The second quarter of 2023 was characterized by moderating inflation and signs the economy remains resilient despite interest rates rising. As such, the S&P 500 gained 7.90% during the three months ended June 30, while the Dow Jones Industrial Average increased 2.40% and the Nasdaq Composite Index rallied 13.11%.
Further, enthusiasm around the potential for artificial intelligence technology drove tech stocks, particularly chipmakers, higher.
This was reflected in gurus’ top buys for the quarter. According to GuruFocus Hot Picks, a Premium feature that allows investors to screen for the stocks that had the highest number of buys or sells based on the most recent regulatory filings, the five most popular buys, based on net buys, among gurus during the quarter were Nvidia Corp. (NVDA), Taiwan Semiconductor Manufacturing Co. Ltd. (TSM), Danaher Corp. (DHR), Qualcomm Inc. (QCOM) and Advanced Micro Devices Inc. (AMD).
Investors should be aware the data in this article is based on 13F filings for investing firms and portfolio updates for mutual funds, which do not provide a complete picture of a guru’s holdings. The 13Fs include only U.S. common stocks, while the mutual fund updates typically include both U.S. and foreign common stocks. Neither includes other assets or investments such as bonds, credit, etc. All numbers are as of the quarter’s end only; it is possible the gurus may have already made changes to the positions after the quarter ended. However, even this limited data can provide valuable information.
Nvidia
With a total of three net buys, Nvidia (NVDA) recorded 17 buys and 14 sells among gurus during the quarter. Holding a combined equity portfolio weight of 97.67%, 30 gurus own the stock.
Among the gurus buying the stock were Frank Sands and Steven Cohen, while Ken Fisher and Catherine Wood were among those reducing their holdings. Overall, there has been a more bullish trend toward the stock over the past several quarters.
The Santa Clara, California-based semiconductor chip manufacturer has a $1.22 trillion market cap; its shares were trading around $495.42 on Thursday with a price-earnings ratio of 119.67, a price-book ratio of 44.51 and a price-sales ratio of 37.80.
The GF Value Line suggests the stock is significantly overvalued currently based on its historical ratios, past financial performance and analysts’ future earnings estimates.
At 82 out of 100, the GF Score indicates the company has good outperformance potential, driven by solid ratings for profitability, growth and financial strength. The value and momentum ranks, however, are low.
Taiwan Semiconductor Manufacturing
Recording 17 buys and 13 sells for the quarter, resulting in four net buys, Taiwan Semiconductor Manufacturing (TSM) is held by 30 gurus. They have a combined equity portfolio weight of 51.76%.
The gurus buying the stock included David Tepper and Philippe Laffont, while Sarah Ketterer and Steve Mandel were curbing their holdings. Overall, gurus have been more bullish toward the stock in recent quarters, though just barely.
The Taiwanese manufacturer of semiconductor chips has a market cap of $486.54 billion; its shares traded around $93.81 on Thursday with a price-earnings ratio of 15.53, a price-book ratioof 4.46 and a price-sales ratio of 6.39.
According to the GF Value Line, the stock is significantly undervalued currently.
Supported by solid ratings for all five criteria, the GF Score of 100 implies the company has high outperformance potential.
Danaher
Danaher (DHR) recorded 16 buys and seven sells, generating nine net buys, for the three-month period. The stock is being held by a total of 28 gurus with a combined portfolio weight of 35.54%.
During the quarter, the stock was being bought by gurus like Andreas Halvorsen and Al Gore’s Generation Investment. Cohen and Jim Simons’ Renaissance Technologies were among those selling. In recent quarter, the sentiment toward the stock has been pretty bullish.
Headquartered in Washington D.C., the health care conglomerate, which manufactures products for the life sciences, diagnostics, biotech and environmental and applied solutions markets, has a $196.39 billion market cap; its shares were trading around $265.99 on Thursday with a price-earnings ratio of 31.22, a price-book ratio of 3.80 and a price-sales ratio of 6.48.
Based on the GF Value Line, the stock appears to be fairly valued currently.
The GF Score of 89 means the company has good outperformance potential on the back of high ratings for profitability, growth and financial strength as well as more moderate value and momentum ranks.
Qualcomm
Generating six net buys, Qualcomm (QCOM) was bought by 15 gurus and sold by nine gurus during the quarter. With a combined equity portfolio weight of 20.26%, 24 gurus own the stock.
The gurus scooping up shares included Jeremy Grantham and Joel Greenblatt, while it was being sold by investors like George Soros and Simons’ firm. Gurus overall have been fairly bullish on the stock over the past several quarters.
The San Diego-based semiconductor company has a market cap of $128.38 billion; its shares traded around $115.04 on Thursday with a price-earnings ratio of 15.08, a price-book ratio of 6.20 and a price-sales ratio of 3.35.
The GF Value Line suggests the stock is modestly undervalued currently.
With a GF Score of 94, the company has high outperformance potential. It received solid ratings for all five criteria.
Advanced Micro Devices
Advanced Micro Devices (AMD) saw 15 buys and three sells, resulting in 12 net buys, during the quarter. With a combined weight of 20.67%, the stock is being held by 17 gurus.
Gurus who were loading up on the stock included Daniel Loeb and Mario Gabelli, while Caxton Associates and the CI Select Canadian Equity Fund were selling shares. Regardless, the overall sentiment toward the stock has been bullish for the past several quarters.
The semiconductor company headquartered in Santa Clara, California has a $170.08 billion market cap; its shares were trading around $105.27 on Thursday with a price-book ratio of 3.08 and a price-sales ratio of 7.78.
According the GF Value Line, the stock is currently modestly undervalued.
The GF Score of 90 indicates the company has good outperformance potential, receiving high ratings for profitability, growth, financial strength and momentum. The value rank is more moderate.
Other top picks
Additional stocks that had high buying activity during the quarter included Bank of America Corp. (BAC), The Cigna Group (CI), The Walt Disney Co. (DIS), Elevance Health Inc. (ELV) and Pfizer Inc. (PFE).
Originally published on GuruFocus.com
