"Steal" These Two Stock Ideas From The Best Investors In The World

By the time this is in your inbox, the quarterly 13F deadlines will have gone.

The headlines will probably still be with us:

• "What did Warren buy?"
• "What did Ackman do?"
• "Is Cathie Wood buying or selling?"
• "Who sold NVIDIA?"
• "Are the Tiger Cubs back?"
• "What is Icahn doing?"
• "What are the stocks the big institutions love most?"
• "Which ones are they selling?"

For some bizarre reason, the filings of the two largest index fund purveyors, Vanguard and BlackRock (BLK), receive enormous media attention.

Lots of ink, real and digital, will be spilled with headlines and topics very similar to these.

Too many people will click on them and look for serious investment advice.

Most of it is not worth the time to read. The odds of you making money from the information are small. There are too many eyeballs reading the same stuff for you to gain any edge.

Most of the more famous investors that everyone clamors to read about have underperformed for years.

They are old and very rich. They do not have the same goals and expectations as those of us in the accumulation phase of life. They have nothing at all in common with those looking for income-producing investments.

That doesn't mean you should ignore 13F filings. To the contrary, 13F filings can be one of your best resources as an investor.

The trick is knowing which ones to follow.

Let me show you…

See, you haven't heard of most of the 13F filings to follow.

I mentioned Donald Smith and Company last quarter, and I will mention them at least once every quarter when the filings are released.

This is a very boring investment management firm that almost everyone knows about. They are never on CNBC, not mentioned anywhere on Reddit, and seem to eschew publicity for the most part.

The firm focuses on stocks trading in the bottom 10% of all stocks, ranked by price-to-book value.

I know the popular claim is that price-to-book value is a meaningless metric with no value anymore.

Someone forgot to tell Donald Smith and Company.

Using this simple deep-value approach, the firm has beaten the market solidly.

Over the last decade, where growth has been king and value investing has been said to die away, focusing on price-to-book value has allowed Donald Smith and Company to beat the market by a decent margin.

Over the last five years, as the "Magnificent Seven" drove the S&P 500 higher, owning the terrific thirty top positions held by this firm would have crushed the S&P 500.

It is not exciting, it is not in the headlines, and you will not impress your day trading buddies when you tell them what you own, but if history is a guide, odds are you will make market-beating money.

Right now, you would own an eclectic mix of insurance companies, gold stocks, construction companies, homebuilders, and shipping stocks that are way off the media’s radar screen.

You would buy hotel REITs, fertilizer, and steel companies at a fraction of their asset value.

The question you have to answer is: “Are you trying to make money or gamble?”

This leads me to Tweedy Browne. This firm has been around for over 100 years and is the direct descendant of Ben Graham. In fact, they were one of Ben Graham’s brokers, and one of Buffett’s responsibilities at Graham Newman involved running stock certificates between Ben’s office and Tweedy’s.

The firm has grown to a scope where they can no longer print money buying small companies at under-asset value, but they have stayed true to the concepts of value investing and, above all, maintaining a margin of safety.

There is a very short list of money managers my wife has been instructed to hand our assets over to should I get hit by a bus or suffer the finality of an Orioles loss in Game 7 of the World Series.

Tweedy Browne is at the top of that list.

I always check their filings and read their commentaries. If I see them holding a lot of cash, I get very nervous.

Right now, they are not holding much cash, but most of their buying has been in Europe and Japan.

They have been adding to their largest position, an agricultural and construction equipment maker based in the United Kingdom. CNH Industrial (CNH) is one of the dominant firms in the industry. While short-term results have been weak, the eventual demand from the global agricultural industry will grow at a pace that allows the company to generate enormous free cash flow.

A significant portion of that cash will go towards paying a dividend and buying back stock.

At the current price, the stock trades for six times its earnings and yields 4.44%.

Tweedy has also been buying shares of dental supply company Envista (NVST). The company makes devices to help keep teeth in heads and smiles shining, such as dental implant systems, prosthetics, clear aligners, brackets and wires, and orthodontic and lab products.

Looking at Envista’s financials and operations, I have to say that this company is begging to be taken over by a large competitor or private equity firm.

The business is worth a lot more than the current stock price.

Stealing ideas from the best money managers can be very profitable. The trick is to be sure you are stealing from the right ones.

If you want more of my value portfolios, one currently boasts a 100% win rate, Here

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