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  • Stocks That Market Insiders Love 0 comments
    Jun 30, 2013 7:16 AM | about stocks: CVX, GOOG, PG, XOM

    It is no secret that most of the world's stock movement is controlled by large institutional buyers, and the average individual investor has little to no effect on the price movement of a particular stock anymore. Average investors tend to be at the mercy of large hedge funds, mutual fund companies, and other major investment institutions.

    With such a large percentage of stock's price movements being controlled by large institutional buyers in the current broader markets, logic would tell us that being invested in companies that are well sought after by large investment institutions may turn out to be a profitable strategy.

    Investment managers that control over $100 million are required by law to file reports with the Securities and Exchange Commission, better known as their SEC. These disclosures report exactly what holdings and how large of holdings these large institutions are purchasing and selling.


    1.) Google (GOOG) - Google is one of the biggest names in tech. They recently acquired a smaller company Waze, which should help Google in making their Google Maps program the best in the world. Google also has incredible innovation, as they allow their employees to spend a set amount of time daily to work on personal projects.

    Analysis- In terms of financials, Google's revenues have been increasingly steadily in the past few years. 2009 shows revenues of $23.3 billion, compared to 2012 revenues of $50 billion. As a result net income has nearly doubled in the same time frame, growing from $6.5 billion ins 2009 to $10.7 billion in 2012. EPS were at $20.41 in 2009 versus $32.31 in 2012. Sales are growing at a rate of 17.5% annually.

    Conclusion-Google is a growth monster, it trades at a P/E of 26 but it's high growth rate definitely helps justify this large multiple. The stock has run up quite a bit, with it's 52 week range being from $557.21-$920.60, and a currently price of around $875 (as of 6/26/13). For a tech growth investor, Google may be worth a look.

    2.) Procter and Gamble (PG)- I recently wrote an article about the how great of an investment PG is long term. With a stable dividend, and their former CEO AG Lafley back in charge, PG should see a nice return over the long haul.

    Analysis- Proctor and Gamble has always been a great "buy and hold stock", which is exactly what I have outlined in the past. It's stable dividend and excellent emerging markets growth prospects make it appealing.

    Conclusion- Catalysts for PG include the recent management change, emerging markets, and recent billionaire investors announcing their stakes(Ackman and Buffett). Reasons to hold include the dividend, growth potential, and safety.

    3.) Chevron (CVX)- My article, "Why You Should Add Chevron To Your Portfolio" helped explain my reasons for liking Chevron stock. Reasons include excellent leadership, dividend payouts, and superiority to their competitors.

    Analysis- Chevron's financials are excellent, starting with net revenues. Revenues have grown from about $160 billion in 2009 to over $230 billion in 2012. Income has grown in this time period as well, from $46 billion to $52 billion. Chevron currently has a P/E of about 9 and a PEG of less than one.

    Conclusion- Chevron offers excellent growth prospects, stable dividend, and good 3-5 year appreciation estimates. I view it as a superior investment to their slower growing competitors. Chevron outperforms ExxonMobil (NYSE:XOM) in stability, earnings growth, and dividend yield. Chevron is also very well in tune with the latest trends in alternative energy developments.

    Although these are certainly no guarantees, like anything in the market, following these patterns for research on your stock portfolio may prove to be helpful. The trick (and also the hardest part) to profiting from this system is being able to predict what industry large institutions are currently seeking, and buying the best company in that sector.

    Disclosure: I am long PG, AAPL. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

    Stocks: CVX, GOOG, PG, XOM
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