These funds have not only been buying Berkshire Hathaway, Walgreens Boots Alliance and Starbucks in the last 3 months, but they have also shown a particular interest in certain industrial sectors, such as finance, medical and retail.
Among the medical stocks that mutual funds have been buying are Cigna and 11 others, such as HCA Health Services and UnitedHealth. In addition to Starbucks and Walgreens, mutual funds have found Domino’s Pizza, Kohl’s and Tractor Supply particularly appealing among retail-sector stocks. Finally, besides Buffet’s Berkshire Hathaway, funds have been purchasing 11 financial-sector stocks. They have shown special interest in real estate investment trusts (REITs), such as Simon Property, which runs shopping malls.
Mutual funds — in light of the recent tech stock sell-off as well as the market correction — have seemingly taken cautious positions. Many of the top growth stocks are missing from the list of recent buys.
Berkshire Hathaway Heads the Way
6 of the top mutual funds have made purchases of Berkshire Hathaway, and this investment has approached $250 million. There is sound reasoning for this. On November 5 alone, the stock rose 5%, in response to a nearly 100% increase in earnings in the third quarter, to nearly $7 billion.
Of the top 5 stocks mutual funds have been buying, 3 of them were medical stocks. Care provider UnitedHealth received nearly $160 million in investment from 12 funds while fellow care provider Cigna received more than $100 million in investments from 12 funds as well. HCA Health Services, which operates hospitals, received more than $150 million in investment from 10 funds.
Others stocks that received significant investment from mutual funds included telecom giant Comcast, which received more than $150 million from 13 funds, and tobacco-product producer Altria, which saw an investment of more than $100 million from 8 funds.
Mutual Funds Seeking Large-Capital Stocks
Mutual funds have been seeking safe harbor in large-capital stocks. 5 of the twenty companies listed in the IBD Big Cap 20 were among those receiving new investment. This included Walgreens, UnitedHealth, Cigna, Intuit and Starbucks. Starbucks earned a spot in the index only this month, after an impressive earnings report on November 1.
What the Top Funds Are Selling
TJX, which operates large retail chain stores such as TJ Maxx and Marshalls, was among the most sold stock by the top mutual funds. While 4 funds bought the stock, 11 sold, leaving a net minus of 7. Other stocks that were net sellers included Twenty-First Century Fox, which had 4 buyers and 10 sellers, and Intuit, which had two buyers and 7 sellers.