Investors who prefer to invest in large, stable companies which are market leaders in their respective industries usually don’t need to look any further than the Dow Jones Industrial Average (DJIA) to select the right stocks for their portfolio. Since the DJIA comprises of 30 of the largest U.S. companies across industries (except transport and utilities), investing in these companies is considered the safest bet for long-term investors. In order to narrow down some of the best picks from the DJIA we decided to cross-reference the stocks with our data based on the equity portfolios of some 800 funds from our database. With this in mind, in this article, we are going to take a closer look at the five most popular DJIA stocks among the investors we follow.
We track prominent investors and hedge funds because our research has shown that historically their stock picks delivered superior risk-adjusted returns. This is especially true in the small-cap space. The 15 most popular small-cap stocks among a select group of investors delivered a monthly alpha of 80 basis points between 1999 and 2012 (see the details here).
#5 JPMorgan Chase & Co. (NYSE:JPM)
– Investors with Long Positions (as of December 31): 100
– Aggregate Value of Investors’ Holdings (as of December 31): $7.58 billion
Let’s begin with JPMorgan Chase & Co. (NYSE:JPM), whose shares are trading down by 9.5% year-to-date, but are still performing relatively well when compared to shares of other large banks. During the fourth quarter, the ownership of the bank among funds tracked by us remained constant, but the aggregate value of their holdings saw a marginal decline of 2.2%. Among the investors that raised their stakes in the bank during that time was billionaire Ken Fisher‘s Fisher Asset Management, which increased its holding by 2% to almost 14.0 million shares. On March 17, the company announced that it was adding $1.88 billion to its share repurchase program after authorizing $6.4 billion in buybacks last year. According to recent reports, shareholders of JPMorgan Chase & Co. (NYSE:JPM) and Citigroup Inc (NYSE:C) will get to vote on a potential breakup of the respective banks later this year.