10 Stocks Bought by Top Fund Managers

The equity pickings continue to get slimmer for a proven group of top fund managers as the market continues to trade around its all-time high

Greggory Warren, CFA 2 June, 2014 | 1:28PM
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Ultimate Stock-Pickers is a concept we’ve developed at Morningstar with one simple goal: to cross check our stock research against the opinions of professional money managers. While the stock analysts at Morningstar spend the majority of their time hunting for quality companies trading at attractive valuations, we would be remiss if we failed to acknowledge the fact that a whole host of individuals outside of Morningstar are engaged in the very same effort. So why not take advantage of the fruits of their labour and in the process highlight many of the gems that exist from time to time within our own universe of 5-Star stocks?

We’re not as interested in what all managers think though so much as we are in what the best in the business are doing. As such, we maintain a list of 26 managers that we believe are worth monitoring on a regular basis. With most institutional investment managers required to report their investment to the Securities and Exchange Commission (SEC) on a quarterly basis, and Morningstar receiving monthly updates on the holdings of many mutual fund managers, we are able to construct a consolidated list of holdings for the managers on our roster and track any meaningful changes in their equity positions.

Once that is completed, we assess the relative attractiveness of each individual security by how many funds actually hold it and whether or not they’ve been adding to (or subtracting from) the position. We also look at the percentage each security makes up of the portfolios of each of the managers on our list, determining the level of conviction they have in a particular name by the amount they’ve committed to it.

All of which allows us to compile a list of top purchases and sales, which we cross-reference against our own stock ratings to determine if a security is still selling at an attractive enough valuation to warrant further investigation.

Top 10 Purchases from the Ultimate Stock Pickers

Unilever (ULVR)

Diageo (DGE)

Accenture (ACN)

Citigroup (C)

Praxair (PX)

Procter & Gamble (PG)

Chevron (CVX)

CSX Corporation (CSX)

Zoetis (ZTS)

EXCO Resources (XCO)

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Accenture PLC Class A330.33 USD-0.36Rating
Chevron Corp154.09 USD-1.85Rating
Citigroup Inc64.66 USD0.25Rating
CSX Corp33.64 USD-2.52Rating
Diageo PLC2,483.75 GBX-0.49Rating
EXCO Resources Inc8.20 USD-0.61
Unilever PLC4,397.00 GBX-1.08Rating
Zoetis Inc Class A179.38 USD-0.76Rating

About Author

Greggory Warren, CFA  Greggory Warren, CFA, is a senior stock analyst with Morningstar.

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