Top 4 Broadest-Owned Tech Stocks as of the 4th Quarter

According to the Aggregated Portfolio of Gurus, a Premium feature of GuruFocus, the four most-broadly-held guru stocks within the technology sector are Microsoft Corp. (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL), Cisco Systems Inc. (NASDAQ:CSCO) and Oracle Corp. (ORCL).

Dow inches closer to 32,000 milestone level on economic recovery hopes

On Wednesday, the Dow Jones Industrial Average closed at 31,962.13, up 424.78 points from Tuesday’s close of 31,537.35 on the heels of investors piling onto companies sensitive to an economic comeback. The 30-stock index cracked above 32,000 at the intraday high, boosted partially by Chevron Inc. (NYSE:CVX), a stock Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway Inc. (NYSE:BRK.A)(NYSE:BRK.B) increased its holding in during the fourth quarter of 2020.

While technology stocks sold off earlier on the 10-year Treasury constant maturity rate topping 1.4{2e54b6599e2852fcddcb96c51aef71201c0435684ebd8fbda55b4c693aab2644}, the highest level since February of last year, the tech-heavy Nasdaq Composite Index finished up 0.99{2e54b6599e2852fcddcb96c51aef71201c0435684ebd8fbda55b4c693aab2644} for the day. CNBC added that Christopher Metli, a quantitative and derivative strategist at Morgan Stanley (NYSE:MS), said in a note that investors ought to buy dips in the equity market even during an environment with high volatility and high interest rates.

As such, investors may find opportunities in technology stocks that are most broadly held by gurus. The Most Broadly Held portfolio strategy has returned a cumulative 410.15{2e54b6599e2852fcddcb96c51aef71201c0435684ebd8fbda55b4c693aab2644} since its inception in 2006 and an annualized 15.65{2e54b6599e2852fcddcb96c51aef71201c0435684ebd8fbda55b4c693aab2644} per year over the past 10 years, compared to the Standard & Poor’s 500 index benchmark return of an annualized 11.49{2e54b6599e2852fcddcb96c51aef71201c0435684ebd8fbda55b4c693aab2644} per year over the past 10 years. Figure 1 reports the performance of the Most Broadly Held Portfolio compared to the benchmark.

Figure 1

Microsoft

Fifty-eight gurus have holdings in Microsoft (NASDAQ:MSFT) with a combined weight of 182.15{2e54b6599e2852fcddcb96c51aef71201c0435684ebd8fbda55b4c693aab2644}. The stock closed at $234.55, up approximately 1.28{2e54b6599e2852fcddcb96c51aef71201c0435684ebd8fbda55b4c693aab2644} from the previous close yet 33{2e54b6599e2852fcddcb96c51aef71201c0435684ebd8fbda55b4c693aab2644} above its GF Value of $175.77.

GuruFocus ranks the Redmond, Washington-based software giant’s profitability 8 out of 10 on several positive investing signs, which include a high Piotroski F-score of 8 and an operating margin that has increased approximately 4.3{2e54b6599e2852fcddcb96c51aef71201c0435684ebd8fbda55b4c693aab2644} per year on average over the past five years and is outperforming over 96{2e54b6599e2852fcddcb96c51aef71201c0435684ebd8fbda55b4c693aab2644} of global competitors.

Gurus with large holdings in Microsoft include Ken Fisher (Trades, Portfolio), Pioneer Investments (Trades, Portfolio) and PRIMECAP Management (Trades, Portfolio).

Apple

Thirty-four gurus have positions in Apple (NASDAQ:AAPL) with a combined weight of 110.88{2e54b6599e2852fcddcb96c51aef71201c0435684ebd8fbda55b4c693aab2644}. While shares declined 0.41{2e54b6599e2852fcddcb96c51aef71201c0435684ebd8fbda55b4c693aab2644} from the previous close, Apple’s stock is significantly overvalued based on Tuesday’s price-to-GF Value ratio of 1.66.

GuruFocus ranks the Cupertino, California-based consumer electronics giant’s profitability 8 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7 and operating margins that are outperforming over 95{2e54b6599e2852fcddcb96c51aef71201c0435684ebd8fbda55b4c693aab2644} of global competitors despite trending near a 10-year low of 24.15{2e54b6599e2852fcddcb96c51aef71201c0435684ebd8fbda55b4c693aab2644}.

Berkshire owns 887,135,554 shares of Apple as of the fourth quarter of 2020, down 6.05{2e54b6599e2852fcddcb96c51aef71201c0435684ebd8fbda55b4c693aab2644} from the third quarter. Despite this, Apple remains the insurance conglomerate’s top holding with a 43.61{2e54b6599e2852fcddcb96c51aef71201c0435684ebd8fbda55b4c693aab2644} equity portfolio weight.

Cisco Systems

Thirty gurus have holdings in Cisco Systems (NASDAQ:CSCO) with a combined weight of 35.92{2e54b6599e2852fcddcb96c51aef71201c0435684ebd8fbda55b4c693aab2644}. Shares traded around $45.74, showing that the stock is fairly valued based on Tuesday’s price-to-GF Value ratio of 0.96.

GuruFocus ranks the San Jose, California-based hardware company’s profitability 9 out of 10 on several positive investing signs, which include a five-star business predictability rank, a high Piotroski F-score of 8 and an operating margin that is near a 10-year high of 28.6{2e54b6599e2852fcddcb96c51aef71201c0435684ebd8fbda55b4c693aab2644} and outperforming over 96{2e54b6599e2852fcddcb96c51aef71201c0435684ebd8fbda55b4c693aab2644} of global competitors.

Oracle

Twenty-eight gurus have positions in Oracle (ORCL) with a combined weight of 26.48{2e54b6599e2852fcddcb96c51aef71201c0435684ebd8fbda55b4c693aab2644}. Shares traded around $64.70, showing that the stock is fairly valued based on Tuesday’s price-to-GF Value ratio of 1.01.

GuruFocus ranks the Redwood City, California-based software company’s profitability 9 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7 and profit margins that are outperforming over 95{2e54b6599e2852fcddcb96c51aef71201c0435684ebd8fbda55b4c693aab2644} of global competitors.

See also

According to Figure 2, several other stocks have more than 40 gurus owning shares, including interactive media giants Facebook Inc. (NASDAQ:FB) and Alphabet Inc. (NASDAQ:GOOGL)(GOOG), retail giant Amazon.com Inc. (AMZN) and major financial service institution Bank of America Corp. (BAC).

Figure 2

Disclosure: The author is long Apple. While Facebook and Alphabet are considered “Big Tech” companies, our data vendor has classified the two companies into the new “Communication Services” sector.

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