While it is eminently worthwhile to pour over the latest business news and SEC filings to find mega stocks for your portfolio, there are some sneaky ways to enhance your stock picking skills and maximize your returns.
One such way is to follow the lead of industry leaders. Hedge Funds employ the best brains and the latest techniques to pick stocks and we sifted through 13F filings to find two tech favorites of billionaire investors Ken Fisher and Steve Cohen
Fisher sees Cisco on growth path
Ken Fisher manages Fisher Asset Management and takes care of $35 billion. While Fisher is enamored with Pfizer Inc. (NYSE:PFE), its holding of Cisco Systems, Inc. (NASDAQ:CSCO) is also notable. Fisher has been adding to its long position in Cisco and it is now the fund’s third biggest position. The gamble seems to have paid off as Cisco Systems, Inc. (NASDAQ:CSCO) recently touched its new 52-week high and is riding the bull wave.
Cisco is clearly on a growth path as the company is growing not only organically but also through acquisitions. Its latest pick is Atlanta-based JouleX. The new acquisition will help Cisco Systems, Inc. (NASDAQ:CSCO) in adding energy management solutions to its portfolio.
Faiyaz Shahpurwala, senior vice president, Industry Solutions, said “JouleX’s technology will strengthen Cisco Services’ Smart Offerings and complements our evolving services strategy. It extends our ‘Internet of Things’ capabilities and is a good alignment to Cisco EnergyWise.”
The acquisition will be closed by the fourth quarter of the year and Cisco Systems, Inc. (NASDAQ:CSCO) agreed to pay $107 million in cash and incentives for the transaction. Earlier this year, the company acquired Ubiquisys and Intucell.
Investment thesis
Cisco Systems, Inc. (NASDAQ:CSCO) reported impressive financial numbers for its first quarter, blowing past consensus estimates. It has also started paying dividends and currently commands a dividend yield of nearly 3%. Apart from this, the company is also very investor friendly as it bought back more than $3 billion worth of its stock in the past 12 months. Cisco not only enjoys a good capital return, but is also a good candidate for income portfolios thanks to its impressive dividend yield and dividend growth rate.
Cisco Systems, Inc. (NASDAQ:CSCO)’s balance sheet is robust and the company is flush with funds. It is also innovating and trying to design new revenue streams by exploring newer venues like Software Defined Network solutions. Finally, the stock seems to be out of its long rut and is riding the bull wave. Any minor pullback is a good entry point for this stock.
Amazon.com, Inc. (NASDAQ:AMZN)’s diversified business strategy
Another tech stock favored by hedge fund managers is Amazon.com, Inc. (NASDAQ:AMZN).
Steve Cohen manages SAC Capital Advisers and has $14 billion worth of assets under management. In the last quarter, SAC Capital almost tripled its stake in the online retail company. Steve Cohen is not the only one endorsing Amazon, as the retail giant’s stock is among the stocks most favored by hedge fund honchos.
