Harris Associates’ Top Stock Picks for 2013 Include Intel

Page 1 of 2

There are a number of ways to use quarterly 13F filings from major investors such as hedge funds in order to improve the investment process. One way is be aggregating these filings and using them to devise large-scale investing strategies. For example, we have found that imitating the most popular small cap stocks among hedge funds can be profitable; in our August newsletter, we listed the most popular names in this category and on average these stocks outperformed the S&P 500 by 18 percentage points between September and January (read more about our hedge fund strategies). We also like to review individual 13Fs, treating them as recommendations from fund managers. If our brief overview of the stock sounds appealing, then an investor can go on to do further research. Read on for our thoughts on Harris Associates’ five largest holdings by market value as of the end of December 2012:

Harris’s top pick was Mastercard Inc (NYSE:MA), reporting a position of 2.6 million shares in the credit card company. Mastercard reported a 10% increase in revenue last quarter compared to the fourth quarter of 2011, and earnings were up as well. While the trailing earnings multiple of 24 is high, the sell-sde expects high earnings growth to continue resulting in a forward P/E of 17. Renaissance Technologies, founded by billionaire Jim Simons, was buying shares of Mastercard during the third quarter of 2012 and owned about 550,000 shares at the end of September (see Renaissance’s stock picks).

Intel Corporation (NASDAQ:INTC)

The fund also liked Intel Corporation (NASDAQ:INTC), with almost 59 million shares in its portfolio according to the 13F. At a market capitalization of about $100 billion, Intel trades at 10 times earnings whether we consider trailing results or analyst consensus for 2014. This is because the company is expected to be hit hard by the continuing shift towards tablets and smartphones rather than PCs. The stock price is down 22% in the last year, roughly in line with the decline in earnings. Intel does pay a high dividend yield. It was also still one of the most popular tech stocks among hedge funds in the third quarter (find more tech stocks hedge funds loved).

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Top 10 Highest Paying Jobs in the World

Most Expensive Day-Care in New York City

The 10 Cheapest Places to Retire Abroad

Top 10 Most Expensive Luxury Cars in the World – 2014

Killer Small Business Ideas

The 50 Best Personal Finance Blogs

Most Expensive Apartments in New York City

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!