Billionaires Are Piling Into These Five Stocks

The reason a small number of investors are able to consistently generate outsized returns when most investors fail to beat even the benchmark indices is because those successful investors identify opportunities available in the market well ahead of the crowd. That’s why at Insider Monkey we constantly track the moves made by  funds managed or founded by billionaire investors, because the wealth these investors have accumulated over the years is in itself a testament to their stock-picking abilities.

Even though there is no guarantee that if a stock is backed by billionaire investors or prominent hedge funds, it will outperform the market, our research shows that it usually does. Therefore, we regularly scan the portfolios of billionaire investors covered in our database, in order to identify the stocks they are bullish on and share them with our readers. Having said that, in this post, we will take a look at five stocks that saw the maximum increase in popularity during the first quarter among billionaire investors covered by us.

We track prominent investors and hedge funds because our research has shown that historically their stock picks delivered superior risk-adjusted returns. This is especially true in the small-cap space. The 15 most popular small-cap stocks among a select group of investors delivered a monthly alpha of 80 basis points between 1999 and 2012 (see the details here).

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#5 Philip Morris International Inc. (NYSE:PM)

– Billionaires with long positions (as of March 31): 7

– Aggregate value of billionaires’ holdings (as of March 31): $414.68 million

The number of billionaire investors covered by us long Philip Morris International Inc. (NYSE:PM) increased by five and the aggregate value of their holding in it increased by 177% during the first quarter. Billionaire Jim Simons‘ Renaissance Technologies increased its stake in the company by 103% to 804,500 shares during that period. After trading in a range for more than 4 years, shares of the cigarette manufacturer broke above it earlier this year and is currently 14% in the green year-to-date and boasts an attractive annual dividend yield of 4.07% at current prices. Following the Brexit vote, Philip Morris’ stock took a hit and lost over 4% as investors became concerned about the company’s exposure to the European Union market and its top line could face currency headwinds due to a decline in pound and euro. For the second quarter, Philip Morris reported EPS of $1.15, missing the estimates of $1.20, while its revenue slid by 3.1% on the year to $6.65 billion and was also slightly lower than expected. The company cited unfavorable currency as a reason for revenue decline and said it is likely to affect its full-year results.

#4 Gaming and Leisure Properties Inc (NASDAQ:GLPI)

– Billionaires with long positions (as of March 31): 8

– Aggregate value of billionaires’ holdings (as of March 31): $231 million

Next up on our list is Gaming and Leisure Properties Inc (NASDAQ:GLPI), which also saw its ownership among billionaire investors covered by us rising by five during the first quarter. However, the aggregate value of their holdings in it increased by 220%  during that time. Billionaires’ firms that increased their stake in the company during the first quarter included George Soros‘ Soros Fund Management, which upped its holding by 31% to 1.8 million shares. Unlike the stock of most other REITs, Shares of Gaming and Leisure Properties Inc (NASDAQ:GLPI) have performed well this year and currently trade up by 29% year-to-date. The Pennsylvania-based REIT currently pays a quarterly dividend of $0.56, which based on its last trading price translates into an annual dividend yield of 6.24%.

#3 Fidelity National Information Services (NYSE:FIS)

– Billionaires with long positions (as of March 31): 12

– Aggregate value of billionaires’ holdings (as of March 31): $786 million

Looking at the 17% rise that Fidelity National Information Services (NYSE:FIS)’s stock has seen in the second quarter and the 31% year-to-date gain, it seems that billionaire investors already had an inclination that the stock will be performing well. During the first quarter, the number of billionaire investors covered by us with long positions in the financial services technology company rose by five and the aggregate value of their holdings in it swelled by 80%. Funds that initiated a stake in the company during that period included billionaire Larry Robbins‘ Glenview Capital, which purchased slightly over 1 million shares. On July 26, Fidelity National Information Services (NYSE:FIS) reported its results for the second quarter, declaring EPS of $0.90, which topped the estimates of $0.87, while revenue of $2.31 billion missed analysts’ expectations by $20 million.

#2 Progressive Corp (NYSE:PGR)

– Billionaires with long positions (as of March 31): 8

– Aggregate value of billionaires’ holdings (as of March 31): $331.1 million

Moving on, the ownership of Progressive Corp (NYSE:PGR) among billionaire investors tracked by our team rose by six and the aggregate value of their holdings in it saw an almost six-fold increase during the first quarter. Nevertheless, there were also a few billionaire-led hedge funds like Lee Ainslie’s Maverick Capital that sold their entire stake in the company during that period.  Progressive Corp (NYSE:PGR)’s stock ended the first quarter with a decent gain of 13.75%, but has given up most of those gains and is currently less than 3% in the green year-to-date. For the second quarter, Progressive Corp posted in-line EPS of $0.33, while its revenue of $5.93 billion went up by 13% on the year and topped estimates by around $180 million.

#1 AMETEK, Inc. (NYSE:AME)

– Billionaires with long positions (as of March 31): 8

– Aggregate value of billionaires’ holdings (as of March 31): $385.24 million

AMETEK, Inc. (NYSE:AME) was the stock that saw the kargest increase in its popularity during the first quarter among billionaire investors tracked by us with the number of funds with long positions increasing seven and the aggregate value of their holdings surged by 178%. Interestingly, it is also the only stock in this list that is trading in the red for 2016, down by 12.56% year-to-date. A large part of the decline it has seen this year came after the company reported lower-than-expected revenue for the first quarter at the end of April.  Billionaire Mario Gabelli’s GAMCO Investors was one of the hedge funds that lowered its stake in AMETEK, Inc. (NYSE:AME) during the first quarter, by 3% to 2.52 million shares.

Disclosure: None