However, Intel is still struggling to find firm footing in the mobile space, with that division of the company posting a grotesque $4.2 billion loss in 2014. Intel failed earlier this year to purchase Altera Corporation (NASDAQ:ALTR) for $54 per share and its rumored push to purchase Via Technologies of Taiwan has yet to come to fruition. Intel Corporation (NASDAQ:INTC) currently trades at a very reasonable P/E of 14.01 and forward P/E of 13.74. In addition to Gayner and Hawkins, billionaire Ken Fisher is also a major investor in Intel.
Gayner has held a position in Oracle Corporation (NYSE:ORCL) since the second quarter of 2011, with it standing at 638,000 shares with a value of $27.53 million as of March 31. The position was unchanged during the quarter, as were the two previously mentioned holdings. Also a top pick of value investors Donald Yacktman and Richard Pzena, Oracle, which is one of the biggest software companies in the World, trades at a P/E of 18.58 and a forward P/E of just 14.74. The enterprise software and cloud services provider, the latter of which being where the company is exhibiting strong growth potential, could see that potential develop even faster if it pulls the trigger on a rumored purchase of the $47.22 billion Salesforce.com, inc. (NYSE:CRM), which would be the largest ever purchase of a software company. With Microsoft Corporation (NASDAQ:MSFT) removing itself from the picture, Oracle Corporation (NYSE:ORCL) becomes the favorite to land the customer relations management and cloud services provider.
Hedge funds and other big money managers like Gayner tend to have the largest amounts of their capital invested in large and mega-cap stocks because these companies allow for much greater capital allocation. That’s why if we take a look at the most popular stocks among funds, we won’t find any mid- or small-cap stocks there. However, our backtests of hedge funds’ equity portfolios between 1999 and 2012 revealed that the 50 most popular stocks among hedge funds underperformed the market by seven basis points per month. On the other hand, their top small-cap picks performed considerably better, outperforming the market by 95 basis points per month. This was confirmed through backtesting and in forward tests of our small-cap strategy since 2012. This strategy, which involves imitating the 15 most popular small-cap picks among hedge funds has provided gains of more than 139%, beating the broader market by over 80 percentage points over the past 32 months (see the details).