Which Stocks are the Top US Fund Managers Buying?

In volatile markets, professional investors look for high quality names that are trading cheap. We reveal where the top US fund managers are finding long-term value

Greggory Warren, CFA 18 February, 2016 | 3:25PM
Facebook Twitter LinkedIn

It's hard to believe that it has been nearly seven years since we relaunched the Ultimate Stock-Pickers concept in April 2009. For those who may not recall, our primary goal when we revamped the concept was to tap into the transaction activity of some of the best mutual fund and insurance company investors we follow, and by cross-checking the most current valuation work and opinions of Morningstar's cadre of stock analysts against the actions of these Ultimate Stock-Pickers attempt to highlight investable ideas.

While we've never lacked for buy and sell data from our top managers, it has always proven to be a bit more difficult to find good ideas selling at reasonable valuations that we could comment on quarter after quarter. That said, with more than 75% of our Ultimate Stock-Pickers having reported their holdings for the fourth quarter of 2015, we have got a pretty good sense of what stocks they had been buying prior to the global market selloff, with many of these names now selling at much more attractive valuations. It should be noted, though, that when looking at our Ultimate Stock-Pickers’ purchases, we tend to focus on both high-conviction purchases and new-money buys.

What is a High Conviction Purchase?

We think of high-conviction purchases as instances where managers have made meaningful additions to their existing holdings, or made significant new-money purchases, focusing on the impact that these transactions have on their overall portfolios. We do, however, recognise that the decision to purchase any of the securities we are highlighting could have been made as early as the start of October of last year, with the prices paid by our top managers much different from today's trading levels.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

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.

Facebook Twitter LinkedIn

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Ally Financial Inc47.23 USD0.00
Microsoft Corp329.49 USD0.00Rating
Stryker Corp247.40 USD0.00Rating

About Author

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