10 Stocks Owned by the Best Fund Managers (Update2)
BOSTON ( TheStreet) -- Although many of the best mutual fund managers were ultra-cautious late last year, they still made major commitments to select stocks, underscoring their confidence in the companies.
Research firm Morningstar, which tracks the portfolio changes of 26 top-performing mutual funds for its "Ultimate Stock-Pickers" series, published a list of 10 stocks those managers bought, either to establish a new position or to add to an existing one.
The stock pickers' choices were eclectic and, in one instance, surprising. The managers at the Fairfax Financial Holdings Fund (FRFHF) made a big addition to a conservative choice, the respected but underperforming health-care-products company Johnson & Johnson (JNJ) . At the same time, it added to its stake in the troubled Canadian mobile-device maker Research In Motion (RIMM) .
The Yacktman Fund (YACKX) also bought Research In Motion shares, adding to its stake by more than 60% in the fourth quarter.
But the stock seeing the most buying was biotechnology firm Gilead Sciences (GILD) . The Hartford Capital Appreciation Fund (ITHAX) established a new position in it, buying nearly 4 million shares, while the Parnassus Equity Income Fund (PRBLX) doubled its stake, to 4 million shares, in the quarter.
Gilead also has the best ratings from analysts of the group, garnering 15 "buys." But last week, Deutsche Bank, while reiterating its "buy" rating on the firm's stock, lowered its price target to $57 from $66 on expectations of price discounts on its HPV drugs.
Parnassus bought a significant new stake in brokerage firm Charles Schwab (SCHW) , picking up more than 10 million shares.
"Managers send signals about the level of conviction they have in a position by how much of their portfolio (on a percentage basis) they're willing to commit to a given name at any point in time," Morningstar said in a research note. Although it found that the fourth quarter "was probably one of the least-active periods for stock buying that we've seen in quite some time."
Indicative of that, the top "buys" had only two of the 26 funds buying their shares, compared to prior periods when there were usually four of five managers buying a particular stock, Morningstar said.
Here are the 10 most-purchased stocks in the fourth quarter of 2011 by the "Ultimate Stock-Pickers" funds in order of value: