Investing

Goldman Sachs Finds 5 Top Stocks Mutual Funds Have Loaded Up On

Lee Jackson

Published: August 23, 2019 6:30 am

Last Updated: January 30, 2020 5:03 pm

To say that mutual fund portfolio managers tend to follow the herd is an incredible understatement, and it always has been. While publicly they sometimes seem reticent to discuss their holdings, especially stocks they are short sellers of, the reality is that managers tend to talk among themselves as they run in the same circles. Often the discussions are centered around their portfolios and what is in them.

With a very volatile market in play this year, many top funds have been avoiding stocks that have large exposure to China. In a new Goldman Sachs research report, the analysts found the stocks on which mutual funds are the most overweight and underweight versus the benchmark, which in some cases is the S&P 500. The Goldman Sachs team then places the various stocks in baskets of 50.

24/7 Wall St. was intrigued with the following five stocks, which are the largest overweight positions in the Goldman Sachs portfolios, as they are high-conviction stocks on which the portfolio managers tend to agree.

AIG

After a nice rally, shares of this top financial and insurance player were hit earlier in the summer and offer a solid entry point. American International Group Inc. (NYSE: AIG) provides insurance products for commercial, institutional and individual customers, primarily in the United States, Europe and Japan.

The company’s Commercial Insurance segment offers general liability, environmental, commercial automobile liability, workers compensation, excess casualty and crisis management insurance products, as well as various risk-sharing and other customized structured programs; commercial, industrial and energy-related property insurance; aerospace, political risk, trade credit, surety and marine insurance; and various insurance products for small and medium-sized enterprises.

Shareholders of AIG receive a solid 2.36% dividend. The Wall Street consensus price target was last seen at $59.69. The shares closed up slightly on Thursday at $53.75.

Comcast

This top media and entertainment conglomerate remains a Wall Street favorite. Comcast Corp. (NASDAQ: CMCSA) is the largest U.S. provider of cable services, with over 22 million basic subscribers. It owns NBCU, which includes the NBC TV Networks, Telemundo, MSNBC, USA, Syfy, Bravo, E!, CNBC and several other cable networks, as well as Universal Films and Universal Theme Parks.

Comcast has invested in technology to build an advanced network that delivers among the fastest broadband speeds and brings customers personalized video, communications and home management offerings. Though, it is also one of the companies with the biggest corporate debt.

With the presidential election cycle starting up next year, this company stands to benefit big time, and a stunning number of the fund managers own the shares. Comcast is also a solid defensive play for nervous investors.

Comcast shareholders receive a 1.92% dividend. The posted consensus price target is $49.26, and the shares closed most recently at $43.77 apiece.

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Salesforce

This top company has reported solid fiscal 2019 results so far as billings have drastically improved, and this past quarter was no exception. Salesforce.com Inc. (NYSE: CRM) provides enterprise cloud computing solutions, with a focus on customer relationship management to various businesses and industries worldwide. It has one of the most valuable tech brands in the world.

It offers enterprise cloud computing applications and platform services, including Sales Cloud that enables companies to store data, monitor leads and progress, forecast opportunities, gain insights through relationship intelligence and collaborate around sales on desktop and mobile devices.

The company also provides Service Cloud, which enables companies to deliver personalized customer service and support, as well as connect their service agents with customers on various devices, and Marketing Cloud, which enables companies to plan, personalize and optimize customer interactions.

In addition, Salesforce announced earlier this month that it has completed its acquisition of Tableau Software, bringing together the world’s number one customer relationship management company with the world’s number one analytics platform.

The consensus price target here is $182.72. The stock ended most recently trading at $148.24, but shares were up big in the Friday’s premarket in the wake of a solid earnings report late Thursday.

ServiceNow

This stock has had an incredible run, but it was hit hard in the summer and is offering a great entry point. ServiceNow Inc. (NYSE: NOW) develops and sells a hosted, subscription-based suite of services designed to automate various IT department functions, such as help desk, operations management and change/release management.

The company also sells a number of applications that automate various self-service related applications outside of the IT department, such as HR onboarding, facilities requests and governance, risk and compliance.

The posted consensus price target for ServiceNow is $317.09, and the stock closed trading at $264.64 a share on Thursday.

Visa

This top credit card issuer is becoming a huge leader in digital pay. Visa Inc. (NYSE: V) operates the world’s largest retail electronic payments network. The company provides processing services and payment product platforms, including consumer credit, debit, prepaid and commercial payments, that are offered under Visa and related brands. According to Nilson estimates, the company is the largest global credit network (as measured by volume) and the second-largest global debit network.

Visa is not a bank and does not issue cards, extend credit or set rates and fees for consumers. Visa’s innovations, however, enable financial institution customers to offer consumers more choices: pay now with debit, pay ahead of time with prepaid or pay later with credit products.

Visa remains very well liked across Wall Street, as a large percentage of portfolio managers own shares of the company. It is also one of the most valuable brands in the world.

Investors in Visa are paid a small 0.56% dividend. The analysts’ consensus price objective the shares is $200.50, and the stock was last seen trading at $180.09 per share.

While these top holdings probably should come as no surprise to our readers, they make sense as they are huge, dominate much of their specific business lines, are very liquid, and look to continue to maintain their growth trajectory for the foreseeable future.