Over the last three months, the top-performing mutual funds have been heavily buying shares in big-name industry leaders, including Bank of America (BAC), Intel (INTC), Boeing (BA), Abbott Laboratories (ABT) and Charles Schwab (SCHW), investing well over $1 billion in each during that period.
X BofA led the group, with top fund managers scooping up more than $2 billion of the financial giant’s shares. Boosted by that demand, the stock is now around 25% above the 25.45 buy point it cleared in September.
Semiconductor equipment maker Applied Materials (AMAT) and software and analytics leader Adobe (ADBE) both came in just shy of the $1 billion mark, getting investments of approximately $982 million and $932 million, respectively.
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Financial And Chip Stocks Still In Demand
In addition to BofA, seven other bank stocks made the list, joined by six financial sector companies, including Charles Schwab, which was named one of the best online stock brokers for 2018.
Leading portfolio managers also continued to pick up shares in semiconductor stocks, including the aforementioned Intel, Applied Materials and Lam Research, as well as Microsemi (MSCC) and KLA Tencor (KLAC).
Portfolio managers also showed a healthy interest in medical stocks, with five companies from that sector joining Abiomed and Abbot Laboratories on the list, including Express Scripts (ESRX) and Cantel Medical (CMD).
Bases And Breakouts
Just because mutual fund managers have been buying a stock doesn’t mean it’s time for individual investors to pick up shares, especially given that the overall market has come under selling pressure recently. Be sure to run all your stock ideas through a buying checklist and do additional research before making any investment decisions.
On Tuesday, Applied Materials cleared a 58.83 buy point in a later-stage, and therefore riskier, double bottom. Its relative strength line has been trending sharply higher and is just shy of new high ground.
Lam Research is also working on a late-stage double bottom, and has now climbed within 5% of the 218.58 entry.
Scanning and tracking solutions leader Zebra Technologies (ZBRA) leapt past a buy point in January, but pulled back as the stock market fell sharply in early February. But on Feb. 22, Zebra soared on its Q4 earnings report and is now 27% above the initial 112.49 entry.
Adobe also launched a successful breakout in January and has now climbed 14% above the 186.37 buy point.
IBD 50 member SVB Financial (SIVB), which owns Silicon Valley Bank and was just featured in the IBD Stock Analysis, broke out past a 263.19 entry on Tuesday, but is now testing support at the buy point after the resignation of Donald Trump’s top economic advisor Gary Cohn rattled the market.
Stocks Being Sold
Despite being among the top new buys this month, Boeing topped the list of stocks being sold, with 42 net sellers (123 funds selling minus 81 buying).
American Express (AXP) was second, with 40 net sellers (90 funds selling minus 50 buying).
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