Stocks the Smart Money Are Buying… and Selling

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Photo credit: DonkeyHotey

The following is an excerpt from 7 Stocks the Smart Money Loves… or Hates

It’s that time again. 45 days after the end of each quarter, large institutional money managers are required to disclose the stocks that they bought or sold during the quarter. While this is an annoying to the money managers (it’s a little like playing poker with your cards face up for the rest of the table to see), it’s great for the rest of us. We can peek over the shoulders of some of the greatest investors in history.

Now, I have to give the usual caveats. The 13-F reports provided to the SEC are a snapshot in time. There is no guarantee that the manager still owns the stock by the time we read the report. We also have no information about short positions or futures positions. So in reading the raw reports, we have no way of knowing if a manager is truly bullish on a particular stock or if that stock is simply a piece of larger hedge or pair trade.

But if you’re familiar with the trading styles of the managers you follow, you can generally have a pretty good idea of what their intentions are with a stock.

So with no more ado, here are five high-profile stocks the masters of the universe are buying… or selling.

I’ll start with iPhone maker Apple (APPL), which has become something of a punching bag for hedge fund titans. As Apple has struggled to grow in recent years, several big money investors have lost patience and moved on. Greenlight Capital’s David Einhorn sold 1.3 million shares last quarter, reducing his total by nearly 17%. Apple remains his largest single holding, however, at 12% of his portfolio.

Steve Cohen, Leon Cooperman and Jim Chanos also reduced their positions in Apple.

But interestingly, one very high-profile investor – Mr. Warren Buffett himself – made a large Apple purchase. Buffett raised his stake in Apple by more than 50%. Apple still remains a small position for Berkshire Hathaway at about 1% of the portfolio. But Buffett clearly likes what he sees, and his stake is growing.

I, for one, agree with Buffett here. Apple’s slow growth is mostly a result of impossible-to-top comps due to the unprecedented success of the iPhone 6. But as Apple’s sales cycle gets back to normal, you should see very steady growth in the years ahead. And as I wrote recently, yes, Apple’s cash hoard really is a sight to behold.

To read the rest of the article, please see: 7 Stocks the Smart Money Loves… or Hates

Disclosures: As of this writing, I am long AAPL.

Disclaimer: This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice. This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities nor is it intended to be investment advice. You should speak to a financial advisor before attempting to implement any of the strategies discussed in this material. There is risk in any investment in traded securities, and all investment strategies discussed in this material have the possibility of loss. Past performance is no guarantee of future results. The author of the material or a related party will often have an interest in the securities discussed. Please see Full Disclaimer for a full disclaimer.