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Summary

  • Fisher's 13F portfolio contains over 600 long equity positions, out of which 81 are new positions, and 262 positions have been increased during the quarter.
  • The total value of the equity portfolio went up to $47.6 billion from $44.3 billion.
  • Fisher has boosted its stakes in most of its top holdings in terms of value, such as Apple, General Electric, Amazon, and has initiated a stake in Google.

By Alex Oleinic

Ken Fisher's Fisher Asset Management recently filed with the SEC its Schedule 13F for the second quarter of 2014. The fund disclosed more than 600 long equity positions, worth more than $47.56 billion. Over the quarter, it acquired 81 new positions, added to 262 of its preexisting holdings, and sold out of 59 of them. Let's take a look at its top positions for the quarter.

Fisher's largest stakes are placed in ETFs; however, its fourth-biggest bet is the one on Johnson & Johnson (NYSE:JNJ), the famed $286-billion market cap healthcare company. The fund declared ownership of 10.4 million shares of the company, after a 4% increase in its position. The investment in Johnson & Johnson is worth more than $1.09 billion, and accounts for 2.3% of the fund's equity portfolio's total value.

Another major hedge fund with bulky exposure to Johnson & Johnson is Donald Yacktman's Yacktman Asset Management, which last declared holding 9.57 million shares of the company as of the end of the first quarter, which accounted for almost 4% of its total equity portfolio.

American Express Company (NYSE:AXP) traded places with Johnson & Johnson over the second quarter. The stake in the credit services provider, which was Fisher's most valuable long equity position the previous quarter, is now on the second spot, with a market value of $1.07 billion. The fund revealed ownership of 11.38 million shares of American Express Company, up by 3% on the quarter.

Warren Buffett's Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) is one of the largest shareholders of record, with 151.61 million shares of American Express Company, worth more than $13.64 billion, according to its last 13F filing.

Pfizer Inc. (NYSE:PFE) was displaced from the third place in this list and replaced by Apple Inc. (NASDAQ:AAPL). After having added more than half a million shares to its holdings (over the second quarter), the fund owns 10.74 million shares of the tech behemoth, worth almost $1 billion. The stake in Apple accounts for 2.1% of its total equity portfolio.

As most knowledgeable investors know, Apple's largest hedge fund shareholder is Carl Icahn's Icahn Capital LP, which last acknowledged holding more than $4 billion in the company's stock - or 7.53 million shares.

Wells Fargo & Co (NYSE:WFC), a $270-billion market cap diversified financial services company, came in fourth. Fisher declared a 4% increase in its position in Wells Fargo, and now owns 18.54 million shares, worth about $974.97 million.

We should highlight that Wells Fargo is Warren Buffett's largest stake, according to Berkshire's last 13F filing. The investment guru said he owns more than 463.45 million shares of the company.

Last, but not least is United Technologies Corporation (NYSE:UTX), a $97.12-billion market cap provider of high-technology products and services to building systems and aerospace industries worldwide. The fund reported ownership of 8.27 million shares of United Technologies Corporation, raising the stake by 2% over the quarter. The position is worth approximately $955 million, and accounts for 2.0% of the fund's total equity portfolio.

Other big names with big stakes in United Technologies Corporation are Ric Dillon of Diamond Hill Capital, and Ken Griffin of Citadel Investment Group. These funds declared (by the end of the first quarter) ownership of 2.88 million shares and 1.84 million shares, respectively, and both stand amongst the largest hedge fund investors in the company.

Overall, our research has shown that Buffett's picks, Wells Fargo and American Express, have the largest probability of outperforming the broader market. Apple seems like a cheap bet in the short term, but we don't think its margins are sustainable in the long term. As a group, Fisher's top picks are likely to outperform the market by a couple of percentage points, on average.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Business relationship disclosure: This article is written by Alex Oleinic and edited by Meena Krishnamsetty. Alex is compensated by Insider Monkey to write this article. Meena holds a long position in Apple shares.

Source: Ken Fisher's Top Stock Picks