All investors aspire to outperform the market and earn the highest possible returns. However, not everyone can achieve this and only a handful of investors managed to acquire an impressive fortune. As their wealth grew, the tastes of these investors also changed. With this in mind, we have selected five companies that represent the top picks of five great billionaire investors, George Soros, Carl Icahn, Leon Cooperman, Jim Simons, and David Tepper. The companies that constitute a major chunk of their equity portfolios are Apple Inc. (NASDAQ:AAPL), Alibaba Group Holding Ltd (NYSE:BABA), Actavis plc (NYSE:ACT), Colgate-Palmolive Company (NYSE:CL), and General Motors Company(NYSE:GM).
While it might be interesting to follow the latest moves of these billionaire hedge fund managers, immitating their top holdings is not the best way to beat the market for smaller investors. Our research has also pointed out that the best investing ideas of these investment firms are not the most popular picks among them, which are invariably large cap companies, but rather their small cap picks. Based on these findings we developed a small cap strategy, based on the most popular small-cap picks among over 700 funds. This strategy has beaten the S&P 500 ETF (SPY) by a staggering 79.4 percentage points since August 2012 through March 2015 and returned 132% during that period.
Of all the companies on this list, Apple Inc. (NASDAQ:AAPL) has appreciated the most, with the stock gaining some 65% over the last 52 weeks. The company’s new range of iPhones sold like wildfire and the recent release of Apple Watch could send the stock even higher. The $733.34 billion company is also in talks with media and entertainment companies as it is gearing up to launch its web TV service in fall this year.
Carl Icahn owns some 52.76 million shares of Apple Inc. (NASDAQ:AAPL) valued at $5.82 billion, according to his last 13F filing. The notorious activist investor initiated a stake in 2013 and urged the company to return more capital to shareholders through dividends and buybacks. Apple has been one of the most popular companies among over 700 hedge funds that we track; during the fourth quarter 149 funds had parked some $20.88 billion in the company as compared to 154 funds with $22.5 billion in the previous quarter. Another billionaire investor Ken Fisher’s Fisher Asset Management also holds a sizable stake consisting of 10.76 million shares valued at $1.19 billion.
With 4.4 million shares, valued at $457.34 million, Alibaba Group Holding Ltd (NYSE:BABA) formed the largest stake of George Soros’ Soros Fund Management. Among 59 billionaires that we track, 15 had investments totaling $4.45 billion in the e-commerce juggernaut towards the end of 2014. Dan Loeb’s Third Point also had a major stake in the $211.92 billion company with 10 million shares valued at $1.04 billion.
After Alibaba Group Holding Ltd (NYSE:BABA)’s September IPO last year, the stock reached an all time high of $119 in November. However, the stock is down by some some 9.5% since its public offering amid disappointing fourth quarter financial results. On Friday, JP Morgan analyst Alex Yao cut Alibaba Group Holding Ltd (NYSE:BABA)’s price target to $109 from $117 while maintaining an overweight rating. Moreover, Alibaba’s first lock-up period is about to expire, which will allow insiders to sell some 437 million shares.
Billionaire Leon Cooperman’s largest bet represented by his stake in Actavis plc (NYSE:ACT) also paid off big time as the stock appreciated by a hefty 57% over the last 52 weeks. Cooperman’s Omega Advisors initiated a stake in the $120.12 billion pharmaceutical company during the first quarter of 2014 and according to the last filing the stake contains some 943,600 shares valued at $242.88 million. Just last week, Actavis plc (NYSE:ACT) completed its acquisition of the Botox-maker Allergan for $66 billion in cash and stock. The new pharmaceutical company is expected to generate $23 billion in revenues this year. Among the funds that we track, Andreas Halvorsen’s Viking Global held the highest stake in the company totaling 4.59 million shares valued at $1.18 billion.
General Motors Company (NYSE:GM) was the largest holding of David Tepper’s Appaloosa Management as the fund held some 14.67 million shares valued at $512.44 million. Despite being hit by safety recalls costing nearly $4.0 billion during 2014, the $$62.59 billion auto and truck manufacturer is up by about 10% over the last 52 weeks. Just last week, General Motors Company (NYSE:GM) announced yet another recall, this time involving 50,249 Chevrolet Volts manufactured during 2011 and 2013 owing to carbon monoxide buildup. GM is still one of the favorite automaker stocks among hedge funds.Warren Buffet’s Berkshire Hathaway held the largest stake in the company amounting to 41 million valued at $1.43 billion as of the latest filing.
Jim Simons’ Renaissance Technologies held some 12.58 million shares of Colgate-Palmolive Company (NYSE:CL) valued at $870.09 million at the end of the fourth quarter. The company operating in two product segments namely oral, personal and homecare, and pet nutrition, recently announced a $5 billion share repurchase program that is expected to last for the next 3 to 4 years. Moreover, Colgate-Palmolive Company (NYSE:CL) has also recently increased its quarterly dividend to $0.38 from $0.36. The stock is up by about 9.5% over the last year. Jean-Marie Eveillard’s First Eagle Investment Management slightly increased its stake in the company to 4.83 million shares valued at $334.36 million during the fourth quarter.
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