Despite a volatile Christmas, our family of gurus still came together to celebrate their holdings in the six most broadly held stocks according to aggregated portfolio data on all of our Premium gurus: Microsoft Corp. (MSFT, Financial), Wells Fargo & Co. (WFC, Financial), Alphabet Inc. (GOOGL, Financial)(GOOG, Financial), Apple Inc. (AAPL, Financial), Bank of America Corp. (BAC, Financial) and JPMorgan Chase & Co. (JPM, Financial).
Markets go on wild sleigh ride, but Santa brings post-Christmas cheer to investors
The Dow Jones industrial average traded around 23,138.82 at market close on Thursday, approximately 260 points higher than the previous close of 22,878.45 and approximately 1,346 points higher than Christmas Eve’s close of 21,792.20. Figure 1 shows the day-to-day change in the Dow since Dec. 3.
Figure 1
Despite the two-day surge, the Dow is still down close to a net 2,690 points since Dec. 3’s close of 25,826.43. CNBC columnists Fred Imbert and Eustance Huang listed several reasons for the Dow’s 611-point nosedive earlier on Thursday, including increased fears of a potential “no deal” between the U.S. and China, two countries tied to an ongoing trade war. As Figure 1 illustrates, the day-to-day changes in the Dow ranged from approximately an 800-point nosedive on Dec. 4 to a four-digit surge on Dec. 26, the day after Christmas.
Microsoft
Fifty-seven gurus own shares of Microsoft, the application software company founded by Bill Gates (Trades, Portfolio), with a combined weighting of 175.06%. Gurus with large holdings in the Redmond, Washington-based company include PRIMECAP Management (Trades, Portfolio), Dodge & Cox and Pioneer Investments (Trades, Portfolio).
Microsoft closed at $101.18, up approximately 0.62% from the previous close of $100.56. GuruFocus ranks the company’s profitability 9 out of 10: even though profit margins have contracted approximately 1.6% per year over the past five years, Microsoft’s operating margin of 32.47% outperforms 95% of global competitors. Additionally, the company’s business predictability ranks 4.5 stars out of five, suggesting strong and consistent revenue and earnings growth over the past 10 years.
Wells Fargo
Forty-eight gurus own shares of Wells Fargo, Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial) CEO Warren Buffett (Trades, Portfolio)’s third-largest holding as of September, with a combined weighting of 137.34%. Shares of the San Francisco-based bank occupy 10.52% of Buffett’s equity portfolio.
Wells Fargo closed at $45.53, down approximately 0.13% from the previous close of $45.59 and approximately 5.83% higher than its 52-week low of $43.02. GuruFocus ranks the bank’s financial strength 4 out of 10: although the company’s equity-to-asset ratio of 0.11 ranks higher than 57% of global competitors, Wells Fargo’s debt-to-equity ratio of 1.18 ranks lower than 68% of global banks. Despite this, Wells Fargo’s price-book ratio is near a five-year low of 1.21, a positive investing sign according to GuruFocus.
Alphabet
Forty-seven gurus own Class A shares of Google parent Alphabet with a combined weighting of 100.73%, while 43 gurus own Class C shares with a combined weighting of 88.21%.
Class A shares of the Mountain View, California-based company closed at $1,052.90, up approximately 0.48% from the previous close of $1,047.85, while Class C shares closed at $1,043.88, up approximately 0.43% from the previous close of $1,039.46. Class A shares are trading approximately 7.69% higher than the 52-week low of $977.66 while Class C shares are trading approximately 7.60% higher than the 52-week low of $970.11.
GuruFocus ranks Alphabet’s financial strength and profitability 9 out of 10 on several positive indicators, which include a robust Altman Z-score of 10.85, a three-star business predictability rank and operating margins that are outperforming over 85% of global competitors despite declining approximately 2.4% per year over the past five years.
Apple
Forty-four gurus own shares of Apple, Buffett’s largest holding, with a combined weight of 101.80%. Shares of the Cupertino, California-based tech giant occupy 25.79% of Buffett’s equity portfolio.
Apple closed around $156.15, down 0.65% from the previous close of $157.17 and approximately 6.52% higher than the 52-week low of $146.59. GuruFocus ranks the company’s profitability 8 out of 10 on several good signs: even though operating margins have declined approximately 1.9% per year over the past five years, Apple’s margins and returns are outperforming over 97% of global competitors. Additionally, the company’s three-year revenue growth rate of 9.60% ranks higher than 80% of global consumer electronics companies.
Bank of America
Forty-two gurus own shares of Bank of America, Buffett’s second-largest holding, with a combined weight of 102.56%. Shares of the Charlotte, North Carolina-based bank occupy 11.69% of Buffett’s equity portfolio.
Bank of America closed at $24.37, up approximately 1.08% from the previous close of $24.11 and approximately 7.55% higher than the 52-week low of $22.66. GuruFocus ranks the bank’s financial strength 4 out of 10: although Bank of America’s equity-to-asset ratio of 0.11 ranks higher than 68% of global competitors, its debt-to-equity ratio of 1 ranks lower than 63% of global banks.
JPMorgan Chase
Forty-one gurus own shares of JPMorgan Chase, one of Buffett’s new holdings as of the third quarter, with a combined weight of 67.80%.
JPMorgan Chase closed at $97.04, up approximately 1.13% from the previous close of $95.96 and approximately 6.50% higher than the 52-week low of $91.11. GuruFocus ranks the New York-based bank’s financial strength 3 out of 10 primarily due to a debt-to-equity ratio that underperforms 68% of global banks. Despite this, JPMorgan Chase’s net margin of 27.88% outperforms 60% of global banks.
See also
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Disclosure: No positions.
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