Seeking Alpha

Doctor Finance's  Instablog

Doctor Finance
Send Message
I invest in undervalued well established companies trading at a below market multiple. Dividends certainly add to the appeal but aren't vital.
  • Five Stocks Gurus' Investment Behavior Recommends. 0 comments
    Aug 13, 2014 3:29 PM | about stocks: XOM, PM, VOD, BP, VZ
    • Verizon Communications the highest held dividend stock by gurus; a total of 19.5% of the company's outstanding shares. That makes a total of 84,230,596 shares being held by 33 gurus.
    • Oil and Gas magnates are also an attractive investment options for Gurus. Total of 26 of them own as much as 15.6% of the company's outstanding shares of British Petroleum.
    • E-Cigarettes disrupting Philip Morris, The 2nd most favorite stock among Gurus. A total of 28 of own as much 16.6% of the company's total outstanding shares.
    • Vodafone, is another stock you should consider buying if the gurus' investing behavior is something you'd like to replicate.

    Exxon Mobil is an interesting energy bet for Gurus seeking both capital appreciation and recurring dividend income.

    One of the most important factors that make a company's stock attractive is the number of "gurus" investing in it. These "gurus" have been identified based on their long term outstanding performance. If big names, who have managed to perform remarkably well in the financial world, find a certain company attractive and profitable, chances are the company really is attractive and profitable. I selected stocks that have sustainable dividends. So, with that requirement set, here are the top five stocks that are most attractive keeping these financial benchmarks in view.

    Verizon Communications :(VZ)

    The first in line is Verizon Communications. Verizon is a company that provides communication solutions to consumers, businesses as well as governments. It has the highest held dividend stock by gurus: a total of 19.5% of the company's outstanding shares. That makes a total of 84,230,596 shares being held by 33 gurus in total. There isn't much doubt that Verizon is a company you should be looking to invest your money in. After all, some of the most popular names in the financial world have invested in Verizon. James Barrow, for instance, has a total of 1.8% of his whole portfolio invested in Verizon. By holding a total of 26,524,596 shares, he owns 0.93% of the company's outstanding shares, making him the top guru investor in the company. Not far down the list is Warren Buffet. The ever so famous Warren Buffet has 0.5% of his profile invested in Verizon. He holds 11,022,743 shares of the company thus leaving him with the ownership of 0.39% of the company's outstanding shares. Jim Simons has 1.2% of his portfolio invested in Verizon by owning 10,356,855 shares. This represents a total of 0.36% of all the shares of the company.

    (click to enlarge)

    Verizon has been reporting slower increases in revenue per share and its price has neared its ten-year high. The issuance of debt over the past few years has also increased and currently the company is undervalued. It does, however, have a dividend yield of 4.3%.

    British Petroleum PLC: (BP)

    The oil and gas magnates are also an attractive investment options for gurus. A total of 26 of them own as much as 15.6% of the company's outstanding shares. Once again, James Barrow, with a total of 2% of his entire portfolio consisting of BP stocks, owns a total of 0.91% of the company's shares, making him the top guru investor for British Petroleum too. Following Barrow is Richard Pzena who has 3% of his whole portfolio invested in BP. This leads to 0.35% of the whole company's shares being owned by this guru. Finally, the ever so famous Bill Gates has also invested 1.8% of his total portfolio in BP. Owning a number of 7,315,267 shares of the company makes Bill Gates the owner of 0.23% of the company's shares.

    Currently, British Petroleum has a dividend yield of 4.4%.

    Philip Morris International: (PM)

    The tobacco company Philip Morris Intl.'s stock is also very popular among gurus, coming in at second on their list. 28 gurus own a total of 16.6% of the company's total outstanding shares.

    (click to enlarge)

    Philip Morris has been showing an expanding Net profit margin and is also near a 10-year high when it comes to price. Currently, it is overvalued. Philip Morris currently has a dividend yield of 4.1%. "The impact of e-cigs in European cigarette volumes is already being felt by PMI. PMI expects this impact to moderate, but the most likely course is for the impact to deepen and spread. E-cigs have too many advantages to count and are going to take the cigarette market by storm. PMI stands ready to be disrupted and the process has already begun."

    Vodafone: (VD)

    The renowned cellular service provider Vodafone is another stock you should consider buying if the gurus' investing behavior is something you'd like to replicate. A total of 23 gurus own 13.6% of the company's shares. The company's top guru investor is John Paulson who owns a total of 1.8% of the company's total outstanding shares. This makes up 5.1% of his total portfolio. The fund HOTCHKIS & WILEY has 2% of its portfolio invested in Vodafone shares. By owning a total of 14,428,182 shares, this fund owns 0.55% of the company's outstanding shares. Followed by HOTCHKIS & WILEY is the fund Dodge & Cox. A total of 0.18% of the fund's portfolio consists of Vodafone shares. It owns 0.18% of the company's total shares outstanding in the form of 4,772,079 shares.

    The company's revenue per share has been declining lately and its price is also near a 3-year low. Currently, the company is undervalued. Its current dividend yield is 6.9%.

    ExxonMobil: (XOM)

    ExxonMobil's success isn't concealed from anyone. It is the largest publically traded oil and gas company in the world, which is why it is not a wonder that gurus like to possess its stock. Its expansion plans and promising future add to its overall attractiveness. A total of 20 gurus have invested in this company, the top guru being Arnold Van Den Berg. 1.2% of Arnold Van Den Berg's portfolio consists of ExxonMobil's shares. He owns a total of 133,556 shares of ExxonMobil. Next to Arnold Van Den Berg is Chuck Akre. 0.01% of Chuck Akre's total portfolio consists of shares of ExxonMobil. He owns a total of 4,446 shares of the company. Finally, Joel Greenblatt has the possession of 13,076 shares of the company. 0.02% of this guru's portfolio is made up of ExxonMobil shares.

    (click to enlarge)

    ExxonMobil has been announcing increasing dividends over the years and these high dividends are expected to be sustained in the years to come. ExxonMobil currently has a low dividend yield at 2.71% but the company's dividends are sustainable and will continue increasing in the future.

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

    Stocks: XOM, PM, VOD, BP, VZ
Back To Doctor Finance's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Most Commented
Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.