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Investing Specialists

10 High Conviction Buys from Our Ultimate Stock-Pickers

Berkowitz wasn't the only manager we saw actively trading in the fourth quarter.

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By Jim Ryan| Senior Stock Analyst

With half of our Ultimate Stock-Pickers having reported their fourth-quarter holdings, we've been able to glean some of the higher conviction moves made by a fair number of our top managers during the most recent period. Based on this early read of their holdings, purchases and sales, we walked away with the impression that our Ultimate Stock-Pickers had shifted their focus somewhat during the fourth quarter after two quarters of stunning performance by the markets. After bottoming out in early March, the S&P 500 Index (SPX) posted 16% gains in both the second and third quarters of 2009, which in and of themselves would have been impressive annual returns for most fund managers.

With such a strong run-up in the markets in just six months' time, we were expecting to see some of our Ultimate Stock-Pickers moving to trim (or even eliminate) overweight positions, especially if they felt that the appreciation they had witnessed during the rally was unsustainable, while also putting new money to work in underappreciated stocks. Looking at the trading activity of the thirteen fund managers we've been able to sift through so far, we were not disappointed.

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.