With Merckand Eli Lilly leading the way, stocks from the medical sector spearheaded the latest list of new buys the best mutual funds.
Oil and gas stocks such as EOG Resources, Valero Energy and Hess also continue to fuel demand.
After Big Oil powered big profits and stock gains in 2021 and so far this year, analyst estimates now generally point to a slowdown in 2023.
Wall Street expects EOG Resources, for example, to deliver 68% earnings growth this year, but forecast just 6% EPS growth in 2023. Valero is even more dramatic. Estimates call for an 892% earnings increase this year, followed by a 37% decrease next year.
Checking the new buys and sells by the best mutual funds each month helps investors stay on track of any emerging signs of rotations into or out of certain sectors.
Big Pharma Holds 4 Of 5 Top Buys By The Best Mutual Funds
Including Merck and Eli Lilly, drug and biotech stocks account for four of the top five investments by leading mutual funds. Amgen and AbbVie also earn that distinction.
Such institutional demand has lifted LLY and MRK above and beyond their most recent buy zones. AMGN is also extended. The biotech has posted several weeks of tight trading, which could be like a coil about to spring a new move.
With its relative strength line already at a new high, AbbVie continues to work on a chart pattern showing a 176.01 buy point.
Specialty chemicals firm Linde round out the biggest new investments by the best mutual funds. The United Kingdom-based producer of industrial gases trades just above its recent buy zone from a double-bottom breakout.
Top Funds Cultivate More Sectors
The best-performing fund managers also placed bets on Charles Schwab, as well as regional banks, savings & loans, and other financial stocks.
Rural lifestyle retailer Tractor Supply has also plowed a spot on the top 10 new buys, raking in an estimated $280 million from these top money managers. Tractor Supply is joined by farm machinery giant Deere, which has also tilled its way onto the list, taking in over $215 million.
Top funds also planted the seeds for potential growth in agricultural powerhouse Archer Daniels Midland. In total, these money managers invested roughly $147 million in ADM stock, which is trying to reclaim a buy point it first cleared in late October.
Smart Money Adds Retail Stocks To Holiday Shopping Lists
With the holidays here, the best mutual funds picked up shares in a range of retailers.
Auto parts retailer AutoZone joined yogawear pioneer Lululemon Athletica. Wingstop, Casey's General Stores, Sprouts Farmers Market and Academy Sports & Outdoors also found a seat at the table.
ASO stock, which was featured last month while setting up a new buy point, bolted higher on earnings Tuesday. The sporting equipment retailer is now extended.
Reflecting the volatility in the market indexes, Wingstop continues to taste-test the top of its buy zone. The stock gapped up in huge volume on Oct. 26 and has bounced in and out of the buy zone since. Amid the volatility, Wingstop has held support at its 50-day moving average, which continues to trend higher.
View the complete list of new buys by the best mutual funds in all sectors.
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
