80s, as well as technology stocks during the internet bubble in the late '90s.
Here’s a look at his top holdings:
Oracle Corp.
Computer software provider Oracle Corp. has a market cap of $193.48 billion; its shares were traded about $49 with a price-earnings ratio of 56 and a price-sales ratio of 5.13. The company had an annual average earnings growth rate of 8% over the last 10 years. GuruFocus gave Oracle a 2-star business predictability rank.
Johnson & Johnson
The world’s largest and most diverse health care company Johnson & Johnson has a market cap of $350 billion; its shares were traded around $131 with a price-earnings ratio of 297.20 and a price-sales ratio of 4.43. The company had an annual average earnings growth rate of 3.9% over the last 10 years. GuruFocus gave Johnson & Johnson a 2-star business predictability rank.
Accenture PLC
Accenture, a leading provider of management consulting and technology services, has a market cap of $103 billion; its shares were traded around $160 with a price-earnings ratio of 25 and a price-sales ratio of 2.6. The company had an annual average earnings growth rate of 10% over the last 10 years. GuruFocus gave Accenture a 4.5-star business predictability rank.
Medtronic PLC
Medtronic, one of the largest medical device companies in the world, has a market cap of $122 billion; its shares were traded around $91 with a price-earnings ratio of 40 and a price-sales ratio of 4.13. The company had an annual average earnings growth rate of 6.9% over the last 10 years. GuruFocus gave Medtronic a 4-star business predictability rank.
Cognizant Technology Solutions
Cognizant Technology Solutions, a provider of IT consulting services, has a market cap of $44 billion; its shares were traded around $75.87 with a price-earnings ratio of 30.6 and a price-sales ratio of 2.89. The company had an annual average earnings growth rate of 21.9% over the last 10 years. GuruFocus gave Cognizant a 4-star business predictability rank.
