Billionaire Ken Fisher's Top Stock Holdings

Warren Buffett's right-hand man and business partner Charlie Munger offers this advice for successful investing: "Carefully look at what other great investors have done." Luckily for us, great investors are required to divulge changes they make to their portfolios on a quarterly basis. These SEC 13F filings allow us to peek into the stock comings-and-goings of money pros, including multibillion-dollar hedge fund manager Ken Fisher.

Uncovering Fisher's picks
Fisher's holdings include a diversified mix of stocks that span all sectors. Fisher holds 23% of fund assets in financial services stocks, 19% in technology, nearly 14% in services, and 11% in health care. Meanwhile, only 1% of fund holdings comprise the conglomerates, transportation, and utilities sectors combined. Nearly 30 of the fund's top 50 holdings pay more than a 2% dividend yield. The fund boasts a very low turnover, which lessens the dependence on market timing and instead banks on Fisher's long-term stock-picking prowess.

Check out Fisher Asset Management's top holdings based on its 13F SEC filing for Q4 2012. Fisher's top 10 positions make up 20% of the hedge fund's portfolio.

Company

Percentage of Portfolio

Market Cap

iShares iBoxx $Invest Grade Corp Bond

2.50%

N/A

Pfizer

2.20%

$195 billion

Visa (NYSE: V  )

2.04%

$106 billion

Johnson & Johnson (NYSE: JNJ  )

2.02%

$201 billion

Oracle (NYSE: ORCL  )

1.82%

$164 billion

Cicso Systems

1.80%

$110 billion

HSBC Holdings (NYSE: HSBC  )

1.80%

$211 billion

General Electric

1.76%

$229 billion

Wells Fargo (NYSE: WFC  )

1.75%

$184 billion

International Business Systems

1.73%

$220 billion

Sources: Whale Wisdom, Yahoo! Finance.

All of the hedge fund's top stock holdings are mega-cap stocks. Fisher recently proclaimed his bullishness on very large company stocks in his Stock Market Outlook for Q4 2012.

I looked at several of these companies in my review of Fisher's positions last quarter. So this time around, let's look at five different companies and examine some possible reasons he likes these stocks in particular.

Visa
San Francisco-based Visa is the leader in electronic payments, with roughly 52% market share of global payment transactions . In 2011, the Federal Reserve revised its debit interchange cap to $0.22 versus the $0.12 originally proposed , a move welcomed by Visa and its rivals. But risks to Visa remain the potential that restrictions are applied to credit card swipe fees and disruptive payment technologies like Ebay's PayPal.

Johnson & Johnson
Johnson & Johnson boasts leading positions in pharmaceutical, medical device, and consumer health product areas, mitigating the risk of a potential decline in one division. Further, no more than 10% of revenues are derived from any single product. The company's recently launched new products and extensive late-stage pharmaceutical drug pipeline provide ample opportunities for growth.

Oracle
Oracle is one of the world's largest software companies and a leading provider of software for information management. Oracle's recent acquisitions  are paying off through strong customer retention. Also, new customers are now more likely to purchase other Oracle software and services. On the flip side of the same coin, Oracle's biggest risks are from integration due to its large number of recent acquisitions.

HSBC Holdings
HSBC's well-recognized brand and gargantuan size allows it to successfully operate in 85 countries. The company's global network enables it to attract clients with cross-border banking needs. Many of its operations are in emerging markets, which offers it a great deal of growth potential as the long-term trend toward globalization of the financial markets continues. Last month, the company was fined nearly $2 billion for money laundering. Since then, however, its stock has gone up 5%. 

Wells Fargo
Wells Fargo's focus on wealth management and cross selling from its Wachovia integration will likely benefit the company, which boasts diversified sources of fee revenue. Without a doubt, the low-interest-rate environment is challenging for banks. But Wells is in a good position to successfully navigate this through its overwhelming mortgage origination market share . Persistently low interest rates and weakness in the housing market recovery represent risks for the company.

Foolish bottom line
If I had to place my money on just one of these companies right now, I'd go with Wells Fargo. Its dominant mortgage origination market share, rock-bottom mortgage rates, and an improving housing environment position the company as an extremely attractive opportunity at this time.


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9/16/2014 4:03 PM
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Johnson & Johnson CAPS Rating: ****
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