For the past nine years, the Ultimate Stock-Pickers’ primary goal has been to uncover investment ideas our equity analysts and top investment managers find attractive, in a manner timely enough for investors to gain some value. As part of this process, we scour the quarterly (in some cases, the monthly) holdings of 26 different investment managers, 22 of which manage mutual funds that Morningstar's manager research group covers, and four of which manage the investment portfolios of large insurance companies. As they become available, we attempt to identify trends and outliers among their holdings as well as any meaningful purchases and sales that took place during the period under examination. At the time of writing this report, 25 of our 26 Ultimate Stock-Pickers have reported their holdings for the third quarter of 2018, which we think is a broad enough sample to get an understanding of which stocks these funds found interesting.
In our last article, we walked through some of the buying activity we were seeing from our Ultimate Stock-Pickers. The piece itself was an early read on the individual high-conviction and new-money buys that were made during the third quarter of 2018. In our current article, we take a look at the aggregate buying and selling, rather than the individual buys and sells we looked at in our last article. The Ultimate Stock-Pickers continue on their on their long-standing trend of net selling conviction. We think that this long-standing selling trend is likely influenced by the long-standing shift in assets from actively managed products to passively managed products and is not necessarily indicative of an aggregate bearish stance on the market. Despite the net selling, our Ultimate Stock-Pickers still found mispriced securities in the current market environment and made conviction purchases and sales.
The Morningstar Ultimate Stock-Pickers Team does not own shares in any of the securities mentioned above. Find out about Morningstar's editorial policies.