Morningstar's top stock pickers say these are the 10 highest-conviction stocks they recommend — and which top fund managers recently piled their money into

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traders celebrate Traders celebrating a record-setting day of shorting volatility.

  • Uncertainty has been one of the biggest themes in the stock market in 2020.
  • In their “Ultimate Stock Pickers” series, Morningstar seeks to cut through some of that uncertainty, highlighting high-conviction stock purchases by portfolio managers.
  • Their 10 high-conviction stocks from Q3 2020 are listed below.
  • Visit Business Insider’s homepage for more stories.

The ongoing surge of COVID-19 cases, or a successful and timely vaccine distribution that will save the day?

A long-awaited shift into value stocks, or a continued triumphant march for growth?

A roaring comeback of consumer confidence, or a more cautious and drawn-out recovery?

Inflation or no inflation?

It can be difficult for investors to decide which narratives to buy into. And sometimes, it can be best to follow a path cut by the experts — to buy what they buy.

In their “Ultimate Stock Pickers” series, Morningstar seeks to lay that path clearly by analyzing some of the biggest purchases made by portfolio managers, and combining those findings with their analysts’ research.

“In cross-checking the most current valuation work and opinions of Morningstar’s own cadre of stock analysts against the actions of some of the best equity managers in the business, we hope to uncover a few good ideas each quarter that investors can dig into a bit deeper to see if they warrant an investment,” Morningstar Equity Analysts Malik Ahmed Khan and Eric Compton said in a recent report.

In their most recent edition of the series, the firm highlighted 10 high-conviction stocks — indicating high confidence in their upside — that money managers bought in the third quarter.

“We think of high-conviction purchases as instances when managers have made meaningful additions to their portfolios, as defined by the size of the purchase in relation to the size of the portfolio,” the report said.

While each investors’ needs and goals are different, buying the stocks professional money managers are willing to put large sums into can be an effective strategy.

For investors’ consideration, Morningstar’s 10 most high-conviction stocks from Q3 are listed below from largest to smallest in terms of market cap.

1. Apple Screen Shot 2020 11 23 at 10.21.47 AM



Ticker: AAPL

Market cap: $2.027 trillion

Source: Morningstar

2. Texas Instruments Screen Shot 2020 11 23 at 12.15.30 PM



Ticker: TXN

Market cap: $143.80 billion

Source: Morningstar

3. CSX Screen Shot 2020 11 23 at 12.16.56 PM



Ticker: CSX

Market cap: $69.29 billion

Source: Morningstar

4. Sherwin-Williams Screen Shot 2020 11 23 at 12.17.54 PM



Ticker: SHW

Market cap: $65.96 billion

Source: Morningstar

5. Intercontinental Exchange Screen Shot 2020 11 23 at 12.19.02 PM



Ticker: ICE

Market cap: $55.76 billion

Source: Morningstar

6. Barrick Gold Screen Shot 2020 11 23 at 12.20.49 PM



Ticker: GOLD

Market cap: $46.02 billion

Source: Morningstar

7. Franco-Nevada Screen Shot 2020 11 23 at 12.22.05 PM



Ticker: FNV

Market cap: $25.98 million

Source: Morningstar

8. Wheaton Precious Metals Screen Shot 2020 11 23 at 12.23.39 PM



Ticker: WPM

Market cap: $20.41 billion

Source: Morningstar

9. Vulcan Materials Screen Shot 2020 11 23 at 12.24.56 PM



Ticker: VMC

Market cap: $18.28

Source: Morningstar

10. Eurofins Scientific Screen Shot 2020 11 23 at 12.28.42 PM



Ticker: ERF

Market cap: $13.58 billion

Source: Morningstar

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