Insider Monkey has analyzed 13F filings for the second quarter of 2012 submitted by hundreds of hedge funds and other well-known investors to determine which services stocks hedge funds are buying into and which they are leaving. This analysis includes producing a list of the ten most frequently owned services stocks among the filers in our database. Read on for the full list or compare them to last quarter’s list of the top services stocks among hedge funds.
Visa Inc (NYSE:V). With Medco Health Solutions having been acquired by Express Scripts, Visa rose to the top of our list. Sixty-seven hedge funds owned Visa at the end of June, up from 66 at the end of the first quarter. Billionaire Julian Robertson, who has been bullish on credit card stocks since last year due to the fact the companies do not actually bear credit risk but benefit from increased payment volume, was one owner of the stock (see more of Robertson’s stock picks).
News Corp (NASDAQ:NWSA). Hedge funds are getting into the owner of the Fox brand despite legal and management troubles as the company plans to split. In theory, management of the child companies should be better able to focus on the individual business units once they are independent, creating shareholder value. Sixty-four hedge funds, including Andreas Halvorsen’s Viking Global, owned News Corp at the end of the quarter, up from 51.
Mastercard Inc (NYSE:MA). Mastercard also saw additions from hedge funds during the second quarter: 60 funds owned the stock at the beginning of April and by the end of June that number had grown to 64. Mastercard trades at 25 times trailing earnings but strong sell-side growth expectations price it at 16 times forward estimates. Billionaire Chase Coleman’s Tiger Global Management- Coleman is a Tiger Cub- increased its position in Mastercard over the course of the quarter.
eBay Inc (NASDAQ:EBAY). 59 hedge funds owned eBay at the end of the second quarter, up from 56. The online auction site and owner of PayPal more than doubled its earnings in its most recent quarter compared to a year earlier, and now trades at 17 times trailing earnings. Billionaire Stephen Mandel and his team at Lone Pine Capital initiated a 13.9 million share position in the stock. Find other stocks Lone Pine owns.
Tyco International Ltd. (NYSE:TYC). Tyco’s 55 hedge fund owners at the end of the second quarter was down from 63 at the end of the first quarter. The security and fire protection company trades at 20 times trailing earnings and 13 times forward earnings estimates. SAC Capital Advisors, managed by billionaire Steve Cohen, increased its position by 44% to 3 million shares.
Priceline.com Inc (NASDAQ:PCLN). 50 hedge funds had owned Priceline at the beginning of the quarter, growing to 53 by the end of June. Billionaire Ken Fisher’s Fisher Asset Management was one of the funds which initiated a position in the stock, closing the quarter with about 600,000 shares. Priceline is priced for high growth, with a trailing price-to-earnings ratio of 27. Its earnings grew 74% last quarter compared to a year ago.
Amazon.com, Inc. (NASDAQ:AMZN). Amazon is another stock dependent on high growth to justify its valuation: its $110 billion market capitalization represents a trailing P/E of about 300. Hedge funds generally didn’t mind this valuation, with ownership slipping from 51 funds to 50. Blue Ridge Capital, managed by former Julian Robertson second-in-command John Griffin, was one of the funds reporting a position in Amazon.
Lowe’s Companies, Inc. (NYSE:LOW). Lowe’s was the top brick-and-mortar retailer on our list, slipping slightly from 50 hedge funds reporting a position last quarter to 49 this quarter. Edgar Wachenheim’s Greenhaven Associates owned over 12 million shares of the stock.
Liberty Media Corp (NASDAQ:LMCA). 47 hedge funds owned Liberty Media at the end of June, up slightly from 46 at the beginning of April. Warren Buffett and Berkshire Hathaway liked Liberty Media, nearly doubling their position to 5.5 million shares.
Wal-Mart Stores, Inc. (NYSE:WMT). Wal-Mart broke onto our list of the top ten services stocks; it dropped from 51 hedge fund holders to 46, but other stocks that had been more widely owned became more widely sold. Billionaire George Soros bucked the trend and initiated a large position in Wal-Mart during the second quarter; according to the 13F, it is now his largest stock holding.