There are many great investors, who manage some of the best-performing funds and have built massive fortunes while managing their clients’ money. Some investors have been on Wall Street for decades, such as Carl Icahn, Steve Cohen, or Ray Dalio. Others are younger and while are often overlooked by the media, are still worth following. For example, it’s highly likely that you haven’t heard of Leonard Potter of Wildcat Capital Management, Larry Chen and Terry Zhang of Tairen Capital, or Mitchell Blutt of Consonance Capital Management. Yet, these funds’ stock picks posted returns of over 89% during the 12-month period ended September 2017.
Following hedge fund managers can be very useful. Many great investors often make appearances on TV or give interviews to papers, where they present their thoughts on various global events and discuss some of their investment ideas. At the same time, hedge funds disclose their US equity holdings in quarterly 13F filings, which can serve as treasure troves of information. Investors differ in their approaches and following their stock picks can help beat the market. At Insider Monkey, we follow over 650 hedge funds as part of our investment strategy that involves a proprietary methodology to identify the best stocks in the small-cap space that the best performing hedge funds are collectively bullish on. This strategy has outperformed the market by more than 20 percentage points since it was launched in 2014 and we share the stock picks in our premium newsletters. We also have a monthly activist newsletter that focuses on a single activist fund and offers the best approach to imitate that fund (read more details here).
Among the 650 funds in our database, 40 funds are managed or were founded by a billionaire. Billionaire investors are a particularly interesting group to follow because their expertise and great stock picking skills have allowed them to amass vast fortunes and earn prominent positions in Forbes’ lists of richest people. Mimicking billionaire investors is a popular strategy, although it should be noted that most billionaires have a conservative approach, invest in large companies that usually perform in-line with the broader market and they stick to their holdings for very long periods of time. While this is good for defensive investors and investors seeking to build a portfolio for the long run, this is not the best approach in a bull market.
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Nevertheless, let’s take a look at stocks that most successful investors in the world like. Instead of simply listing their top five holdings, we have decided to step it up a notch and identify stocks that billionaires are collectively bullish on. To identify the stocks, we have combed through last 13F filings of 10 funds managed or founded by billionaires: Warren Buffett’s Berkshire Hathaway, George Soros’ Soros Fund Management, Jorge Paulo Lemann’s 3G Capital, Jim Simons’ Renaissance Technologies, Ray Dalio’s Bridgewater Associates, Carl Icahn’s Icahn Capital, Steve Cohen’s Point72 Asset Management, David Tepper’s Appaloosa Management, John Paulson’s Paulson & Co., and Ken Griffin’s Citadel Investment Group. After going through 13F filings, we identified what stocks are held by at least three of these funds and then prioritized the list based on stocks that were the most common in investors’ 13F portfolios and most frequently appeared among the 10 largest holdings.
Having said that, let’s take a look at five stock picks from world’s greatest investors of all time that we selected.
Let’s start with Altaba Inc (NASDAQ:AABA), which has five billionaire-led funds holding shares. Moreover, out of these five funds, four have Altaba Inc (NASDAQ:AABA) among their top 10 holdings. In the equity portfolios of George Soros’ Soros Fund Management and Steve Cohen’s Point72 Asset Management, Altaba Inc (NASDAQ:AABA) is the second-largest holding, as the funds own stakes worth $185.69 million and $405.21 million, respectively. John Paulson’s Paulson & Co. has a stake worth $251.66 million,while Ken Griffin’s Citadel Investment Group disclosed a $240.26 million position.
Another company among the five stock picks from world’s greatest investors of all time is Time Warner Inc (NYSE:TWX), in which also five funds hold long positions, including Soros Fund Management, Point72 Asset Management. Soros Fund Management holds $104.50 million worth of Time Warner Inc (NYSE:TWX)’s stock, while Point72 Asset Management has a $459.21 million stake that is the largest in its equity portfolio. In Paulson & Co.’s equity portfolio, Time Warner Inc (NYSE:TWX) is on the ninth spot, while Jim Simons’ Renaissance Technologies, Paulson & Co. and Citadel Investment Group, Time Warner Inc (NYSE:TWX) is further down.
Facebook Inc (NASDAQ:FB) also has five billionaires long its stock, with three of them holding the company among its top 10 holdings. Citadel Investment Group has the largest stake in Facebook Inc (NASDAQ:FB), which is worth $793.21 million, according to its last 13F filing. It is followed by David Tepper’s Appaloosa, which reported a $563.87 million position, and Point72 Asset Management with a $217.69 million stake. Soros Fund Management and Bridgewater Associates have much smaller positions in Facebook Inc (NASDAQ:FB), which were valued at $18.70 million and $10.74 million, respectively, at the end of September.
Other tech company that billionaires like is memory-chip maker Micron Technology, Inc. (NASDAQ:MU). Out of five billionaires’ funds that are long Micron Technology, Inc. (NASDAQ:MU), Appaloosa owns the largest stake, which was worth $670.73 million at the end of September and was the largest in the fund’s equity portfolio. In Citadel Investment Group’s 13F, Micron Technology, Inc. (NASDAQ:MU) is on the fifth spot as the fund holds $615.43 million worth of stock. Renaissance Technology disclosed a stake valued at $264.73 million, while in equity portfolios of Point72 Asset Management and Bridgewater Associates, Micron Technology, Inc. (NASDAQ:MU) is represented by stakes worth $60.20 million and $3.93 million, respectively.
Last but not least, there were four billionaire investors bullish on Bank of America Corp (NYSE:BAC) at the end of September. Among them, Warren Buffett’s Berkshire Hathaway holds by far the largest position, which was valued at $17.21 billion at the end of September. In the equity portfolio of Citadel Investment Group, Bank of America Corp (NYSE:BAC) is also the largest holding – valued at $959.50 million. Two other billionaire funds that like Bank of America Corp (NYSE:BAC) are Renaissance Technologies and Appaloosa, which reported positions worth $139.50 million and $160.39 million, respectively.
These are five stock picks from world’s greatest investors of all time that we selected. Two investors that were not mentioned among the investors in these five companies are Jorge Paulo Lemann’s 3G Capital and Carl Icahn’s Icahn Capital. 3G Capital has several companies in its equity portfolio that have at least three other funds holding shares, such as Comcast Corporation (NASDAQ:CMCSA) and Canadian Pacific Railway Limited (USA) (NYSE:CP), but none of the other funds have these companies among their top 10 holdings. On the other hand, just two of Icahn’s holdings saw at least three funds from our selection long their stock: American International Group Inc (NYSE:AIG) and Paypal Holdings Inc (NASDAQ:PYPL). Other stocks in which there are more than three billionaires holding shares are Microsoft Corporation (NASDAQ:MSFT), International Business Machines Corp. (NYSE:IBM), Amazon.com, Inc. (NASDAQ:AMZN), EQT Corporation (NYSE:EQT), and Allergan plc (NYSE:AGN), among others, but we didn’t include them as they didn’t rank as high in funds’ equity portfolios as the stocks we discussed above.
Disclosure: none
