Billionaire investors represent a special caste of the hedge fund industry. Always in the spotlight, widely followed and capable of sparking big moves in stock prices by just mentioning the mere name of a company, billionaires are admired for their knowledge and expertise regarding individual instruments as well as the economy in general. Investing in a stock that has a billionaire investor betting on it is an almost certain way to secure your portfolio. But how about a stock that has 15 billionaires betting on it? Among our list of over 730 elite funds, around 40 are managed by billionaires or were founded by billionaires that have since retired. We follow closely the stocks they disclose in their quarterly 13F filings and in this article we are going to focus our attention on three tech stocks that ranked as the most popular among billionaires.
We follow billionaires and other investors as part of our small-cap strategy, which involves imitating the 15 most popular small-cap picks among the funds from our database. The strategy is based on extensive analysis of 13F filings between 1999 and 2012 and it has returned 102% since it went live in August 2012, beating the S&P 500 ETF (SPY) by some 53 percentage points during this period (see more details here).
On the first spot is Apple Inc. (NASDAQ:AAPL), which is not really surprising, since its the largest company in terms of market capitalization and over the years managed to grow its stock price alongside strong financial results and the release of products that quickly captured the attention of consumers. Investors also like Apple, partly because of its $200 billion pile of cash that the company generously distributes to shareholders through dividends and stock buybacks. The stock is also cheap, trading at around 12-times earnings, below the S&P 500’s average of 17. The company has some issues such as its dependency on a single product, the iPhone, which amasses the largest share of its revenues. The slowdown of the Chinese economy, which is Apple Inc. (NASDAQ:AAPL)’s second-largest market has put some pressure on the company as well, but these issues are most likely short-term. One of the biggest fans of Apple is Carl Icahn, who owns 52.73 million shares of the company as of the end of June. Billionaire David Einhorn, who manages Greenlight Capital, also has a significant amount invested in Apple Inc. (NASDAQ:AAPL), the company representing one of Greenlight’s largest holdings, as stated in its latest letter to investors. Overall, 15 billionaires reported holding around $12.16 billion worth of Apple’s shares in the previous round of 13F filings. The stock fell by 12% in the third quarter, but is still 8% in the green year-to-date.
Read on to see two other tech stocks that billionaires are bullish on.
In Alphabet Inc (NASDAQ:GOOGL)‘s class A stock, 15 billionaires reported long positions worth $3.40 billion. Additionally, 15 billionaire investors held shares of Alphabet’s class C stock. The company has recently reorganized itself under the Alphabet monker, and its next financial results will shed more light on some of the company’s modified operations. Meanwhile, yesterday Alphabet Inc (NASDAQ:GOOGL) released the results for its third quarter while still under its old operating structure, delivering 13% annual growth in revenue to $18.68 billion, as well as adjusted income of $7.35 per share, versus $6.25 reported a year earlier. Both classes of Alphabet Inc (NASDAQ:GOOGL)’s stock gained around 18% during the third quarter, which definitely pleased the billionaires that held shares. In the current round of 13F filings, billionaire Ken Fisher‘s Fisher Asset Management has reported ownership of 915,200 shares of class A stock and 523,600 class C shares, held at the end of September.
Facebook Inc (NASDAQ:FB) was slightly more popular among billionaire investors, as 16 funds reported long positions in the company as of the end of June. They held positions worth $2.95 billion at the end of the second quarter, while the stock gained 5% in the following three months. Since its IPO, Facebook Inc (NASDAQ:FB) has become much more than just a company that operates the largest social networking platform. Its acquisitions of Instagram and WhatsApp are paying off nicely and it is even diversifying in search, as it has recently indexed some two trillion posts, which will allow users to search for particular topics posted since the website’s inception. This last move will put Facebook in competition with Alphabet’s Google division and is also considered an attack on Twitter Inc (NYSE:TWTR)’s own recently-launched Moments, which allows browsing the biggest stories on a particular day. Ken Fisher is also betting on Facebook Inc (NASDAQ:FB), holding 311,100 shares of it as of the end of September. Stephen Mandel and Israel Englander are two other billionaires that held large stakes in Facebook, according to their 13F filings for the second quarter.
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