Billionaire Ken Fisher’s Top Stock Picks Heading Into 2019

Fisher Investments is a fee-only investment adviser that was founded by billionaire Ken Fisher in 1979. Ken Fisher followed in his father Phil’s footsteps as a renowned investor and author, as he penned a 32-and-a-half year column for Forbes magazine and has written several bestselling books. Ken Fisher currently serves as the Executive Chairman and Co-Chief Investment Officer of Fisher Investments, which has over $100 billion in assets under management. We shared Fisher Asset Management’s estimated returns in an article a year ago. Our calculations show that investors would have outperformed the S&P 500 Index by an average of 3 percentage points per year over the last 4 years by replicating Ken Fisher’s 13F holdings that have a market cap of at least $1 billion. His stock picks don’t kill the market but generated better returns than Warren Buffett (see our free report about Warren Buffett at the bottom of this page) over this period.

In an April interview on CNBC, Fisher said that it would take something major to occur which the market had not accounted for before the long-running bull market, which had stretched into a 10th year coming into 2018, came to an end. Fisher quoted fellow investing legend and billionaire Sir John Templeton, who said “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria”. Fisher believed the market was currently in the optimism phase, but still a long way from euphoria.

However, that bull run may have technically come to an end in late October, though it hasn’t widely been reported as such. More than 57% of stocks in the S&P Composite 1500 were at least 20% off their 52-week-highs at one point during October 29, the 20% figure being the definition of a bear market. If that becomes the widely accepted version of events, then we are currently enjoying a new, 2-week long bull market. Long may it reign.

Hedge funds certainly felt the sting of the stealth bear market of October, as according to data from Hedge Fund Research, hedge funds suffered their worst month in 7 years. Equity funds lost 4.7% during the month, while activist funds fared even worse, declining by 5.43%. If Fisher Investments suffered such a fate, that would equate to a lot of value being wiped out. Fisher Investment’s 13F portfolio as of September 30 contained $82.37 billion in holdings.

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Fisher does not completely heed the words his father wrote in his 1959 book Common Stocks and Uncommon Profits, in which he said the best time to sell a stock was “almost never”. Fisher Investments did sell out of 70 stocks during Q3 according to its latest 13F filing with the SEC, while opening new positions in 79. However, among Fisher’s top 20 holdings are numerous positions which have held for nearly two decades or more. Fisher also loves dividend stocks, with a high percentage of his top 50 stock picks paying out dividends with annual yields of 2.8% and higher. Check out our list of Billionaire Ken Fisher’s Favorite Dividend Stocks for some of his favorites.

Below and on the following pages, we’ll count down the top 20 holdings found in the 13F portfolio of billionaire Ken Fisher’s Fisher Investments as of September 30.

20. PepsiCo, Inc. (NASDAQ:PEP)

– Shares Owned by Fisher Asset Management (as of September 30): 6.66 million
– Value of Fisher Asset Management’s Holding (as of September 30): $744.39 million

Fisher has owned PepsiCo, Inc. (NASDAQ:PEP) dating all the way back to the third quarter of 2001, a halcyon time for the soft drink industry before sugar and sweeteners would become public enemy #1 in the world of eating (and what a forlorn world it is without sugar). Pepsi has done plenty to grow and diversify to meet those challenges head on, and Fisher has remained along for the ride, buying another 161,821 shares in Q3.

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19. UBS Group AG (NYSE:UBS)

– Shares Owned by Fisher Asset Management (as of September 30): 48.05 million
– Value of Fisher Asset Management’s Holding (as of September 30): $756 million

Shares of Swiss investment bank UBS Group AG (NYSE:UBS) have resided in the 13F portfolio of Fisher Investments since the final quarter of 2014. Fisher Investments was by far the biggest UBS bull among the 15 institutional investors tracked by Insider Monkey’s database which owned the stock on June 30, owning more shares than the other 14 combined. Fisher bought another 1.59 million UBS shares in Q3.

18. Tencent Holdings Limited (OTCMKTS:TCEHY)

– Shares Owned by Fisher Asset Management (as of September 30): 18.90 million
– Value of Fisher Asset Management’s Holding (as of September 30): $781 million

Fisher Investments added 576,931 Tencent Holdings Limited (OTCMKTS:TCEHY) shares to its 13F portfolio in Q3, a 3% increase quarter-over-quarter. Ken Fisher is extremely bullish on several Chinese and Asian stocks, with four of them ranking among Fisher Investments’ top 20 holdings. In a USA Today column published at the end of September, Fisher recommended always buying stocks when China fears are weighing them down.

17. The Procter & Gamble Company (NYSE:PG)

– Shares Owned by Fisher Asset Management (as of September 30): 10.04 million
– Value of Fisher Asset Management’s Holding (as of September 30): $835 million

Fisher Investments has been holding The Procter & Gamble Company (NYSE:PG) shares since at least 1999 and bought another 191,374 of them during Q3. Procter & Gamble’s stock has stalled over the last four years, which Ken Fisher has suggested is the result of millennials craving new micro-brands that are different from the established products used by their parents (so uncool). Fellow billionaire Nelson Peltz has gone a step further in the past, saying that Procter should split into several companies that focus on pushing out such new and trendy brands.

16. The Home Depot, Inc. (NYSE:HD)

– Shares Owned by Fisher Asset Management (as of September 30): 4.45 million
– Value of Fisher Asset Management’s Holding (as of September 30): $921 million

The Home Depot, Inc. (NYSE:HD) shares have been owned by Fisher Investments since the first quarter of 2012, and the investment adviser added another 119,507 shares to that holding during the September quarter. Home Depot shares have fallen by over 10% since September 17 but have still posted gains of 15% this year. The home improvement retailer may feel the impact of a slowing housing market in its Q3 results, which are expected to be released next Tuesday. Otherwise, Home Depot has continued to excel, posting a comps gain of 8% in the second quarter.

15. Walmart Inc. (NYSE:WMT)

– Shares Owned by Fisher Asset Management (as of September 30): 9.93 million
– Value of Fisher Asset Management’s Holding (as of September 30): $933 million

This is another long time holding of Ken Fisher’s, dating back to at least 1999. For a lengthy stretch of that time, Walmart Inc. (NYSE:WMT) shares didn’t do a whole lot; in fact, they were essentially flat during a 12-year stretch from August 1, 1999 to August 1, 2011. They’ve finally broken out somewhat since then, nearly doubling in value over the past 7+ years. Fisher Investments added 323,377 Walmart shares to its 13F portfolio in Q3.

14. Cisco Systems, Inc. (NASDAQ:CSCO)

– Shares Owned by Fisher Asset Management (as of September 30): 20.10 million
– Value of Fisher Asset Management’s Holding (as of September 30): $978 million

Fisher Investments hiked its Cisco Systems, Inc. (NASDAQ:CSCO) position by 11% in Q3, to just over 20 million shares. The company was owned by 49 of the hedge funds in our system on June 30, down from 54 at the start of April. Cisco is one of the rare tech stocks that makes fairly sizable dividend payments to shareholders every quarter, with shares yielding 2.90%.

13. TOTAL S.A. (NYSE:TOT)

– Shares Owned by Fisher Asset Management (as of September 30): 16.29 million
– Value of Fisher Asset Management’s Holding (as of September 30): $1.05 billion

TOTAL S.A. (NYSE:TOT) is one of the newer additions to Fisher Investments’ 13F portfolio, being added during the first quarter of this year, and it’s quickly skyrocketed into the firm’s top 20 holdings. Fisher hiked its position in the stock by 15.76 million shares in Q3, a 2,993% increase to push the value of the holding past $1 billion. On June 30, just $78.42 million worth of Total S.A. shares were held by the hedge funds tracked by our database, a figure which will now jump considerably once we have the full hedge fund ownership data for September 30 (which will be in the middle of November).

12. American Express Company (NYSE:AXP)

– Shares Owned by Fisher Asset Management (as of September 30): 10.36 million
– Value of Fisher Asset Management’s Holding (as of September 30): $1.10 billion

Fisher Investments added another 246,871 American Express Company (NYSE:AXP) shares to its portfolio in Q3, a small increase to the position it has owned since the second quarter of 2012. Ken Fisher is clearly bullish on the future of credit card and payment processing companies, as American Express rival Visa is also among his top 20 holdings. American Express has been granted preliminary approval to set up a payments network in China, which it will tackle together with Chinese partner LianLian Group.

11. SoftBank Group Corp. (OTCMKTS:SFTBY)

– Shares Owned by Fisher Asset Management (as of September 30): 22.34 million
– Value of Fisher Asset Management’s Holding (as of September 30): $1.13 billion

Fisher Investments has held a long position in SoftBank Group Corp. (OTCMKTS:SFTBY) since the first quarter of 2017. The investment firm bought another 669,953 shares of the Japanese holding company, which has been subjected to controversy for its role in funneling money from Saudi Arabian investors into Silicon Valley following the killing of journalist Jamal Khashoggi inside a Saudi Arabian consulate in Turkey in early October.

10. Intel Corporation (NASDAQ:INTC)

– Shares Owned by Fisher Asset Management (as of September 30): 24.16 million
– Value of Fisher Asset Management’s Holding (as of September 30): $1.14 billion

Ken Fisher’s investment firm has owned Intel Corporation (NASDAQ:INTC) since at least 1999, smack dab in the middle of the dot-com bubble. Between June 1998 and June 2002, Intel shares would more than quadruple in value and then give back all of those gains. In the more than 16 years since, they have still failed to reach their heights during that historic bubble. Fisher Investments bought a net total of 720,022 shares of Intel in Q3.

9. Alphabet Inc. (NASDAQ:GOOGL)

– Shares Owned by Fisher Asset Management (as of September 30): 1.27 million
– Value of Fisher Asset Management’s Holding (as of September 30): $1.53 billion

Fisher owns 1.27 million of Alphabet Inc. (NASDAQ:GOOGL)’s Class A voting shares as of September 30 after buying another 40,770 of them in Q3. Fisher also owns a small stake (222,310 shares) in Alphabet’s Class C non-voting shares. Alphabet’s shares have more than tripled in value since Fisher Investments first opened its position towards the end of 2007.

8. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)

– Shares Owned by Fisher Asset Management (as of September 30): 35.14 million
– Value of Fisher Asset Management’s Holding (as of September 30): $1.55 billion

Fisher Investments has owned Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) since the second quarter of 2003, during which time shares have more than quadrupled in value. The investment firm added another 952,889 TSM shares to its holding in Q3, pushing it past 35 million. Due to many hedge funds’ domestic focus, only 34 owned shares of the $194 billion company on June 30.

7. Johnson & Johnson (NYSE:JNJ)

– Shares Owned by Fisher Asset Management (as of September 30): 11.26 million
– Value of Fisher Asset Management’s Holding (as of September 30): $1.56 billion

Johnson & Johnson (NYSE:JNJ) was the only stock among Fisher Investments’ top 20 holdings that the firm sold shares of during Q3, unloading 1.86 million of them, which represented a 14% decrease quarter-over-quarter. JNJ lost a recent patent battle over prostate cancer treatment Zytiga, the sales of which could now decline by 50% in Q4 according to Morgan Stanley, due to competition from new generics.

6. Pfizer Inc. (NYSE:PFE)

– Shares Owned by Fisher Asset Management (as of September 30): 40.48 million
– Value of Fisher Asset Management’s Holding (as of September 30): $1.78 billion

Pfizer Inc. (NYSE:PFE) is another of Ken Fisher’s oldest holdings, dating back to at least 1999. Pfizer shares haven’t done all that much during that time and had lost well over half their value by the mid-2000’s, but Fisher held on to them and has happily collected the stock’s 3%+ dividend yield, which it has carried for over 12 years. Fisher Investments added 1.03 million shares of Pfizer to its 13F portfolio in Q3.

5. Alibaba Group Holding Limited (NYSE:BABA)

– Shares Owned by Fisher Asset Management (as of September 30): 11.01 million
– Value of Fisher Asset Management’s Holding (as of September 30): $1.81 billion

Alibaba Group Holding Limited (NYSE:BABA) ranks as Fisher Investments’ favorite Chinese stock, as the investment firm has built a $1.81 billion position in it since the second quarter of 2015, aided by the purchase of another 40,761 shares in Q3. Alibaba’s on-demand online services division is now valued at $30 billion according to Reuters sources. Ele.me, which was combined with Koubei to form the new unit, had over 167 million customers between the middle of 2017 and the middle of 2018.

4. Microsoft Corporation (NASDAQ:MSFT)

– Shares Owned by Fisher Asset Management (as of September 30): 18.77 million
– Value of Fisher Asset Management’s Holding (as of September 30): $2.15 billion

Ken Fisher has been a longtime bull of Microsoft Corporation (NASDAQ:MSFT), dating back to at least 1999 (as far back as the SEC’s online records go). As with his investment in Walmart, this one didn’t produce much in the way of returns for over a decade. The last five years have been a different story, with shares more than tripling in value. Fisher Investments added 444,758 Microsoft shares to its position in Q3.

3. Visa Inc. (NYSE:V)

– Shares Owned by Fisher Asset Management (as of September 30): 18.09 million
– Value of Fisher Asset Management’s Holding (as of September 30): $2.71 billion

Fisher Investments added a total of 401,700 Visa Inc. (NYSE:V) shares to its 13F portfolio in Q3, pushing the holding past 18 million shares. Visa ranked 8th on our countdown of the 25 Most Popular Stocks Among Hedge Funds in 2018, being owned by 109 of the funds tracked by our system. Visa certainly appears to be the kind of holding that could appeal to just about any fund, having huge market share in the U.S and a huge growth opportunity in developing markets, as 85% of the world’s transactions are still conducted via cash.

2. Apple Inc. (NASDAQ:AAPL)

– Shares Owned by Fisher Asset Management (as of September 30): 12.35 million
– Value of Fisher Asset Management’s Holding (as of September 30): $2.79 billion

Landing in the penultimate position among Ken Fisher’s top 20 holdings is Apple Inc. (NASDAQ:AAPL), which the billionaire’s investment vehicle has held since the last quarter of 2005. Fisher Investments added another 189,423 shares to that position in Q3, lifting its value to $2.79 billion. Apple no longer has a $1 trillion market cap, as shares have dipped by nearly 8% since September 24, though it maintains a sizable $100 billion+ market cap lead over the final stock on our list.

1. Amazon.com, Inc. (NASDAQ:AMZN)

– Shares Owned by Fisher Asset Management (as of September 30): 1.57 million
– Value of Fisher Asset Management’s Holding (as of September 30): $3.14 billion

Closing out the list of Billionaire Ken Fisher’s Top Stock Picks Heading Into 2019 is Amazon.com, Inc. (NASDAQ:AMZN). Fisher Investments has built a position valued at more than $3 billion since first opening it in the first quarter of 2011, which includes buying another 6,027 shares in Q3. Amazon’s exhaustive search to find a prime (cough) location for its second headquarters appears to have ended with two winners: New York City and Washington D.C (or close enough).

Disclosure: None