According to the GuruFocus Scoreboard, where users can sort investing gurus based on their fund performances over specific periods of time, the gurus that posted the highest gains during the most recent year were Catherine Wood (Trades, Portfolio) and Ron Baron (Trades, Portfolio). For full-year 2020, Wood’s Ark Investment Management returned 152.50%, while Ron Baron (Trades, Portfolio)’s Baron Funds gained 148.50%.
While Baron primarily invests in small- and mid-cap stocks with open-ended growth opportunities and defensible niches, Wood focuses solely on stocks that offer disruptive innovation, with the idea that innovation is the key to growth. These investing strategies have many differences, but they are similar in that they are both focused on stocks with high growth potential and businesses that would be difficult or impossible for competitors to imitate.
With this in mind, let’s take a look at the undervalued holdings that appear in both of these top-performing gurus’ portfolios as of the most recent regulatory filings.
Amazon.com
U.S.-based e-commerce giant Amazon.com Inc. (AMZN, Financial) traded around $3,253.38 per share on Oct. 11 while the GuruFocus Value Line assigns the stock a fair value of $3,647.28. Thus, Amazon has a price-to-GF Value ratio of 0.89 and is rated as modestly undervalued by the GuruFocus system.
Wood owned 18,533 shares of Amazon after increasing the holding by 33.16% in the second quarter of 2021. The position has a 0.12% weight in the equity portfolio.
Baron owned 88,810 shares of Amazon at the end of the second quarter after upping his firm’s stake in the name by 0.43%. The position has a 0.70% weight in the equity portfolio.
Other investors that own shares of Amazon include Baillie Gifford (Trades, Portfolio), Ken Fisher (Trades, Portfolio) and Pioneer Investments. Gurus have been buying the stock more than selling it in recent quarters.
Pinduoduo
Pinduoduo Inc. (PDD, Financial), a Chinese interactive shopping platform, traded around $95.07 on Oct. 11 while the GF Value Line assigns the stock a fair value of $168.75. Thus, Pinduoduo has a price-to-GF Value ratio of 0.56 and is rated as significantly undervalued by the GuruFocus system.
Wood owned 1,540,252 shares of Pinduoduo after increasing the holding by 83.99% in the second quarter of 2021. The position has a 0.36% weight in the equity portfolio.
Baron owned 210,109 shares of Pinduoduo at the end of the second quarter after upping his firm’s stake in the name by 33.41%. The position has a 0.06% weight in the equity portfolio.
Other investors that own shares of Pinduoduo include Baillie Gifford (Trades, Portfolio), Chase Coleman (Trades, Portfolio) and Ken Fisher (Trades, Portfolio). Gurus have been buying the stock more than selling it in recent quarters.
Alibaba Group Holding
Chinese e-commerce giant Alibaba Group Holding Ltd. (BABA, Financial) traded around $164.58 per share on Oct. 11 while the GF Value Line assigns the stock a fair value of $373.57. Thus, Alibaba has a price-to-GF Value ratio of 0.44 and is rated as significantly undervalued by the GuruFocus system.
Wood owned 462,651 shares of Alibaba after reducing the holding by 21.69% in the second quarter of 2021. The position has a 0.20% weight in the equity portfolio.
Baron owned 2,327,294 shares of Alibaba at the end of the second quarter after upping his firm’s stake in the name by 0.86%. The position has a 1.21% weight in the equity portfolio.
Other investors that own shares of Alibaba include Baillie Gifford (Trades, Portfolio), Primecap Management and Ken Fisher (Trades, Portfolio). Gurus have been buying the stock more than selling it in recent quarters.
MercadoLibre
MercadoLibre Inc. (MELI, Financial), an Argentina-based e-commerce company, traded around $1,460.01 per share on Oct. 11 while the GF Value Line assigns the stock a fair value of $1,914.33. Thus, MercadoLibre has a price-to-GF Value ratio of 0.76 and is rated as modestly undervalued by the GuruFocus system.
Wood owned 121,521 shares of MercadoLibre after reducing the holding by 5.27% in the second quarter of 2021. The position has a 0.35% weight in the equity portfolio.
Baron owned 73,692 shares of MercadoLibre at the end of the second quarter after upping his firm’s stake in the name by 0.67%. The position has a 0.26% weight in the equity portfolio.
Other investors that own shares of MercadoLibre include Spiros Segalas (Trades, Portfolio), Baillie Gifford (Trades, Portfolio) and Al Gore (Trades, Portfolio). Gurus have been buying and selling the stock in equal measure in recent quarters.
Cerus Corp
Cerus Corp. (CERS, Financial), a U.S.-based company dedicated to safeguarding the world's blood supply, traded around $5.97 per share on Oct. 11 while the GuruFocus Value Line assigns the stock a fair value of $7.13. Thus, Cerus has a price-to-GF Value ratio of 0.84 and is rated as modestly undervalued by the GuruFocus system.
Wood owned 20,942,911 shares of Cerus after reducing the holding by 18.01% in the second quarter of 2021. The position has a 0.23% weight in the equity portfolio.
Baron owned 2,629,967 shares of Cerus at the end of the second quarter after upping his firm’s stake in the name by 29.56%. The position has a 0.04% weight in the equity portfolio.
Other investors that own shares of Cerus include Primecap Management, Jim Simons (Trades, Portfolio)' Renaissance Technologies and Ray Dalio (Trades, Portfolio). Gurus went on a selling spree for this stock in the first quarter, followed by a buying spree in the second quarter.
