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Investing Specialists

Our Ultimate Stock-Pickers' Top 10 New Money Purchases

Several high conviction purchases by our top managers are still attractive.

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By Bradley Meeks | Stock Analyst

Despite the dramatic run-up in the markets over the last year, we've still been able to find a few investable ideas among the holdings, purchases and sales of our Ultimate Stock-Pickers. As you may recall from our last article, our top managers seemed to be putting an equal amount of conviction into more defensive sectors of the market, like Consumer Goods and Health Care, as they were in (relatively) riskier areas, like Financial Services and Energy, with their most recent purchases. Given that we are in the midst of what we believe to be a true stock picker's market, where winners will be found only by sifting through each sector of the market in the pursuit of undervalued stocks, we decided to take a much deeper look at the new money purchases made by our managers during the most recent period.

We continue to believe that portfolio managers send signals about how they feel about a particular stock by the amount of money they're willing to commit to it at any given time, which is why we focus on not only the holdings of our Ultimate Stock-Pickers, but also on their purchases and sales. As much as we assess the relative attractiveness of an individual security by how many funds are currently holding it, regardless of whether their managers have been adding to or subtracting from these positions, and the percentage that each security makes up of a portfolio, we also like to look at new money purchases and outright sales, which we feel offer additional insight into the thinking of managers about their holdings.

The Morningstar Ultimate Stock-Pickers Team does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.