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The world's biggest investors have piled into these 14 stocks. RBC says you should buy them now for big gains down the road.

Feb 2, 2020, 19:41 IST
Spencer Platt/Getty Images
  • Lori Calvasina, head of US equity strategy at RBC Capital Markets, has identified the stocks most commonly added to long-only funds in the third quarter. She says they're likely to outperform down the line.
  • She calls them "Rising Suns," and has ranked the 14 most popular, based on the number of funds that added them to their respective portfolios.
  • Stocks like these don't enjoy a rocket ride to success, but she says the group outperforms over the longer term.
  • Visit Business Insider's homepage for more stories.

Good things come to those who wait. But you still have to wait for the right thing.

Lori Calvasina, head of US equity strategy for RBC Capital Markets, says she's found a group of stocks that's worth the wait. She's tracked the buying patterns of long-only large-cap funds. She did that by monitoring the activity of 751 funds and identifying the stocks that were added to the biggest number of portfolios.

She dubs those most popular stocks the "Rising Suns," as their addition to those portfolios is an indicator they'll outperform the market later on. But it sometimes takes a while.

"The Rising Suns tend to see choppy performance trends after being bought, lagging initially and then eventually showing leadership again down the road," she wrote in a note to clients.

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The chart below shows the historic performance of stocks selected this way, and it shows they outperform the S&P 500 after about two years.

RBC Capital MarketsLori Calvasina of RBC says stocks that get popular with long-only funds struggle for a time, then outperform.

The data shows some clear patterns, as Calvasina says most of the top stocks come from the industrial, technology, and real estate sectors.

Listed below are her top 14 stocks are ranked in ascending order, based on how many of the 751 funds she screened added them to their holdings during the third quarter of 2019.

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