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Investing Specialists

Three Picks From the Ultimate Stock Pickers' New Purchases

Combining our managers' recent activity with our ratings uncovers some ideas.

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By Brett Horn | Associate Director

We often like to take a look at what our Ultimate Stock-Pickers are buying for the first time within their portfolios, also known as new money purchases. Combing through the current holdings of our Ultimate Stock-Pickers gives only a limited indication of what stocks these managers believe are currently worth buying, as some of these holdings may have been bought a while back, when prices were at a different level. Looking at new money purchases give us some insight into what these stock pickers think are the most attractive buying opportunities right now. However, since these funds report their new positions with a lag, the prices they paid for these stocks could differ significantly from their prices today. Still, new money purchases are a better indication of potential opportunities than just looking a manager's overall holdings, in our opinion.

As we farmed through the list of the top 25 new money purchases for the most recent period, we paid particular attention to a few main factors. First, only two stocks were purchased by multiple fund managers. A new position purchased by multiple funds indicates that more than one manager views the particular stock as a great buying opportunity. The two stocks we found that met this criterion were  Bank of America (BAC), which was purchased by  Fairholme (FAIRX) and  Sound Shore (SSHFX), and  Teva Pharmaceutical (TEVA), which was purchased by  Markel Corporation (MKL) and  Oak Value (OAKVX).

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