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Investing Specialists

Seven High-Conviction Stocks from the Ultimate Stock-Pickers

Looking for buy ideas among the high-conviction holdings of our top managers.

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By Todd Young | Senior Stock Analyst

With the growing popularity and lower costs associated with index investing, we often wonder why individual investors would pay higher fees for some actively managed mutual funds that, in our view, do nothing more than track the index they are benchmarked against. When a manager holds more than 200 stocks in a fund, we believe it becomes increasingly more difficult for that manager to really know and understand each holding. Such broad indexing has not been the case for our Ultimate Stock-Pickers, many of whom tend to be far more concentrated than the average mutual fund.

As you may recall, when we assess the top purchases and sales of the managers included in our Investment Manager Roster, we look at how many of them hold a particular security and whether or not they've been adding to or subtracting from their positions. We also look at the percentage each security makes up of their equity portfolios to determine the level of conviction a manager might have in a particular name by the amount of capital they have committed to it. Given the slightly more concentrated portfolios run by many of our top managers, we thought it would be useful to sift through some of the higher-conviction holdings maintained by of our current list of Ultimate Stock-Pickers.

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.

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