Procter & Gamble

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But Johnson & Johnson isn't the only huge blue chip that hedge funds turned to last quarter. Procter & Gamble ( PG) was another one. Like Johnson, Procter is a prototypical blue chip: the $189 billion firm owns household brands such as Tide, Charmin and Cover Girl, totaling more than two dozen individual brands that bring home more than $1 billion in annual revenues.

Hedge funds piled into P&G in the last quarter, buying up 22.4 million shares to nearly double their ownership in the firm to $3.8 billion. (P&G is also one of Warren Buffett's holdings.)

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Procter is trying to be a more cost-conscious company in 2012. Most significantly, it's doing that by working to pull $10 billion in costs out of its income statement, boosting margins and ultimately hiking the amount of free cash that's available to give to shareholders. A mature sales channel in the U.S. (with already sticky consumers) provides a backstop for revenues while exposure to emerging markets provides some pretty significant growth prospects. That combination of stability and growth is ideal for a big name like P&G, even if it's not quite as defensive as Johnson & Johnson's healthcare posturing.

While the firm isn't nearly as flush with cash on its balance sheet, P&G still generates mountains of free cash on a quarterly basis. That performance currently supports a 3.3% dividend payout for the firm's shareholders. Here again, defensive investors have a good core income holding by following hedge funds into this stock.

I aso featured P&G in " 5 Stocks Ready to Rally."

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