Billionaires Can’t Live Without These 10 Stocks

At Insider Monkey, we track more than 700 elite hedge funds and use their combined wisdom to identify 15 exceptional small-cap stocks every quarter, which our backtesting and ongoing results show as having great potential to outperform the market. In the three years since our small-cap strategy went live, it has returned 118% and easily outpaced the market, by more than 60 percentage points over that 36 month period (read the details here).

Among the ranks of those 700+ funds are approximately 63 which are managed or were founded by billionaires. We share their specific brand of collective wisdom with our readers as well, as there is great interest in where these renowned and wealthy money managers are putting the bulk of their considerable riches. While we don’t necessarily recommend investors jump into many of these stocks, as the needs of billionaires are far different than those of the average investor, we do believe there is always value in tracking the investing sentiment of the true Wolves of Wall Street (no offense to Jordan Belfort).

In this article we’ll run through the ten stocks that have the greatest number of billionaires with noteworthy positions in them (positions valued at a minimum of $10 million) as of June 30. Note that we exclude stocks which are merger-arbitrage plays like Time Warner Cable Inc (NYSE:TWC) currently is, from lists like this, as ownership in those stocks tends to spike because of the various funds with a focus on special situations. These stocks no longer make for very interesting investments as they count down the days until their mergers are completed with limited movement in share value in most cases. Hostile takeovers on the other hand are a different beast altogether, as you’ll see on the forthcoming list.

Now then, let’s check out the list of the top ten stocks held by the billionaire investors tracked by Insider Monkey.

10. Microsoft Corporation (NASDAQ:MSFT)

• Billionaires with Long Positions (as of June 30): 14
• Aggregate Value of Billionaires’ Holdings (as of June 30): $7.14 billion

Billionaire ownership of Microsoft Corporation (NASDAQ:MSFT) was up by one during the second quarter, while the value of their holdings rose by more than $1.43 billion. While that wasn’t enough to place it in the top five tech stocks of billionaires, it was just enough to move it into the top ten overall. Microsoft had a strong second quarter, gaining nearly 10%, but is down in the third quarter, having taken a big hit amid the late-August market contraction. Billionaires Stephen Mandel of Lone Pine Capital and Ken Fisher of Fisher Asset Management were among the major billionaire shareholders of Microsoft Corporation (NASDAQ:MSFT), owning 26.60 million shares and 17.99 million shares respectively.

9. Perrigo Company Public Limited Company (NYSE:PRGO)

• Billionaires with Long Positions (as of June 30): 15
• Aggregate Value of Billionaires’ Holdings (as of June 30): $1.93 billion

Billionaire ownership in Perrigo Company Public Limited Company (NYSE:PRGO) rose substantially during the second quarter, as the company was on the receiving end of a takeover bid from Mylan NV (NASDAQ:MYL), which it rejected. Billionaire ownership was up by 11 and the value of their holdings gained almost $1.70 billion as they piled into the stock on the news. Perrigo continues to reject Mylan’s advances however, and its shares are off by more than 10% from when Mylan’s first offer was revealed, in early April. James Dinan of York Capital Management and Daniel S. Och of OZ Management were among the billionaires to take new positions in the stock during the second quarter.

8. Alibaba Group Holding Ltd (NYSE:BABA)

• Billionaires with Long Positions (as of June 30): 15
• Aggregate Value of Billionaires’ Holdings (as of June 30): $2.03 billion

While billionaire ownership in Alibaba Group Holding Ltd (NYSE:BABA) was up by one, the aggregate value of their holdings suffered a big drop of $832 million. The flight of capital is interesting given that shares declined only marginally in the second quarter, making it almost entirely due to billionaires selling shares. They appear to have timed their flight well, as the recent Chinese market meltdown and fears over the country’s slowing growth have put a great deal of pressure on the stock, which has fallen by over 20% in the third quarter. Andreas Halvorsen was one of the billionaires cutting ties with some of his shares, as his fund Viking Global cut its stake by 14% to 6.04 million shares.

7. Google Inc (NASDAQ:GOOG)

• Billionaires with Long Positions (as of June 30): 15
• Aggregate Value of Billionaires’ Holdings (as of June 30): $6.30 billion

Google Inc (NASDAQ:GOOG)’s Class C shares had 15 billionaire owners on June 30, while its Class A shares had 14. As there is overlap in the ownership, we’re simply taking the highest total, though the aggregate holdings are the combined stakes of billionaires in both classes of stock. That figure was up by $1.13 billion even though the stock declined slightly in the second quarter, and billionaire shareholders of the stock declined by two. Billionaires appear to have timed a collective move well again, as Google Inc (NASDAQ:GOOG) has had a big third quarter. Andreas Halvorsen owns big positions in both classes of Google’s stock.

6. Apple Inc. (NASDAQ:AAPL)

• Billionaires with Long Positions (as of June 30): 15
• Aggregate Value of Billionaires’ Holdings (as of June 30): $12.16 billion

Billionaires were quite bearish on Apple Inc. (NASDAQ:AAPL) in the second quarter, with ownership dropping by one and the value of their holdings falling by nearly $790 million despite a slight gain in Apple’s shares during that time. While Apple has made a nice rebound from the lows it hit during the market turmoil, it’s still down by about 10% in the third quarter. The iconic tech company’s recent event did little to spur investor adulation, just as the company’s revelation that it is on pace to break opening weekend iPhone sales records failed to do. Billionaire Carl Icahn remains one of the company’s staunchest supporters, while David Tepper showed renewed confidence in Apple Inc. (NASDAQ:AAPL) by re-opening a position a couple quarters after closing it.

5. Mylan NV (NASDAQ:MYL)

• Billionaires with Long Positions (as of June 30): 16
• Aggregate Value of Billionaires’ Holdings (as of June 30): $2.38 billion

The other half of the aforementioned takeover attempt, since-turned-hostile, Mylan NV (NASDAQ:MYL) was in the portfolios of ten more billionaires on June 30 than it was on March 31, while the value of their holdings was up by $1.29 billion. Like Perrigo Company Public Limited Company (NYSE:PRGO), Mylan has also fallen away from the heights its stock achieved shortly after the April bid, shedding more than 33% since late-April. It was revealed recently that despite fighting off the company’s bids, Perrigo chief Joe Papa acquired shares of Mylan in March. Billionaire John Paulson added 6.96 million shares to his Mylan holding in the second quarter, lifting it to 21.91 million shares.

4. Facebook Inc (NASDAQ:FB)

• Billionaires with Long Positions (as of June 30): 16
• Aggregate Value of Billionaires’ Holdings (as of June 30): $2.95 billion

Facebook Inc (NASDAQ:FB) enjoyed strong support among the investors we track during the second quarter, as it inched closer to Apple and Allergan PLC (NYSE:AGN) in overall hedge fund ownership. It also gained one more billionaire investor, while their positions increased in value by over $517 million. There’s a lot to like about Facebook’s potential revenue growth in the coming years as it finally begins to monetize WhatsApp and Instagram. Stephen Mandel and Ken Griffin of Citadel Investment Group were among the billionaires adding more shares of the social media behemoth to their arsenals.

3. Citigroup Inc (NYSE:C)

• Billionaires with Long Positions (as of June 30): 19
• Aggregate Value of Billionaires’ Holdings (as of June 30): $2.61 billion

Citigroup Inc (NYSE:C) is the only financial stock to make the list and makes a big jump above Facebook to firmly hold down third place. Billionaire ownership was up by one in the second quarter, though the value of their holdings dipped by over $375 million. After a strong performance in July, Citigroup’s stock suffered along with most others in late August and gave back all of its July gains and then some. Citigroup Inc (NYSE:C) CFO John Gerspach recently revealed that the financial services company’s third quarter trading revenue could slide by as much as 5%. Citigroup is a major holding of billionaires Ken Fisher, Ken Griffin, and Larry Robbins of Glenview Capital.

2. eBay Inc (NASDAQ:EBAY)

• Billionaires with Long Positions (as of June 30): 21
• Aggregate Value of Billionaires’ Holdings (as of June 30): $6.98 billion

eBay Inc (NASDAQ:EBAY) surprisingly landed at the top of billionaires’ list in terms of tech stocks, supplanting Google. Four more billionaire investors held the stock in their portfolios, a rather interesting development given its pending (at the time) spinoff of Paypal Holdings Inc (NASDAQ:PYPL). However, their collective holdings did decline in value by about $317 million while eBay’s shares were up slightly during that time, so the sentiment was not overly positive. There are a lot of concerns over eBay Inc (NASDAQ:EBAY)’s growth now, as its PayPal division was long its strongest component. User growth is slowing, up by just 5% in the second quarter from 14% gains a year ago. Auction listing sales are also plummeting as eBay continues to seemingly morph into just another marketplace overcrowded with common, bulk items. Carl Icahn and Daniel Och hold large positions in eBay, with Icahn’s valued at over $2.78 billion.

1. Allergan PLC (NYSE:AGN)

• Billionaires with Long Positions (as of June 30): 24
• Aggregate Value of Billionaires’ Holdings (as of June 30): $10.78 billion

Allergan PLC (NYSE:AGN) continues to dominate the rankings, being the top overall stock pick as well as the top pick of billionaires for the second straight quarter. Billionaire ownership did decline by two, while the aggregate value of their holdings was relatively flat, up by $259 million, while shares were also up slightly in that time. Allergan recently sold its generic drugs business for a cool $40.5 billion to Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA), which will allow it to focus on and expand its higher-margin branded drugs segment. John Paulson and Andreas Halvorsen are among the big shareholders of Allergan PLC (NYSE:AGN).

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