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What Hedge Fund Gurus Are Buying
Posted by: Holly LaFon (IP Logged)
Date: November 29, 2011 05:30PM

It’s possible to see where all GuruFocus Gurus are currently finding value, with just a few clicks. GuruFocus’ S&P 500 Grid maps out all public companies by different categories, and lets you see what kind of Gurus are buying and selling them, most or least.

Right now of (as shown below), GuruFocus' Hedge Fund Gurus are buying Google (GOOG) — more than 30% of them have nabbed the search engine giant as it trades near historical low P/E and P/B ratios and reports record profits. Gurus have also poured money into NewsCorp (NWSA), Apple (AAPL) and Cognizant Technology Solutions Corp. (CTSH).

Clicking onto the “Own” category, you can see that while Apple was the third most-purchased stock, it is the stock most hedge fund Gurus continue to own. Thirty-three percent of hedge fund gurus have this tech stock in their portfolios, even as the price has advanced 18% in the last year.

Interestingly, Citigroup (C), the second most-owned stock of hedge fund Gurus, clicking on the “Sell” category shows it is also their top most-sold stock. El Paso Corp. is the third largest, while Google and News Corp. also rank high, rounding out the top five companies.

Hedge fund Gurus are sitting on financial and tech stocks, the two categories that dominated the top 20 most-owned stocks list. It contained six financial stocks and five bank stocks. A glimpse at the most purchased stocks shows that the most Gurus are trending to tech stocks — 6 of the top 20 most-bought companies were from that sector. Four financial stocks made the top 20.

Of the most bought non-S&P 500 stocks (as shown below), the most hedge funds found BP Plc ADS (BP) attractive — almost 20%. The share price of BP has dropped more than 30% since it was involved in the worst marine oil spill in history in 2010. The company’s revenue levels seem to be returning to normal as its trailing 12-month revenue has reached $373 billion, though free cash flow is still scant at $4 billion. Citigroup Inc. estimates that BP’s legal proceedings will conclude sometime in 2014.

Mutual Fund Gurus are moving other directions. They love Berkshire Hathaway B Shares — it is the most held stock as well as the second most purchased. The chart shows a trend toward greater accumulation of Johnson & Johnson (JNJ) and Microsoft (MSFT), as each were purchased by seven new Gurus.

Are you looking for stocks in the small or micro-cap universe? Changing the category under “Stocks of Interest” can produce a table of small and extra-small companies that caught the eye of big investors (as shown below). Seven Gurus bought Federated Investors Inc. (FII), and investment management and financial services company with a $1.6 billion market cap. Five Gurus own Amedisys Inc. (AMED), the most owned and most-bought of micro caps, a home care nursing services company with a $286 million market cap and almost 30% five-year earnings growth.

The S&P 500 Grid has many other options for screening stocks according to who is buying, selling or holding them. Continue your research here.

Stocks Discussed: GOOG, CTSH, C, AAPL, NWSA, C, BP, BRK.B, MSFT, JNJ, FII, AMED,
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