There are a wide variety of screeners on the GuruFocus site. Some of them apply general preset criteria to our All-in-One screener, allowing users to customize them, while others are based on a more well-defined strategy. Some even have model portfolios based on them, in which GuruFocus has tracked the performance of the screenerâs top 25 stocks over the years.
In this series, I will be highlighting some of the most popular GuruFocus screeners. These are the screeners that many find to be particularly useful in searching the markets for potential investment opportunities. Each of them has their own uses depending on the criteria they look at, but they can all provide a good starting point for further research.
The Aggregated Portfolio of Gurus
You wonât find the Aggregated Portfolio of Gurus in the âScreenersâ tab. Instead, it is located under the âGurusâ tab, since it compiles the stocks that are the most owned among the portfolios of the investing Gurus.
In the Aggregated Portfolio, users can sort stocks based on the following criteria:
- Highest number of guru owners.
- Number of guru buys in the most recent quarter.
- Highest combined weightings in guru portfolios.
You could sort by any of the other categories as well, such as price or market cap, but the three listed above are the ones that are useful in seeing which stocks are the most popular guru holdings.
The number of guru owners refers to the number of gurus that have that stock in their portfolio, regardless of its weighting. The number of guru buys in the most recent quarter tells which stocks have been popular buys among gurus recently, and looking at the category directly to the right of this one, we can see how many Gurus have been selling that same stock. Meanwhile, the combined weighting refers to the combination of what percentages of their portfolios gurus have dedicated to the stock.
Uses and pitfalls
The Aggregated Portfolio is useful for seeing which stocks gurus agree on. If two heads are better than one, then a high number of gurus being willing to dedicate a portion of their portfolios to a stock is better than one or even a handful.
Sorting by the number of guru buys gives equal weight to the stance of each guru that makes up the Aggregated Portfolio. This means that smaller funds are not drowned out by juggernauts that have equity portfolios worth hundreds of billions. However, the drawback is that it does not account for what percentage of gurusâ holdings each of the stocks accounts for.
This is where the combined weightings comes in. If Guru A has a $50 billion fund and gives Company Y a 2% portfolio weight, while Guru B has a $2 billion fund and gives Company Y a 5% portfolio weight, then the combined weighting of Company Y in these portfolios would be 7%. The downside of sorting by combined weighting is that even if there are only a small number of gurus that own the stock, it might still appear at the top if each of them give it, say, a 50% portfolio weight.
Model portfolio
GuruFocusâ Most Broadly Held model portfolio is based on the Aggregated Portfolio of Gurus. It consists of the 25 stocks that have the highest number of guru owners. In cases where more than one stock has the same number of guru owners, the stock that has higher weightings in the portfolios will be ranked higher. The model portfolios are rebalanced annually on the first trading day of the year, and the stocks are given equal weighting in the portfolio.
Below is a chart comparing the performance of the Most Broadly Held model portfolio to the S&P 500. After a lackluster start where the model portfolio roughly mirrored the S&P 500, it began outperforming in 2009, and it has significantly beaten the S&P 500 since inception. As of July 2021, the model portfolio has returned a cumulative 506.30% since its inception on Dec. 30, 2005. Over the same period, the S&P 500 has gained only 254.27%.
Based on the history of this model portfolio, the stocks in it seem to greatly outperform the broader market on average. This makes sense when we consider than the Most Broadly Held model portfolio is basically a popularity contest for which stocks fund managers are more willing to buy shares of. In other words, these are the stocks that the highest number of investing gurus are bullish on. Moreover, popularity can become a self-fulfilling prophecy. If more gurus are buying shares of a stock, the share price is more likely to go up due to the inflow of funds. Also, the more a company grows, the more shares it will have for gurus and index funds alike to buy.
