TIAA-CREF recently announced that Edward J. Grzybowski was resigning as chief investment officer. In this role, Mr. Grzybowski was responsible for investment policy, strategy and oversight of the company's more than $428 billion in combined assets under management.
TIAA-CREF is the leading retirement provider for people who work in the academic, research, medical and cultural fields. Given Grzybowski’s extensive experience and time spent at the company, along with the strong investment team the company has assembled, I thought it would be interesting to what some of their favorite stock picks are.
Below are the top 7 holdings for TIAA CREFF Investment Management ($105.1B in assets) as of September 30, 2011:
Apple Inc. (NASDAQ:AAPL): Apple is TIAA-CREF’s top holding, with over 8.8M shares contributing 3.28% of its total portfolio. As I’ve previously noted, the stock is also Invesco’s top stock holding, and is popular among many analysts and portfolio managers. Recent news of Apple potentially buying Israeli flash storage technology company Anobit shows the company is looking to put its stockpile of cash to work. Apple has a market cap of $363.51B and generates $108.25B in revenue. It has a P/E of 14.14, and a forward P/E of 10.05, based on analysts’ estimates.
Exxon Mobil Corp. (NYSE:XOM): Exxon Mobil Corporation engages in the exploration and production of crude oil and natural gas, and manufacture of petroleum products, as well as transportation and sale of crude oil, natural gas, and petroleum products. It is TIAA-CREF’s second largest holding at 2.3%. Exxon Mobil has a market cap of $385.09B and a P/E of 9.71. The company provides a 1.85% dividend yield with a 22% payout ratio. TIAA-CREF owns over 30.2M shares of Exxon.
Google Inc. (NASDAQ:GOOG): TIAA-CREF owns over 2.6M shares of Google, making it the third largest holding at 1.57%. The company’s seemingly unassailable competitive edge in and enormous free cash flow generated from its web search business makes it an attractive holdings for many fund managers, even after breaking $640/share. Given the 33% jump in revenues it reported most recently, it is clear why some investors think the stock still has room to run. Google has a $204.25B market cap, a P/E of21.49, and a forward P/E of 14.35 based on analysts’ estimates.
International Business Machines Corp. (NYSE:IBM): International Business Machines Corporation (IBM) provides information technology (NYSE:IT) products and services worldwide. TIAA-CREF owns over 8.3M shares of IBM, making it the fourth largest holding in TIAA-CREF’s portfolio. The stock is another favorite among value investors, with legendary investors Warren Buffett buying 5.5% of IBM. The company has a market cap of $ 226.59B and a P/E of 15.15. It holds over $11.33B in cash on its balance sheet compared to $30.16B in total debt. The company provides a 1.5% dividend yield with a 22% payout ratio.
Microsoft Corporation (NASDAQ:MSFT): TIAA-CREF sold just under 3M shares, or 4.82% of all its total investment in the company, during the most recent reporting period. However, it still holds over 58.2M shares, making Microsoft its fifth largest holding at 1.41%. After being dismissed and overlooked by many investors in favor of more growth-oriented tech stocks, Microsoft is becoming a top holding among value investors, such as the Goodhaven Fund. The company generates $71.12B in revenue and has a P/E of 9.42. It also holds $55.94B in cash on its balance sheet, or $6.65/share. It sports a 2.7% dividend yield with a payout ratio of 23%.
Pfizer Inc. (NYSE:PFE): Pfizer Inc., a biopharmaceutical company, offers prescription medicines for humans and animals worldwide. TIAA-CREF owns over 64.8M shares of Pfizer, making it the sixth largest holding at 1.26%. Some analysts feel the company’s future is unclear, considering that generic versions of Lipitor have taken 14.6% of the overall Lipitor market after only a few days on the market. However, Pfizer does have several potential drug candidates in its pipeline, including bapineuzumab, which could be a game-changer in the treatment of Alzheimer’s disease. Furthermore, the company just recently announced a $10B share repurchase plan, and raised its dividend 10%. Pfizer trades at a P/E of 14.42, and offers a 3.9% dividend yield with a 54% payout ratio.
Chevron Corp. (NYSE:CVX): Chevron engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. It is TIAA-CREF’s seventh largest holding at 1.21%. Chevron generates $229.60B in revenue and has a P/E of 7.68. The company holds $20.34B ($10.21/share) in cash on its balance sheet compared to $9.74B, and has a total debt/equity ratio of 8.01. It also provides investors with a 3.09% dividend yield with a 22% payout ratio. TIAA-CREF owns over 12.3M shares of Chevron.
Disclosure: I am long AAPL.
Disclaimer: The opinions in this document are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit transactions or clients. We do not recommend that anyone act upon any investment information without first consulting an investment advisor as to the suitability of such investments for his specific situation.