The top 5 stocks investing gurus are buying

Fund managers purchased these names the most during the first quarter.

By May 23, 2013 10:39AM

Portfolio Account statement © Alamy Creativity, AlamyLast week, gurus finished reporting their portfolio updates for the first quarter, and buying activity was more concentrated among certain stocks than others. GuruFocus' S&P 500 Screener demonstrates that the companies the most money managers GuruFocus follows bought or increased their shareholdings of are: Apple (AAPL), Microsoft (MSFT), Citigroup (C), JPMorgan (JPM) and Oracle (ORCL).

Oracle (ORCL)

Oracle was purchased by two money managers GuruFocus follows in the first quarter, making it the fifth-most purchased of the S&P 500 ($INX). The stock in the first quarter traded between $31.25 and $36.34. On Monday, it traded at $34.90 after gaining 4.7% year to date.

Jeremy Grantham, with 47,057,601 shares, has the largest stake, while Lou Simpson, with 5,019,659 shares, the stock is the greatest percentage holding of his portfolio, at 10.2%.

Oracle, whose market cap stands at $160.4 billion, provides optimized and integrated hardware and software systems to its clients which include all of the Fortune 100.

Oracle in the first quarter reported a 1% decline in revenues to $8.96 billion on a U.S. currency basis, and an almost flat net income of $2.5 billion or 28% of revenues. Cash and cash equivalents also increased to $16.1 billion from $14.96 billion, and current liabilities declined to $11.9 billion from $15.34 billion.

Oracle in February merged with session border control technology company Acme Packet Inc. and acquired cloud marketing and revenue management software company Eloqua Inc. for $935 million.

JPMorgan (JPM)

Twenty-three gurus purchased or added to their holdings of JPMorgan stock in the first quarter, ranking it as the fourth most-purchased stock of the S&P 500. JPMorgan's third quarter share price spanned $43.96 and $51, and touches a near 10-year high $52.59 per share on Tuesday.

Investor James Barrow has the largest stake in JPMorgan with almost 31 million shares, or 0.8% of the company. Mark Hillman owns 35,236 shares, which is the largest percentage of the guru's portfolio at 5.1% of his assets managed.

In the first quarter, JPMorgan reported net income of $6.5 billion, an increase from $4.9 billion in the year-ago quarter, on $25.8 billion in revenue, declined slightly from $26.8 million in the year-ago quarter. Nevertheless, the firm's capital strength and earnings power allowed it to increase its dividend to $0.38 per share from $0.30 per share, matching its highest historical level.

JPMorgan has a price-to-earnings ratio of 9.3, a price-to-sales ratio of 2.08 (near a three-year high) and price-to-book ratio of 1.0.

Citigroup (C)

Twenty-three gurus also purchased Citigroup, tying it with fellow financial services company JPMorgan. The company traded within $39.56 and $47.60 in the first quarter, and at $51.60 on Tuesday.

James Barrow owns the most shares with just over 20 million, and Mohnish Pabrai has the most significant investment, with about 1.6 million shares, amounting to 20.3% of his assets managed.

Citigroup in the first quarter reported net income of $3.8 billion, up from $2.9 billion in the year-ago quarter, after 2012 marked its third straight year of profitability since the financial crisis. Revenue of $20.5 billion was up from $19.4 billion in the year-ago quarter. The bank promised a "challenging" year but said factors contributing to positive results included: seasonally strong markets businesses, sustained investment banking momentum, year-over-year loan and deposits growth and a more favorable credit environment.

In March, Citi agreed to pay $730 million to settle a class action lawsuit related to Citigroup debt and preferred stock purchased from 2006 to 2008, placing it closer to resolving its claims from the financial crisis period.

Citi's dividend remains $0.01 per share, but the company approved a $1.2 billion common stock repurchase program ending in first quarter 2013, in an aim to offset share dilution due to its annual incentive compensation grants.

Citigroup has a price-to-earnings ratio of 19.2, price-to-book of 0.80 and price-to-sales of 2.18, near a five-year high.

Microsoft (MSFT)

Thirty-one gurus purchased second-place stock Microsoft in the first quarter. Its price ranged from $26.46 to $28.61 in the first quarter, and hit $35.08 on Tuesday, near its 10-year high. (Microsoft owns and publishes Top Stocks, an MSN Money site.)

The firm Dodge & Cox possesses the most shares, with more than 78 million, and Donald Yacktman has the largest weighting in the company, with 6.1% of his total assets managed invested in it.

In the first quarter Microsoft had revenue of $20.49 billion, an increase from $17.4 billion in the year-ago quarter though down slightly sequentially. Revenue increases were primarily a result of new products and services such as the Windows 8, Surface Pro and the new Office, and hampered by a decline in the x86 PC market. Net income also increased to $6.1 billion, an increase from $5.1 billion in the year-ago quarter.

Microsoft has a price-to-earnings ratio of 17.8, price-to-book of 4.4 and price-to-sales near a three-year high at 3.89.

Apple (AAPL)

Apple was the most-purchased stock in the first quarter. Shares of the company were purchased by 37 investor gurus tracked by GuruFocus. The purchase price ranged between $420.05 and $549.03. On Tuesday, the price stands at $442.93, near a 52-week low.

Hedge fund manager David Einhorn controls the most shares with about 2.4 million, which also qualifies him as the investor with the most dominant position, at 16.2% of his total assets under management.

In the first quarter Apple posted $43.6 billion in revenue, compared to $39.2 billion in the year-ago quarter, and $9.5 billion in net profit, compared to $11.6 billion in the year-ago quarter. Revenue growth was driven by strong iPhone and iPad sales. The company ended the quarter with $145 billion in cash on its balance sheet.

In April, Apple also decided to more than double its return of capital to shareholders to $100 billion by the end of calendar year 2015, or about $30 billion per year. The program includes increasing its repurchase authorization from $10 billion to a record $60 billion, and spending roughly $1 billion annually on net-share-settle vesting restricted stock units, as well as a 15% dividend increase to $3.05 per share.

Apple has a price-to-earnings ratio of 10.3, near its 10-year low, a price-to-book of 3.3 and price-to-sales of 2.43, near its five-year low.

May 23, 2013 4:02PM
The problem with following the purchases of investment gurus is that most of the information we get is a quarter after they buy it and a quarter after they sell it.
May 23, 2013 2:25PM
Let me see here, they buy first and low, you buy middle, the rest buy high, they sell high, you and the rest lose. 
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