Cisco Systems, Inc. (NASDAQ:CSCO) is another leading technology pick of Platinum Asset Management, which owns 8.46 million shares of the company with a market value of $232.90 million. The networking giant slightly outperformed market expectations of its quarterly revenue and earnings per share for its fiscal third quarter of 2015. Against market expectations of 4.5% growth in quarterly revenue, Cisco Systems, Inc. (NASDAQ:CSCO) reported 5% year-over-year growth with revenue of $12.1 billion. At the same time, the company announced non-GAAP earnings per share of $0.54 against the market estimates of $0.53. Despite the new makeover plans of the networking giant, its traditional networking segment was the largest contributor to its revenue. Value investor Donald Yacktman‘s Yacktman Asset Management is the largest shareholder of Cisco among the funds we track with nearly 49 million shares.
Neilson has positions in both the Class A and Class C shares of the world’s leading search engine company, Google Inc (NASDAQ:GOOG). In Google’s Class A stock he owns 374,840 shares with a market value of $205.41 million, while in the company’s Class C stock (NASDAQ:GOOGL) he owns 353,080 shares with a value of $195.85 million. Individually the positions rank sixth and seventh overall in his portfolio, though they collectively rank second behind only Neilson’s top pick Carnival Corp (NYSE:CCL), and rank as his top tech pick. In an announcement made today, the search engine giant will lower its cloud computing prices by 30% to accommodate the short-term needs of its customers. The company conveyed a desire to improve its cloud services instead of making money as its primary motive and said that this move would help the company grow its smaller-scale clientele. According to Google Inc (NASDAQ:GOOG), the price of its cloud computing services have dropped by 50% since the launch of Google Compute Engine in 2013. Billionaire Andreas Halvorsen of Viking Global owns the largest stake in Google among the investors we track, with large positions in both the company’s Class A and Class C shares.
Hedge funds and other big money managers like Neilson tend to have the largest amounts of their capital invested in large and mega-cap stocks like eBay and Google 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. The 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 (see the details).
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