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In these volatile markets, we wanted to make sure our valued members get access to the best information possible to help you navigate the uncertainty. This is why you may have noticed the recent enhancements to our Stock Ideas Update email.

Each week, we are sending you education and stock ideas that are relevant to today’s market. Markets like these expose bargains, so we want to highlight a few ideas that can help you replenish your portfolio through sound strategies with good long-term performance.

If you find this information valuable and want an edge throughout this market volatility, you can access robust stock screens and evaluations through A+ Investor, a suite of rigorous investment tools that includes diversification analysis, stock evaluators and more than 50 stock screens updated every day.

This week we look at the top stocks held by AAII members. These are companies that show up the most in A+ Investor portfolios at AAII.com, and they give an insight into the stocks that real investors are attracted to right now. 

Most Popular A+ Investor Stocks

What are AAII’s A+ Investor members invested in these days? You might be surprised.

AAII’s A+ Investor portfolio tools and technology team tracks stocks that members hold in their portfolio. Going through all the portfolios of members who have created a portfolio, A+ Investor looks at the most popular holdings among the portfolios, tallies the positions in individual stocks, then ranks those stocks by most popular holdings.

The most widely held names offer a portrait of A+ Investor members. Many investors choose to invest in companies and industries they are passionate about and believe will be successful over the long term.

These are primarily large blue-chip stocks, ranging from the hundreds of billions of dollars in market capitalization to more than $1 trillion. Unsurprisingly, then, most of the stock holdings are big, stable names known to most Americans. Some of the technology names show durability with strong estimated earnings per share growth prospects. A few of the companies possess typical defensive characteristics such as health care and cyclical businesses and/or high dividend yields.

Wisdom of the Crowd

The table below shows the 25 most popular stock holdings among A+ Investor members. The list includes holdings across diversified sectors such as: technology, health care, consumer cyclicals and financials.

Today’s A+ Investor Stock Ideas

Top 25 A+ Investor Stock Holdings (Ranked by Most Popular Portfolio Holdings)

Apple Inc. (AAPL) took home top honors as the most-held stock in portfolios by A+ Investor members as of April 27, 2020. The maker of smartphones, tablet devices and wearables is a top holding as investors expect demand for a 5G (wireless network) upgrade cycle to support growth later this year. Analysts are forecasting earnings to grow, on average, by 12.6% over the next three to five years. Apple has a strong balance sheet with about $207 billion in cash and investments as of the end of December 2019. Its high-margin services segment and its expanding capital return program could all serve as catalysts for Apple in the years ahead.

Microsoft Corp. (MSFT), the most valuable stock on the list by market capitalization at $1.3 trillion, is the second-most widely held stock in A+ Investor portfolios. Microsoft has made strides in building its cloud computing division and making its Azure platform one of the top brands in the high-growth cloud services business. Microsoft has several long-term growth opportunities in machine learning and artificial intelligence (AI). Analysts are forecasting earnings to grow, on average, by 14.6% over the next three to five years.

Rounding out the top three most popular holdings is AT&T Inc. (T), with over 45% more A+ Investor members holding it in their portfolio than the stock in fourth place, Verizon Communications Inc. (VZ). No doubt AT&T’s 6.8% dividend yield is a draw. Analysts are forecasting earnings to grow, on average, by 3.7% over the next three to five years and note AT&T’s strong position given its premium content, direct-to-customer relationships, technology platform and high-speed network.

Popularity Is a Difficult Trait to Assess

Mark Hulbert, founder of the Hulbert Financial Digest, notes in an article written for the AAII Journal that popularity is one of those traits whose desirability in the investment arena is difficult to assess. Some investors simply believe that a stock’s popularity is a good thing.

On the other hand, Hulbert notes that contrarians argue that popular stocks should be avoided. He states, “if given a choice between two stocks with similar financials, they would prefer the less-popular one, on the assumption that it has not yet been discovered.” Of course, he admits, often there are no such clear-cut choices.

Which “popularity” theory is right? Is it possible to harness the wisdom of the crowd to generate fresh investing inspiration? The debate continues.

In any case, we believe it is worth keeping tabs on what investors are doing. The list enables investors to pinpoint top stock holdings that are popular with A+ Investor members. The data points to a primary characteristic of investors. They are inclined to invest in companies that they have a general understanding of and which they perceive as stable, long-term investments.

By keeping an eye on what AAII’s A+ Investor members are doing, you have one more piece of the investment puzzle that may help aid your investment approach.

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