Foreword
James Brumley says in Kiplinger Investing:
"Rich people often get perpetually richer for a reason, so it could be worthwhile to study what billionaires and high-asset hedge funds are plowing their long-term capital into."
Any collection of stocks is more clearly understood when subjected to yield-based (dog catcher) analysis, this big billionaire holdings list is perfect for the dogcatcher process. Below are the January 17 data for 33 dividend paying stocks and funds in the Kiplinger collection of 49 big billionaire buys.
Actionable Conclusions (1-10): Analysts Estimated 10.65% To 70.84% Net Gains For Top Ten Billionaire Holdings Come January, 2021
Six of ten big billionaire buy top dividend stocks by yield were also among the top ten gainers for the coming year based on analyst 1-year target prices. (They are tinted gray in the chart below). Thus, this yield-based forecast for these big billionaire dogs was graded by Wall St. Wizards as 60% accurate.
Projections were based on estimated dividends from $1000 invested in each of the highest yielding stocks and the median of their one year analyst target prices, as reported by YCharts. Note: one-year target prices by lone analysts were not applied. Ten probable profit-generating trades projected to January 17, 2021 were:
Fiat Chrysler Automobiles (FCAU) was projected to net $708.35, based on the median of target price estimates from three analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risks 76% more than the market as a whole.
Vistra Energy Corp. (VST) was projected to net $419.82, based on estimates from 11 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risks 57% less than the market as a whole.
General Motors Co. (GM) was projected to net $361.35, based on the median of target price estimates from twenty analysts plus annual dividend, less broker fees. The Beta number showed this estimate subject to risk 38% more than the market as a whole.
Restaurant Brands International Inc. (QSR) netted $240.60 based on a median of estimates from thirty-one analysts, plus dividends. The Beta number showed this estimate subject to volatility 16% more than the market as a whole.
CVR Energy Inc. (CVI) was projected to net $229.35, based on dividends, plus the median of target price estimates from five analysts, less broker fees. The Beta number showed this estimate subject to risk 30% over the market as a whole.
The Brink's Co. (BCO) was projected to net $137.57, based on the median of target price estimates from five analysts, plus annual dividend, less broker fees. The Beta number showed this estimate subject to risks 54% greater than the market as a whole.
American International Group (AIG) was projected to net $171.10 based on dividends, plus the median of target estimates from twenty brokers, less transaction fees. The Beta number showed this estimate subject to risk 16% more than the market as a whole.
Extended Stay America (STAY) was projected to net $164.54, based on dividends, plus the median of target price estimates from thirteen analysts, less broker fees. The Beta number showed this estimate subject to risk 19% over the market as a whole.
Broadcom Inc. (AVGO) was projected to net $1561.49, based on dividends, plus the median of target price estimates from thirty-five analysts, less broker fees. The Beta number showed this estimate subject to volatility 9% less than the market as a whole.
America Movil SAB de CV (AMX) was projected to net $106.48, based on dividends, plus the median of target price estimates from sixteen analysts, less broker fees. The Beta number showed this estimate subject to risk 51% less than the market as a whole.
The average net gain in dividend and price was estimated at 27.45% on $10k invested as $1k in each of these ten stocks. These gain estimates were subject to average risks 26% more than the market as a whole.
Actionable Conclusion (11): (Bear Alert) Analysts Predicted One Billionaire Holding To Show 8.2% Losses to January, 2021
The probable losing trade revealed by Y-Charts to 2021 was:
Apple Inc. (AAPL) projected a loss of $81.97 based on dividend and a median of the target price estimates from forty-four analysts including broker fees. The Beta number showed this estimate subject to risks 25% more than the market as a whole.
The Dividend Dogs Rule
Stocks earned the "dog" moniker by exhibiting three traits: (1) paying reliable, repeating dividends, (2) their prices fell to where (3) yield (dividend/price) grew higher than their peers. Thus, the highest yielding stocks in any collection became known as "dogs." More precisely, these are, in fact, best called, "underdogs".
47 Billionaire Holdings Show Broker Target Gains Or Losses
33 Billionaire Holdings Show Dividend Yields
Actionable Conclusions (11-20): Top 10 Billionaire Holdings By Yield
Top ten big billionaire-bought stocks selected 1/17/20 by yield represented six of eleven Morningstar sectors, and one ETF. A single industrials sector representative took first on their very first year paying any dividend, TransDigm Group Inc. (TDG) [1]. Then one from the energy sector placed second, CVR Energy Inc. [2].
Third, fourth, sixth and ninth places went to consumer cyclical representatives: Extended Stay America Inc. [3], Fiat Chrysler Automobiles NV [4], General Motors Co. [6], and Restaurant Brands International Inc. [9].
The fifth slot was claimed by the lone real estate sector representative in the top ten, VICI Properties Inc. (VICI) [5]. In seventh place was a lone technology firm, Broadcom Inc. [7]. Then, the ETF popped into eighth place, Vanguard Emerging Markets ETF (VWO).
Finally, a single consumer defensive stock placed eighth, Campbell Soup Co. (CPB) [10], to complete the January billionaire-bought top-yield ten.
Actionable Conclusions: (21-30) Top Ten January Billionaire Held Dividend Dogs Showed 10.7%-66.55% Upsides While (31) Five Lowly Down-siders Showed -0.87% To -8.17%
To quantify top dog rankings, the median of analyst price target estimates provided a "market sentiment" gauge of upside potential. Added to the simple high-yield metrics, analyst median price target estimates became another tool to dig out bargains.
Analysts Forecast A 51.59% Advantage For 5 Highest Yield, Lowest Priced Billionaire-Held Dividend Stocks To January 2021
Ten top billionaire-held dividend dogs were culled by yield for this update. Yield (dividend/price) results provided by YCharts did the ranking.
As noted above, top ten Kiplinger billionaire-held dividend dogs selected 1/17/20 showing the highest dividend yields represented six of eleven Morningstar sectors and one ETF.
Actionable Conclusions: Analysts Predicted 5 Lowest-Priced Of The Top Ten Highest-Yield Billionaire Held Dogs (32) Delivering 29.98% Vs. (33) 19.78% Net Gains by All Ten Come January, 2021
$5000 invested as $1k in each of the five lowest-priced stocks in the top ten Dividend Billionaire-held kennel by yield were predicted by analyst 1-year targets to deliver 51.59% more gain than $5,000 invested as $.5k in all ten. The very lowest priced selection, Fiat Chrysler Automobiles NV, was projected to deliver the best net gain of 70.84%.
The five lowest-priced top-yield billionaire holdings as of January 17 were: Fiat Chrysler Automobiles NV; Extended Stay America Inc.; VICI Properties Inc.; General Motors Co.; CVR Energy Inc., with prices ranging from $13.75 to $37.44.
Five higher-priced billionaire holdings as of January 17 were: Vanguard FTSE Emerging Market ETF; Campbell Soup Co.; Restaurant Brands International Inc.; Broadcom Inc.; TransDigm Group Inc., whose prices ranged from $45.91 to $636.66.
The distinction between five low-priced dividend dogs and the general field of ten reflected Michael B. O'Higgins' "basic method" for beating the Dow. The scale of projected gains based on analyst targets added a unique element of "market sentiment" gauging upside potential. It provided a here-and-now equivalent of waiting a year to find out what might happen in the market. Caution is advised, since analysts are historically only 20% to 80% accurate on the direction of change and just 0% to 20% accurate on the degree of change.
The net gain/loss estimates above did not factor in any foreign or domestic tax problems resulting from distributions. Consult your tax advisor regarding the source and consequences of "dividends" from any investment.
Stocks listed above were suggested only as possible reference points for your Kiplinger Billionaire Holdings stock purchase or sale research process. These were not recommendations.
