(Story updated to add that Deutsche Bank reiterated its "buy" rating on Gilead Sciences, but lowered its price target to $57.)
) -- Although many of the best mutual fund managers were ultra-cautious late last year, they still made major commitments to select stocks, underscoring their confidence in the companies.
, which tracks the portfolio changes of 26 top-performing mutual funds for its "Ultimate Stock-Pickers" series, published a list of 10 stocks those managers bought, either to establish a new position or to add to an existing one.
The stock pickers' choices were eclectic and, in one instance, surprising. The managers at the
Fairfax Financial Holdings Fund
made a big addition to a conservative choice, the respected but underperforming health-care-products company
Johnson & Johnson
. At the same time, it added to its stake in the troubled Canadian mobile-device maker
Research In Motion
also bought Research In Motion shares, adding to its stake by more than 60% in the fourth quarter.
But the stock seeing the most buying was biotechnology firm
Hartford Capital Appreciation Fund
established a new position in it, buying nearly 4 million shares, while the
Parnassus Equity Income Fund
doubled its stake, to 4 million shares, in the quarter.
Gilead also has the best ratings from analysts of the group, garnering 15 "buys." But last week, Deutsche Bank, while reiterating its "buy" rating on the firm's stock, lowered its price target to $57 from $66 on expectations of price discounts on its HPV drugs.
Parnassus bought a significant new stake in brokerage firm
, picking up more than 10 million shares.
International banking firm
and the pharmaceuticals industry's biggest player,
, were the only other companies to see two funds add to their positions in the period.
Also among the 26 fund managers on the Ultimate Stock-Pickers roster are the
Dodge & Cox Stock Fund
and Warren Buffett's
"Managers send signals about the level of conviction they have in a position by how much of their portfolio (on a percentage basis) they're willing to commit to a given name at any point in time," Morningstar said in a research note. Although it found that the fourth quarter "was probably one of the least-active periods for stock buying that we've seen in quite some time."
Indicative of that, the top "buys" had only two of the 26 funds buying their shares, compared to prior periods when there were usually four of five managers buying a particular stock, Morningstar said.
Here are the
of 2011 by the "Ultimate Stock-Pickers" funds in order of value:
Gilead Sciences, with a market value of $16 billion, develops drug therapies to treat life-threatening infectious diseases. It has a particular focus on developing treatments for HIV and hepatitis B.
Its shares are up 14% this year and have a three-year average annual return of 1.3 %. Analysts give them 15 "buy" ratings and seven "holds," according to a survey of analysts by S&P. Analysts expect it to earn $3.40 per share this year and that earnings will grow 30% in 2013.
GlaxoSmithKline, with a market value of $70 billion, is one of the world's largest pharmaceuticals companies.
Its shares are down 2.75 % this year and have a three-year average annual return of 14.5%. Analysts give Glaxo four "buy" ratings, four "holds," and one "sell," per S&P. Standard & Poor's has it rated "sell" on valuation concerns given the ratings firm's outlook for slow sales growth in the next few years.
Research In Motion
Research in Motion, with a market value of $7 billion, sells wireless handsets, software, and services and is known primarily for its BlackBerry line of devices.
Its shares are down 6.3% this year and have a three-year average annual loss of 30%. Analysts give the stock two "moderate buy" ratings, 25 "holds," three "moderate sells," and three "strong sells," according to a survey of analysts by
Jefferies & Co. analysts say there is a more than 50% chance Research in Motion will preannounce poor fiscal fourth quarter earnings, which ended in February. They also forecast a "very weak" May quarter on lower sales of its phones. The firm's analysts expect earnings of 69 cents per share on revenue of $4.2 billion, down from a prior estimate of 82 cents per share on revenue of $4.6 billion. They also cut their price target to $12 from $15.
Citigroup, with a market value of $95 billion, is a global financial-services company doing business in more than 160 countries.
Its shares are up 30% this year and have a three-year average annual return of 32%. Analysts give them 11 "buy" ratings, seven "buy/holds," five "holds," two "weak holds," and one "sell," according to S&P, which has it rated "hold."
Devon, with a market value of $30 billion, is one of the largest independent oil and natural gas exploration and production companies in North America.
Its shares are up 19.6% this year and have a three-year average annual return of 20%. Analysts give Devon 14 "buy" ratings, eight "buy/holds," and six "holds," according to a survey by S&P. S&P has a "buy" rating and an $84 price target on its shares, a 14% premium.
Illinois Tool Works
Illinois Tool Works is a manufacturer of a range of industrial products and equipment including industrial packaging, electronics, and polymers and fluids.
Its shares are up 20% this year and have a three-year average annual return of 29%. Illinois Tool Works has nine "strong buy" ratings and seven "holds," according to a survey by
Schwab, with an $18 billion market value, is in the brokerage, banking, and asset-management businesses.
Its shares are up 24% this year and have a three-year average annual return of 4.8%. Analysts give them five "buy" ratings, three "buy/holds," and 13 "holds," according to a survey of analysts by S&P.
Johnson & Johnson
Johnson & Johnson, with a market value of $176 billion, ranks as the world's biggest and most diverse health-care company. It has three divisions: pharmaceuticals, medical devices and diagnostics, and consumer products.
Its shares are long-term underperformers. The stock is down 0.3% this year and has a three-year annualized return of 12.5%. Morningstar says it expects annual sales growth will average 5% during the next 10 years. Analysts give Johnson & Johnson 10 "buys," five "buy holds," and 13 "holds," according to S&P.
Tiffany, with an $8 billion market value, is an international jeweler and specialty retailer, with a wide range of branded products.
Its shares are up 0.7% this year and have a three-year average annual return of 12.2%. Analysts give the stock nine "buy" ratings, two "buy/holds," 12 "holds," one "weak hold," and one "sell," according to a survey of analysts by S&P. S&P has it rated "strong buy," with an $80 price target, which is a 20% premium to the current price.
RS Capital Appreciation Fund
initiated a new stake in the company that it has been in and out of before, calling the company a "branded products company disguised as a retailer."
Danaher, with a $37 billion market value, is a diversified manufacturer, housing more than 40 industrial brands of products, including electronic, medical, and water-test equipment, precision motors and controls, and tools and components.
Its shares are up 12.4% this year and have a three-year average annual return of 28%. Analysts give Danaher 15 "buy" ratings, five "buy/holds," and four "holds," per S&P. The RS Capital Appreciation Fund doubled its stake in Danaher that it initiated in the third quarter of 2011.
>>To see these stocks in action, visit the
portfolio on Stockpickr.
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