Top 5 Most Popular Stocks Among Financial Advisors Last Week

Looking for a stock to buy? Of course, you are not going to buy any stock out there. To say that the stock selection process is cumbersome and time consuming is an understatement. Truth be told, there is a massive number of stocks to choose from, so most investors need to find a way of narrowing down their research. For that reason, the Insider Monkey team compiled a list of five most searched stocks by financial advisors during the previous trading week. Although recent research provided evidence that stock trades made in conjunction with a financial advisor failed to beat the broader market, it would still be worthwhile to take a look at which stocks these financially-educated individuals look for. The data was obtained from TrackStar, which is the official newsletter of InvestingChannel’s division, Intuition. So let’s proceed with the discussion of the recent developments of the five companies in question.

Prior to discussing the aforementioned five stocks, let’s make you familiar with what Insider Monkey does besides providing high-quality articles. We also track hedge funds and prominent investors 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 50 most popular large-cap stocks among hedge funds had a monthly alpha of about six basis points per month between 1999 and 2012; however the 15 most popular small-cap stocks delivered a monthly alpha of 80 basis points during the same period. This means investors would have generated 10.0 percentage points of alpha per year simply by imitating hedge funds’ top 15 small-cap ideas. We have been tracking the performance of these stocks since the end of August 2012 in real time and these stocks beat the market by 53 percentage points (102% return vs. the S&P 500’s 48.7% gain) over the last 38 months (see the details here).

#5 Exxon Mobil Corporation (NYSE:XOM)

The world’s largest publicly-traded international oil and gas company has seen its shares drop nearly 14% this year, mainly owing to the lower crude oil prices. At the end of October, Exxon Mobil Corporation (NYSE:XOM) reported earnings of $4.2 billion for the third quarter, compared with $8.1 billion reported last year. This decrease in earnings shows the extent to which the low-oil-price environment has impacted Exxon over the past several months. Earlier this week, the U.S. Energy Information Administration (EIA) released its weekly petroleum status report, which revealed that the U.S. commercial crude inventories swelled by 1.2 million barrels last week to 489.4 million barrels. Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC)’s policy meeting kicks off on Friday in Vienna, which will surely discuss possibilities of market intervention to drive up oil prices. Donald Yacktman’s Yacktman Asset Management cut its position in Exxon Mobil Corporation (NYSE:XOM) by 2% during the June-to-September period, ending the quarter with 5.89 million shares.

#4 Facebook Inc. (NASDAQ:FB)

Facebook Inc. (NASDAQ:FB) has greatly outperformed the broader market in 2015, and numerous financial services hubs believe that the stock will achieve the same success in 2016. Facebook’s audience size influences its ability to charge advertises, and the tech giant has been very successful in increasing its user base over the past several years. In fact, the platform’s monthly active users at the end of September totaled 1.55 billion, which marked an increase of 14% year-on-year. Nevertheless, some investors are worried about higher spending in the next fiscal year, but Facebook’s fast-increasing revenue from video ads and Instagram ads will most likely offset potential higher levels of spending. Earlier this week, Facebook’s founder Mark Zuckerberg announced the birth of his daughter Max, along with his decision to pledge almost all his Facebook stock to charity over the course of his life. Meanwhile, the stock is up 36% for the year, while analysts’ price targets give the stock an upside of at least 13%. Stephen Mandel’s Lone Pine Capital holds a stake of 10.70 million shares in Facebook Inc. (NASDAQ:FB) as of September 30.

#3 Gilead Sciences Inc. (NASDAQ:GILD)

Another frequently-searched stock among financial advisors last week was Gilead Sciences Inc. (NASDAQ:GILD). In July of 2014, the research-based biopharmaceutical company received a letter from the U.S. Senate Committee on Finance asking information and documentation in connection with the company’s Hepatitis C drug Sovaldi and the pricing of this drug. Earlier this week, the Committee released the finding from the 18-month investigation into the pricing of Sovaldi and its more expensive successor Harvoni, suggesting that Gilead hunted profits at patient expense. The market did not react overly negative to the freshly-released report, as some analysts believe that this report “has more bark than bite” given that the committee did not present a legislative solution. The shares of Gilead have advanced 9% this year and are trading at an eye-catching trailing price-to-earnings ratio of 9.56 (the ratio for the S&P 500 Index equals to 23.18). D.E. Shaw & Co. L.P., founded by David E. Shaw in 1988, owns 6.15 million shares of Gilead Sciences Inc. (NASDAQ:GILD) as of the end of the third quarter.

#2 Netflix Inc. (NASDAQ:NFLX)

The world’s leading Internet television network has seen its shares advance by a whopping 167% so far this year. Netflix Inc. (NASDAQ:NFLX)’s core growth strategy involves growing its streaming membership business worldwide, and the company has been successful in pursuing this strategy so far. Netflix’s third-quarter revenues from the domestic streaming segment totaled $1.06 billion, which denoted an increase of 21% year-over-year. This increase was mainly attributable to the 17% growth in the average of number of paid memberships and increase in average monthly revenue per membership due to pricing changes. Nevertheless, the strong U.S. dollar has negatively impacted Netflix’s financial performance this year, as most of its international revenues and only a minor share of its expenses are denominated in other currencies. Andreas Halvorsen’s Viking Global added a 4.52 million-share position in Netflix Inc. (NASDAQ:NFLX) during the third quarter.

#1 Apple Inc. (NASDAQ:AAPL)

Expectedly, Apple Inc. (NASDAQ:AAPL) was the most scrutinized stock by financial advisors last week. The shares of Apple are 5% in green year-to-date and are trading at a cheap trailing P/E ratio of 12.64. Some investors would claim that Apple has a fair valuation at the moment, as it seems to reflect the risks associated with Apple’s ability to continually design and introduce new products, services and technologies that can attract new customer demand. At the end of the day, Apple does not operate as an utility company that usually signs contracts for ten or more years to deliver the produced outcome. The majority already knows that Apple is currently working on its new iPhone, which will most likely provide evidence on whether the company is able to create new products that can appeal customers. Reportedly, Apple is testing at least five different iPhone models, but it remains to see whether the iPhone 7 will attract as much attention and demand as the previous models, and whether Carl Icahn’s prophecy of $240 per Apple share will be fulfilled. The billionaire activist investor owns 52.76 million shares of Apple Inc. (NASDAQ:AAPL) as of September 30.

Disclosure: None