According to the latest list of new buys by top-performing mutual funds, the leading money managers appear to be focusing on building sector and related stocks like homebuilders NVR (NVR), Toll Bros. (TOL) and KB Homes (KBH), as well as construction equipment maker Graco (GGG), wood products producer Louisiana-Pacific (LPX) and steel maker Allegheny Technologies (ATI).
Mastec (MTZ) and manufactured-home builder Patrick Industries (PATK) also earned a spot on the list, as did Kimball International (KBAL), which makes furniture for the office and hospitality industries, and home furniture maker Bassett Furniture Industries (BSET).
Institutional investors also continued to show demand for top chip stocks, with IBD 50 members Applied Materials (AMAT) and Lam Research (LRCX) making the cut, along with Cohu (COHU) and Texas Instruments (TXN).
Cohu and Lam Research can also be found on IBD’s latest list of stocks expecting 50% earnings growth in Q3.
With tensions rising in North Korea and President Trump promising to significantly boost defense spending, it’s no surprise that major defense contractors Boeing (BA), Northrop Grumman (NOC) and Heico (HEI) are also found on the list.
In last month’s report, top fund managers invested over $1 billion each into four stocks: United Health (UNH) ($1.39 billion), Apple (AAPL) ($1.36 billion), Electronic Arts (EA) ($1.25 billion) and Celgene (CELG) ($1.07 billion).
The latest list doesn’t include any $1 billion-plus bets. The largest total investment was in Boeing, with 23 funds picking up approximately $223 million of shares.
Next in line was Bank of America (BAC), with 27 funds investing $178 million. The company got an additional vote of confidence from Berkshire Hathaway (BRKB) CEO Warren Buffett, who told CNBC on Oct. 3 that he would hold BofA shares for a “long, long, long time.”
Bank of America reports Q3 earnings on Oct. 13.
Bases And Buy Points
But several remain in or near a potential buy zone, including Mastec, Boeing, Toll Bros. and the New York Times (NYT), which has pulled back in recent days and is now testing support at the 50-day line. Note that Toll Bros. is trading at the upper limit of its buy range, while Boeing is now extended.
Stocks Sold By Top Funds
While General Motors (GM) made the list of new buys, with five funds investing $1.2 million, it also led the list of new sells. The net number of funds selling GM (16 selling minus 5 buying) was 11.
Despite the number of funds selling, each of these stocks has been rising, and Cummins entered a 170.78-179.32 buy zone last week.