This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Apple Favorite for 7 Top Hedge Fund Managers

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( Insider Monkey) --Nowadays readers have access to Websites that track the daily changes in billionaires' wealth. We wanted to track the performance of billionaires' top stock picks. By looking at our Billionaire Hedge Fund Index , investors may be able to decide whether it makes sense to imitate billionaires' stock picks without paying them hefty fees.

Warren Buffett , George Soros , John Paulson , Jim Simons , David Einhorn , Ray Dalio , and T. Boone Pickens are among the 39 billionaires we're tracking. Billionaire fund managers' top 30 stock picks returned 16.7% in 2012 as of March 16, vs. 12.3% gain in the S&P 500 ETF (SPY). Here are the top 7 stocks they're crazy about:

1. Apple (AAPL) is the most popular stock among billionaire fund managers. Nearly half of them had a large position in Apple at the end of December.

Apple is also the most popular stock among "ordinary" millionaire hedge fund managers (see the 10 most popular stocks). The stock gained 45% this year as of March 16. We have been extremely bullish about Apple since we started writing here at Trading Deck at the end of September.

Apple was the most popular stock among hedge funds at the end of September as well. We have been telling you that technology stocks are extremely undervalued as a sector and Apple had single-digit forward PE multiple at the time. Today we are still very optimistic about the stock. Its 2012 forward PE ratio is 13.5 which is still less than the market. This is a stock that is expected to increase its earnings by nearly 20% per year over the next 5 years. It should easily trade above $800 over the next couple of years. Ken Griffin had the largest position in Apple at the end of December.

2. Google (GOOG) is the second most popular stock among billionaire hedge fund managers. The stock had a disappointing performance so far in 2012, down 3.2% as of March 16.

We are optimistic about Google as well. The stock's 2012 forward PE ratio is 17 which is more than 25% higher than that of Apple's. They have similar expected growth rates though. We think Google deserves a slight premium over Apple because it is less exposed to competition from other search engines. This is not a stock that will go up 50% this year but it should deliver healthy returns over the long run.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,172.68 -107.06 -0.62%
S&P 500 1,994.29 -16.11 -0.80%
NASDAQ 4,527.6890 -52.10 -1.14%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs