Uncovering Investment Gems: Gurus' Top Picks for 3rd-Quarter 2023

With the latest round of 13F filings released over the past month, investors and market watchers alike are interested in seeing where the major hedge fund managers are finding value opportunities.

Background

Managers with more than $100 million in assets under management are required to disclose their holdings to the SEC each quarter via 13F filings. These filings are due 45 days after the quarter end date. For third-quarter 2023, that means managers must disclose all qualifying assets held on Sept. 30, 2023 by Nov. 16, 2023. Qualifying assets include long positions in U.S. equities and ADRs, call/put options and convertible debt securities. Shorts, cash positions, foreign investments and other assets are not included.

Investors can take advantage of these 13F filings to create portfolios from managers that have proven past success. Despite the 45-day delay in reporting, research has shown that investing alongside a single manager or group of managers can outperform the market. The key is to identify the best and most consistent funds to copy.

The statistics in this report are based on our Premium gurus. These gurus are our hand-picked, best-performing value investors that have proven long-term records.

The Aggregated Portfolio has proven winners

The GuruFocusAggregated Portfolio, a Premium feature based on these managers' quarterly filings, shows the 10 most broadly held stocks as of the end of the third quarter included some big names with long track records of success, such as Alphabet Inc. (GOOGL, Financial) and Microsoft Corp. (MSFT, Financial).

Big names among Guru Hot Picks

While these stocks are quite popular overall, they did not all necessarily see the heaviest guru buying activity during the three months ended Sept. 30. According to GuruFocusHot Picks, that honor only goes to a handful of these companies, including Meta Platforms Inc. (META, Financial) and UnitedHealth Group Inc. (UNH, Financial). However, several of these 10 companies also recorded a lot of selling activity over the same period.

Consensus Picks contain some newer stocks

Then there are those stocks that were bought by at least two gurus during the quarter, but did not record any sells. GuruFocusConsensus Picks shows these companies included names like Maplebear Inc. (CART, Financial) and ARM Holdings PLC (ARM, Financial), which recently had their initial public offerings.

A brief look at sells

On the sell side, GuruFocus Hot Picks found that investors were shedding shares of a number of companies as well. While World Wrestling Entertainment Inc. (WWE, Financial) and Black Knight Inc. (BKI, Financial), among several others, are listed, they were not necessarily sold. Rather, these companies were acquired or merged with other companies and, therefore, are recorded as a sale in our database. As such, Janus Henderson Group PLC (JHG, Financial) actually recorded the largest number of sell transactions for the period.

A closer look at Industry Trends

As for gurus' investments within individual sectors, the GuruFocusIndustry Trends page shows the heaviest buying occurred in the software industry, driven by the recent craze for artificial intelligence technology. However, several other industries saw good numbers as well.

International exposure

Beyond the U.S., GuruFocus'Geographic Trends shows other areas of the world where gurus found potential value opportunities.

You can see their overall exposure to different countries in the map below.

During the quarter, a number of well-known gurus were making large bets ininternational companies by either entering new positions or expanding their existing holdings. For example, John Paulson (Trades, Portfolio) established a stake in Anglogold Ashanti PLC (AU, Financial) and boosted his investment in Horizon Therapeutics PLC (HZNP, Financial). Likewise, Michael Burry (Trades, Portfolio) boosted his holdings of Alibaba Group Holding Ltd. (BABA, Financial), JD.com Inc. (JD, Financial) and Euronav NV (EURN, Financial).

What about ETFs?

As for exchange-traded funds, gurus appeared to be loading up on exposure to the Standard & Poor's 500 Index.

Value opportunities abound

Even as the market continues to contend with inflation and rising interest rates, not to mention geopolitical conflicts, gurus' trading activity proves there are plenty of investment opportunities available in the current environment.

Related Guru Screens you may be interested in:

Real-Time Picks

Aggregated Portfolio

Consensus Picks

Hot Picks

Guru Bargains

Industry Trends