Which Stocks are the Best US Fund Managers Buying?

By crosschecking the opinions of Morningstar's stock analysts against the actions of some of the best equity managers in the industry, we hoped to uncover a few good ideas

Greggory Warren, CFA 20 November, 2015 | 9:45AM
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Based on the buying and selling activity of our top managers during the third quarter, it appears that the ongoing trend of high-conviction purchases of firms with economic moats continued during the most recent period.

That said, just three of the top 10 high-conviction purchases; no-moat Walgreens Boots Alliance (WBA) and wide-moated-rated American Express (AXP) and Intel (INTC), during the period represented meaningful new-money buys for at least two of our Ultimate Stock-Pickers. And much as we've seen during past periods, there were a fair number of outright sales in the quarter, most of which were driven by valuation as opposed to changes in opinion.

Ultimate Stock Pickers High Conviction Buys

What is the Ultimate Stock-Pickers Report?

When we re-launched the Ultimate Stock-Pickers concept in April 2009, our primary goal was to uncover investment ideas that not only reflected the most recent transactions of some of the top investment managers in the business but were timely enough for investors to get some value from them. By crosschecking the most current valuation work and opinions of Morningstar's stock analysts against the actions of some of the best equity managers in the industry, we hoped to uncover a few good ideas each quarter.

When looking at our Ultimate Stock-Pickers' purchases, we focus on both high-conviction and new buys. We think of high-conviction purchases as instances where managers have made meaningful additions to their existing holdings or make significant new purchases, focusing on the impact that these transactions have on their overall portfolios.

It is important for investors to assess the current attractiveness of any security mentioned here by checking it against some of the key valuation metrics – like the Morningstar star rating for stocks which compares the stock’s fair value to its current share price – that are generated regularly by our stock analysts' research efforts. It is even more critical for investors to look to these metrics when the market is being as volatile as it has been lately.

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
American Express Co246.90 USD0.88Rating
Intel Corp32.95 USD-1.26Rating
Walgreens Boots Alliance Inc11.23 USD-0.62Rating

About Author

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

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