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Investing Specialists

Ultimate Stock-Pickers: Top 10 High-Conviction and New-Money Purchases

While overall activity for our top managers decreased again, our early read on the buying and selling activity during the period did uncover a few ideas worth considering.

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For the past eight years, our primary goal with the Ultimate Stock-Pickers concept has been to uncover investment ideas that not only reflect the most recent transactions of our grouping of top investment managers (see here) but are timely enough for investors to get some value from them. In cross-checking the most current valuation work and opinions of Morningstar's own cadre of stock analysts against the actions (or inactions) of some of the best equity managers in the business, we hope to uncover a few good ideas each quarter that investors can dig a bit deeper into to see if they warrant a long-term commitment.

With close to 90% of our Ultimate Stock-Pickers having reported their holdings for the fourth quarter of 2016, we have a good sense of what stocks piqued their interest during the period. While the story of 2016’s third quarter (see here) was one where the equity markets were largely calm (relative to the disruption that was caused by the Brexit vote in late June), the story of the fourth quarter revolved around the runup to—as well as the market’s euphoria following—the unexpected U.S. presidential election results. Our initial thoughts on the actions of our top managers so far is that they're taking a wait-and-see approach to the election results, suggesting to us that it might be difficult right now for many managers to handicap the potential business-friendly tax and regulatory reform that comes with a Trump presidency with his protectionist trade proposals and the economic uncertainty that brings.

The Morningstar Ultimate Stock-Pickers Team has a position in the following securities mentioned above: AAPL. Find out about Morningstar’s editorial policies.