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Holly LaFon
Holly LaFon
Articles (7846) 

Guru Stock Fund Managers' Most-Bought Stocks of Q2: The Definitive List

What did the most prominent investors in the world buy in the second quarter?

August 23, 2017 | About:

Now that fund managers have submitted their second-quarter portfolios, their favorite stocks of the quarter have become apparent.

According to the S&P 500 Grid screener, out of 170 of the world’s most prominent investors, the most chose the following stocks: Microsoft (NASDAQ:MSFT), Visa (NYSE:V), Wells Fargo (NYSE:WFC), Apple (NASDAQ:AAPL) and Nike (NYSE:NKE).

Microsoft (NASDAQ:MSFT)

Twenty-one investors bought shares of Microsoft in the second quarter, with Steven Mandel making the largest new buy at 0.13% of shares outstanding, or 9.7 million shares. The largest position belongs to First Eagle Management, who own 0.31% of shares outstanding.

Year to date Microsoft shares have risen 17.7% to $73.16 per share at close Tuesday.

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The fiscal fourth quarter for Microsoft brought $23.3 billion in revenue, a 13% rise year over year. The greatest contributor was cloud services revenue, which rose 15%. Earnings per share reached $6.5 billion with 84 cents per share, compared to $3.1 billion or 39 cents per share the same quarter the prior year.

Microsoft also repurchased $1.8 billion in stock in the quarter, down from $3.7 billion year over year, as well as paid $3.0 billion in dividends, increased from $2.8 billion year over year.

Visa (NYSE:V)

Twenty-one investors bought Visa stock in the second quarter, led by Stanley Druckenmiller (Trades, Portfolio), who started a new position at 1.09% of his total stocks. Joel Greenblatt (Trades, Portfolio) made the largest increase at 360.7%. The holders of the biggest position were Lee Ainslie (Trades, Portfolio), Chase Coleman (Trades, Portfolio) and Eric Mindich (Trades, Portfolio), each with 0.5% of shares outstanding.

Year to date, Visa stock gained 33.4% versus the 9.8% rise in the S&P 500, closing at $104.07 per share Tuesday.

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Visa, the global payments company, offers electronic payments in 200 countries. In the third fiscal quarter, Visa produced net income of $2.1 billion or 86 cents per share, up from $412 million or 17 cents per diluted share in fiscal third quarter 2016. The increase came as payments volume grew 38% and transactions increased 44% year over year. The prior year also included extra expenses from the acquisition of Visa Europe, excluding which earnings would have declined 26% year over year.

Visa revenue also increased 26% to $4.6 billion year over year, helped by the European acquisition, higher payments volume, international volume and processed transactions.

The company repurchased 17.8 million outstanding shares at the average price of $93.82 per share, at a cost of $1.7 billion. Its board also decided on a dividend of 16.5 cents.

Wells Fargo (NYSE:WFC)

Increased holdings of Wells Fargo appeared in the portfolios of 20 investors in the second quarter. Andreas Halvorsen (Trades, Portfolio) made the largest new buy, at 12.3 million or 0.25% of shares outstanding. The biggest holding belongs to Warren Buffett (Trades, Portfolio), who has 468 million shares of the company, worth 9.43% of the company.

Founded in 1852, Wells Fargo is the third largest bank in the U.S. by total deposits and assets. It has $1.9 trillion in assets, 8,600 locations and 13,000 ATMs. Year to date, the stock clumped 5.4% to $42.17 per share Wednesday.

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Wells Fargo’s revenue for the second quarter totaled $2.2 billion, flat from the previous year. Net income rose 5% year over year to $5.8 billion, and diluted earnings per share rose 6% to $1.07. The company’s net interest income edged up to $12.8 billion from $12.0 billion year over year, with a net interest margin of 2.9%. Wells’ higher net interest income was driven by higher interest income due to balance growth and higher interest rates, mitigated by lower variable income. Average deposits also increased 5% to a record $1.3 trillion. Loans declined 1%, or $10.2 billion, from year-end 2016 due to fewer mortgage and automobile loans.

On Aug. 22, Wells Fargo EL Tim Sloan published a Q&A with an update on the aftermath of its scandal last year, when accounts were opened in many customers’ names without their knowledge in order for sales associates to meet stringent quotas. Among the efforts, Wells hired a third party to analyze customer accounts to identify those that had been affected over the past 10 months, which was near completion at the time, and contacted customers who the fraud may have impacted financially.

The bank still has to complete a court case for a $142 class-action settlement with those affected since 2002 and will complete an expanded retail account analysis for dates ranging from 2009 to 2016.

Apple (NASDAQ:AAPL)

Nineteen guru investors chose to increase their holdings of iPhone-maker Apple Inc. Quant fund manager Jim Simons (Trades, Portfolio) made the biggest new buy with 584,433 shares or 0.01% of his portfolio. The biggest position belongs to Warren Buffett (Trades, Portfolio), who possesses 2.52% of the company’s outstanding shares, or 130.2 million.

Apple shares have advanced 38% year to date, reaching $159.98 per share Wednesday.

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For its fiscal third quarter ending on July 1, Apple’s revenue grew 7% year over year to $45.4 billion, primarily due to growth in services, iPhone sales and other products, with each of its geographic segments except China posting positive results. Earnings per share rose 17% year over year to $1.67.

Year over year, sales of the company’s iPhone increased 2%, with iPad up 2%, Mac 7% and services 22%. The company’s “other products” segment, which includes products such as Apple TV and Apple Watch, rose 23%.

For the fourth quarter, Apple expects revenue in the range of $49 billion to $52 billion, gross margins between 37.5% and 38%, and operating expenses between $6.7 billion and $6.8 billion.

Apple also authorized a dividend of 63 cents per share for Aug 17. The company has a share authorization in the range of $175 billion and $210 billion, and has used $158 million of it as of July 1.

See more of their favorite stocks of the quarter using the S&P 500 screener here.


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