Time to be a contrarian???

By: ispeculatornew
Date posted: 02.24.2010 (5:00 am) | Write a Comment  (7 Comments)

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Goldman Sachs recently published its list of the stocks most commonly held by Hedge Funds as of the end of last quarter which obviously makes a very interesting list. Hedge Fund managers are generally regarded as the best and smartest investors. Why? Because generally the best managers will end up there where high returns are best rewarded (in terms of pay of course!).

Looking through the list, I’m not surprised to see the 3 big technology giants in there with Apple(AAPL), Google(GOOG) and Microsoft(MSFT) all among the top 6 names owned. Apple has not been as unanimous since the announcement of its Ipad but I do think it remains a good pick (and do have a trade on Apple right now).

Pfeizer(PFE) at #2 is not that surprising either. While many point to its lack of new products, there are many things to like about it, especially its dividend yield which even after some decreases, remains very high (around 4%).

There are also 4 financial institutions, Bank of America(BAC), JP Morgan Chase (JPM), Mastercard(MA) and Wells Fargo (WFC). Honestly, I find it very difficult to judge these financial institutions right now. I had written about an Bank of America investment being similar to a visit to the casino and while things have improved, it’s still difficult to judge these stocks.

The final two stocks, I do not know as much about, as I have not considered investing in either DirecTV(DTV), or CVS Caremark(CVS), both are consumer players and could be viewed as defensive plays.

Buying or Selling these stocks?

The big question now is that with this info, would you rather assume that most of these funds are wrong (and sell) or jump on the bandwagon and get long assuming these guys are the brightest and they will probably turn out right? It’s actually a very difficult choice but I personally do not move either way really. I do think it’s interesting to see and am happy to not see Amazon (AMZN) on this list since I am short on the stock, but would I change my investing decisions based on these? I don’t think so no. How about you?

TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueBetaRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg Growth
AAPLApple Inc597.5114.0712.316.179.24.21139.460.86184.741.2353.24
ORCLOracle Corp41.6917.5813.1410.

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  2. Comment by Zavi — February 24, 2010 @ 7:56 pm

    Not surprised about apple, google and microsoft too! No brainer for me.

  3. Comment by IS — February 25, 2010 @ 8:07 am

    @Zavi – Any names you would have expected on the list that are not there?

  4. Comment by Zavi — February 25, 2010 @ 8:44 am

    nope, I’m all right with the list. All in with tech stocks!!

  5. Comment by OneDay — February 25, 2010 @ 8:45 am

    It’s an interesting debate. I’m not a contrarian investor. Seems like some contrarian investors are currently buying the us stock market, technology in particular…

    Maybe WMT, seems like a good hold? What do you think?

  6. Pingback by Fill Tax with QuickTax: TFB is Giving 2 Copies! — February 26, 2010 @ 3:54 am

    […] Time to be contrarian? @ Intelligent Speculator […]

  7. Comment by IS — March 6, 2010 @ 3:11 pm

    @OneDay – Yes, I would think that WMT would be a good long term hold. You just made me think about looking for a contrarian ETF, surely that exists right?

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