Rummage through the holdings of billionaire investors, and you're likely to find similar stocks occupying their portfolios. With so much money to invest, they can't take a meaningful position in a small business because they'd end up owning the whole thing outright, so their investments trend toward larger companies.
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Recently, personal-finance website WalletHub examined the most recent SEC disclosures filed by more than 400 hedge funds and billionaires, and it discovered that several stocks made repeat appearances among the top three holdings of some of the world's wealthiest investors. Following are eight stocks that a dozen billionaires thought highly enough of to invest in.
Both David Tepper's Appaloosa Management and John Paulson's Paulson & Co. seized upon Botox maker Allergan (NYSE: AGN) to puff up their portfolios. The drugmaker still realizes 20% of its revenues from the biologic, but it has used the proceeds from Botox sales to build up a portfolio of other drugs to bolster its bottom line. With the stock up only 8% year to date, these billionaires may be betting the 13% annual growth in earnings analysts are predicting for the next five years will offset any potential weaknesses it may face.
Tepper returns with Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL), which also shows up in the top spot in Leon Cooperman's Omega Advisors. The difference between the two positions is that Tepper owns the class of shares that have voting rights (GOOGL), while Cooperman owns those that don't (GOOG). But it's a distinction without a difference, really, since Alphabet founders own a third class of shares, class B, that have 10 times the voting power of the GOOGL Class A shares.
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You know Altaba (NASDAQ: AABA) even if you think you don't. It is the leftover business of Yahoo! after its operating business was sold to Verizon, and which currently operates as an asset-management firm overseeing a few investments. Both George Soros and his Soros Fund Management and Ray Dalio's Bridgewater fund thought there was plenty of value left in the newly minted Altaba to take significant stakes in it. In fact, Altaba was Soros' biggest investment in the second quarter.
It might be considered an odd pairing, but both Warren Buffett, the second richest person in the world, and David Einhorn of Greenlight Capital and the world's 1,376th richest, both hit on Apple (NASDAQ: AAPL) as an investment to make it into the top three positions in their portfolio. With a new iPhone 8 due out soon, an iteration that could very well break all sales records, it's likely that Apple stock occupies a position in more portfolios than just a few billionaires.
Soros and Dalio partner up again to acquire significant tranches of stock in Caesars Acquisition (NASDAQ: CACQ), which was formed as part of a complicated bankruptcy scheme by casino operator Caesars Entertainment to hold on to so-called "good assets." Both billionaires, however, seem to be betting that the two companies will join together once more, and with both sets of shareholders having approved the reunion, there only remains the regulatory hurdle to get over.
For the third time, Tepper's Appaloosa Management appears with an investment that matches that of another billionaire investor, this time Julian Robertson of Tiger Management fame, who also chose social networking platform Facebook (NASDAQ: FB). They may be eying the wealth of advertising potential still inherent in social media and from its leading player, which has come to dominate various forms of media. With analysts anticipating earnings to grow at 26% annually, it's a bet that can pay off big for them.
It might appear that Dalio and Soros are walking lockstep in their investments, as their respective top three holdings match each other's perfectly. The last stock, which shows up as the biggest holding for both of them, is Liberty Broadband (NASDAQ: LBRDK), the holding company that controls a diverse set of media assets, including Charter Communications. They may be betting big on Charter's launch of its own wireless service network as a means of differentiating itself in the world of cable and telecom.
It's not surprising that Nelson Peltz's Trian Partners owns such a large stake in global snack-foods giant Mondelez International (NASDAQ: MDLZ), since he was engaged in a battle with PepsiCo to calve off its drinks business and use the remaining Frito-Lay division to buy Mondelez. He also stopped pestering the snack-food company to change its name when he accepted a seat on the company's board of directors. A year later, though, Bill Ackman of Pershing Square Capital took up a $5.5 billion beachhead, with an eye cast on pushing for a takeover of the company. That both still have substantial investments in Mondelez indicates how much each still values the brand.
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The author(s) may have a position in any stocks mentioned.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Apple, Facebook, and Verizon Communications. The Motley Fool recommends Altaba Inc and PepsiCo. The Motley Fool has a disclosure policy.