Undoubtedly one of the best investors ever, Warren Buffett is followed by everybody in the financial world and his statements are carefully analyzed. There are many reasons for that, but the main one is that Warren Buffett gets his stock picks right (almost) all the time. And he is not the only one. The likes of Carl Icahn, George Soros and David Tepper are also part of this group. Being successful in the investment world invariably leads to high personal net worth, so it’s no wonder all of the above-mentioned fund managers are billionaires. This is why Insider Monkey pays close attention to what billionaire fund managers do: their high net worth is an indicator of their proficiency in the market. In this article we’ll take a look at 6 stocks Warren Buffett and billionaire fund managers are betting big on.
First up is Apple Inc. (NASDAQ:AAPL). The tech giant has registered a boost in popularity among billionaire fund managers, with 17 of them invested in the stock at the end of the 2017 third quarter, up from 14 a quarter earlier. Warren Buffett seems to think there is still growth potential here, having increased Berkshire Hathaway’s stake in the tech giant by 3% to approximately 134 million shares. David E. Shaw’s fund, D E Shaw, holds the second largest position among the funds tracked by Insider Monkey, having reported in its latest 13F filing a fresh bet that amounted to 8.02 million shares. Larry Robbins’ Glenview Capital also has Apple Inc. (NASDAQ:AAPL) among its top positions, having reported ownership of roughly 2.5 million shares at the end of the third quarter.
Bank of America Merrill Lynch has updated its stance on Apple Inc. (NASDAQ:AAPL) today, having reiterated its Buy rating and increased its price target from $180 per share to $220 per share, which represents a 25% premium over Tuesday’s closing price. In a note to clients, analyst Wamsi Mohan wrote: “We remain bullish on potential for cash repatriation, lower tax rates, and the potential for positive estimate revisions heading into 2019.” He estimates that Apple could repatriate some $236 billion from overseas given the new 15.5 percent tax rate, which could potentially be used for buybacks, dividends or acquisitions.
At the end of the 2017 third quarter, Warren Buffett and Berkshire Hathaway held 8.49 million shares of Charter Communications, Inc. (NASDAQ:CHTR), down by 11% from the previous quarter. Although Stephen Mandel’s Lone Pine Capital has decreased its stake in Charter Communications by 16%, this is still the fund’s third largest equity positions, amounting to more than 3.66 million shares. Chase Coleman is also keeping an eye on this stock, with his fund, Tiger Global, holding 990,710 shares according to its latest regulatory filings. Overall, 18 billionaire fund managers had Charter Communications, Inc. (NASDAQ:CHTR) in their equity portfolios at the end of the third quarter, up from 17 a quarter before.
Charter Communications, Inc. (NASDAQ:CHTR) is among the latest media companies to focus on original content. The company has recruited TV veteran Katherine Pope as head of original programming initiatives. Charter looks to capitalize on growing demand for internet service, as video service subscriptions continue to fall. Nevertheless, it still has the second-largest cable system in the US with 17 million video subscribers.
Unfazed by the cryptocurrency rush
Billionaire investors don’t seem to have been impressed by the recent cryptocurrency fever, as the next two stocks are very popular among them. Although digital currencies are supposed to directly compete with classical payment methods, blockchain, the underlying technology that makes Bitcoin and other cryptocurrencies work, could become an asset for Visa Inc (NYSE:V) and Mastercard Inc (NYSE:MA). Back in October 2017, Mastercard opened up its blockchain to certain banks and vendors as an alternative payment method, although it’s only available for businesses, for the time being, and requires an invitation. In November, Visa rolled out a similar business-to-business payment service, called B2B connect.
vonDUCK/Shutterstock.com
Mastercard Inc (NYSE:MA) has registered a boost in popularity among billionaire fund managers, with 18 of them having reported a stake in the company at the end of the third quarter, up from 15 at the end of the second quarter. Leading the pack was Warren Buffett’s Berkshire Hathaway with a stake that amounted to 4.93 million shares, unchanged from the previous quarter. Not far behind was Stephen Mandel’s Lone Pine Capital, which has reported a slight reduction in its stake to 4.49 million shares. Andreas Halvorsen is very bullish on this stock, having greatly increased his fund’s bet over the third quarter. According to its latest regulatory filings, Viking Global holds 2.15 million shares of Mastercard Inc (NYSE:MA).
So, what do billionaire fund managers think about Visa Inc (NYSE:V)? They like the company a lot. Together with Warren Buffett, 19 billionaires had this stock in their portfolio at the end of September 2017, unchanged from the previous quarter. Andreas Halvorsen is a big fan of this stock, having boosted his fund’s investment by 30% and made it his third largest equity position at the end of the quarter. According to its latest 13F filing, Viking held a little over 10.2 million shares, just shy of Warren Buffett’s position. Berkshire Hathaway reportedly held 10.6 million shares, unchanged from the previous quarter. Ken Griffin’s Citadel Investment Group has initiated a fresh bet on Visa Inc (NYSE:V) and has acquired 3.73 million shares during the third quarter.
Top Dogs
When it comes to Monsanto Company (NYSE:MON), Berkshire Hathaway again leads the way, having increased its stake by 11% during the 2017 third quarter. According to the latest regulatory filings, Berkshire holds approximately 8.87 million shares of the producer of agricultural chemicals. In their latest 13F filings, James Dinan’s York Capital Management reported a 25% increase in its holding of Monsanto Company (NYSE:MON) to 5.28 million shares, while Jim Simons’ Renaissance Technologies more than doubled its bet, having amassed 2.2 million shares by the end of the 2017 third quarter. In total, 20 billionaire fund managers had this stock in their equity portfolios.
Monsanto Company (NYSE:MON) is currently the subject of takeover efforts from German chemical giant Bayer, which would be the biggest ever merger in the seed and chemical industry. Both companies are currently seeking regulatory approval and expect the deal to close by the middle of 2018. While those opposing the merger argue that it would lead to higher prices for farmers, Bayer and Monsanto claim that together they could up their R&D efforts and develop products that would increase food production.
Bank of America Corp (NYSE:BAC) is the most popular financial stock among the hedge funds followed by Insider Monkey, so it’s no wonder it’s also held by a large number of billionaire fund managers. At the end of the 2017 third quarter, 20 billionaire fund managers, including Warren Buffett, were invested in Bank of America, up from 14 registered a quarter before. Buffett’s Berkshire Hathaway was the largest holder, having indicated ownership of 679 million shares in its latest 13F filing. The position was valued at $17.2 billion and was the fifth largest in Berkshire’s equity portfolio. It is also important to note that it was a new position, established during the third quarter. OZ Management, run by Daniel S. Och, is also among the funds betting on Bank of America Corp (NYSE:BAC), having reported in its latest 13F filing a position that amounted to a little over 15 million shares, up by 1% from the previous quarter. Israel Englander’s Millenium Management also reported a new position in BofA, having amassed 12.8 million shares during the third quarter of 2017.
Earlier today, Bank of America Corp (NYSE:BAC) reported better-than-expected earnings for the fourth fiscal quarter, as a boost in loan growth offset a decline in fixed-income trading. Adjusted earnings came in at $0.47 per share, compared with expectations of $0.44 per share. Adjusted revenue of $21.4 billion was slightly short of expectations of $21.5 billion. Although the stock is down 2.5% as of the moment of this writing, it could be just a minor correction as analysts expect financial stocks to continue their bullish run given the recent GOP tax overhaul and expectations regarding further interest rate hikes in 2018.
Disclosure: none.
