Billionaire Ken Fisher's 3 Top Stocks
Jul 19th 2013 5:07PM
Updated Jul 19th 2013 5:08PM
Big-money managers must reveal their stock positions every quarter, giving small investors like you and me insight into the favorite stocks of money pros. In addition to running a multi-billion-dollar fund, Ken Fisher is a Forbes columnist, and has written several New York Times best-selling books on investing. Sound like a guy to pay attention to? You bet.
Under the hood of Fisher's top stock picks
Based on Fisher Asset Management's 13F SEC filing for Q2 2013, Fisher's holdings include a diversified mix of stocks that span all sectors, with the most significant weightings in the financial services, technology, and health-care sectors.
Health-care conglomerate Johnson & Johnson represents Fisher's largest individual stock holding and makes up 2.27% of his portfolio. Mitigating the risk of possible decline in any one business segment, the company boasts leading positions in pharmaceutical, medical device and diagnostic, and consumer health areas. No more than 12% of revenues are derived from any single company division. J&J's recently launched new products and late-stage pharmaceutical drug pipeline provide opportunities for growth. Strong worldwide pharmaceutical sales buoyed Johnson & Johnson's second-quarter revenue and earnings.
Another company that's no stranger to diversification is Pfizer . The drugmaker acquired several companies during the past few years, but Pfizer is now keen on divesting its non-core businesses. For example, in February, the drugmaker launched an IPO of a minority stake in Zoetis , once Pfizer's animal health business. As the result of a recent exchange offer, Pfizer is completely separated from Zoetis, now the largest stand-alone company fully dedicated to animal health vaccines and medicines.
As Pfizer becomes a smaller company by selling or spinning off non-pharmaceutical-related businesses, successful pipeline products should have a greater impact on the growth and profitability of the company. Despite Lipitor's recent patent expiration, Pfizer boasts a hearty drug pipeline, including therapies for rheumatoid arthritis, stroke prevention, and cancer. The maker of Celebrex and Viagra represents 2.24% of Fisher's portfolio.
Branded drugs are definitely important to big pharmaceutical companies. But financial services giant American Express leans on its sought-after brand, too. Representing just over 2% of Fisher's holdings, the company boasts a distinctive business model. Unlike other credit card issuers that generate most of their revenue by charging interest on loan balances customers carry from month to month, American Express relies more heavily on annual fees it charges its cardholders, and merchant fees. The company's focus on affluent consumers enables it to grow despite overall household deleveraging.
Foolish final thoughts
Aside from owning American Express, Fisher's fund also holds significant positions in Wells Fargo, JP Morgan Chase, and HSBC Holdings. In fact, nearly one-quarter of the fund is invested in financial services stocks. Fisher's confidence in the sector may encourage investors to consider similar positions in their own portfolios.
With so much of the financial industry getting bad press these days, it may be a greedy-when-others-are-fearful moment. Not surprisingly, some of Ken Fisher and Warren Buffett's biggest investments are in the space. In the Motley Fool's free report, The Stocks Only the Smartest Investors Are Buying, you can learn about a small, under-the-radar bank that's too tiny for Buffett's billions. Too bad, because it has better operating metrics than his favorites. Just click here to keep reading.
The article Billionaire Ken Fisher's 3 Top Stocks originally appeared on Fool.com.Fool contributor Nicole Seghetti owns shares of JPMorgan Chase & Co., Pfizer, Johnson & Johnson, and Wells Fargo. Follow her on Twitter @NicoleSeghetti. The Motley Fool recommends American Express, Johnson & Johnson, and Wells Fargo. The Motley Fool owns shares of Johnson & Johnson, JPMorgan Chase & Co., and Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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