A Fresh Batch of Hedge-Fund Picks

While it's unwise to blindly follow any hedge fund's picks, it's certainly useful to comb through them and pick out names worthy of further research. Among other things, we've found that the most popular small-caps among hedge funds generate an excess return of 18 percentage points per year, on average. So, with that in mind, let's take a look at the June-quarter disclosures from Fisher Asset Management -- billionaire Ken Fisher's vehicle -- as revealed by the fund's 13F filing with the SEC. (Picks from previous filings can be found here.)

To begin with, Fisher's two largest single-stock holdings were large healthcare companies. The fund held on to its position in Johnson & Johnson (JNJ), keeping its holding about constant at a little over 10 million shares. Yet, thanks to J&J's climbing stock price, the stock became Fisher's largest position by market value -- and lowered the stock's dividend yield to 2.9%. Still, with a beta of 0.4, J&J remains a potential pick for defensive investors. Meanwhile, the forward price-to-earnings ratio is 16x. However, this is based on analyst expectations of earnings-per-share growth next year, even as recent reports have shown a small dip in net income....371 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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