In this piece, we will take a look at the 12 Dow stocks that billionaires really don't like. If you want to skip our overview of the stock market and the Dow, then you can skip ahead to 5 Dow Stocks Billionaires Like The Least.
Even though 2023 is ready to race away into the past, one parting gift that it's given investors is uncertainty. The year has been full of ups and downs for the stock market, and throughout these past 12 months, investors have watched their investments go up and come down as they scuttle to adjust portfolios on the slightest of whims. 2023 started out by greeting a market that was wary of the Federal Reserve and its interest rate hikes. The Fed, for its part, had entered 2023 by raising rates multiple times by 75 basis points each, and investors, analysts, and economists were worried about the impact of these rates on the economy and particularly high growth technology sectors.
While the stock market itself is an economic barometer, indexes such as the NASDAQ Composite and the S&P 500 often see their performance varies by sector. For instance, last year as technology and growth companies such as Meta Platforms, Inc. (NASDAQ:META) and Tesla, Inc. (NASDAQ:TSLA) were decimated due to high rates and inflation denting their markets, others such as Exxon Mobil Corporation (NYSE:XOM) and Chevron Corporation (NYSE:CVX) soared on the back of record high oil prices.
One index that is a better representation of the American economy is the Dow Jones Industrial Average (DJIA). One of the oldest stock indexes in the world, the Dow has seen all phases of the stock market's history - from the Great Depression of the 1930s to the Great Recession in 2008. Throughout its life, it has seen numerous companies come and go, and since technology is the biggest sector of the American economy now, several technology companies are now present on the Dow. Being a member allows a firm to take the prestigious title of a blue chip stock, and right now, the Dow is made of 30 companies with the latest changes having taken place in 2020 when Salesforce, Inc. (NYSE:CRM), Honeywell International Inc. (NASDAQ:HON), and Amgen Inc. (NASDAQ:AMGN) made the cut and Pfizer Inc. (NYSE:PFE), Exxon, and RTX Corporation (NYSE:RTX) were given the boot.
Since the Dow is more diversified, its performance doesn't often see breakneck returns like other indexes such as the tech heavy NASDAQ 100. The index's constituents range from financial services to information technology, petroleum exploration, healthcare, retail, construction, semiconductors, and entertainment. So for instance, if semiconductors continue to rise on the back of strong A.I. spending but construction contracts should rates remain high, then the Dow's performance will reflect both these fluctuations. As a consequence, the Dow is up by a modest 9.12% year to date, while other widely known indexes such as the S&P 500 and the NASDAQ Composite have gained 19.8% and 37.98%, respectively.
So, the Dow isn't known for blockbuster returns. This should make one wonder why is it so popular among investors and the media? Well, the answer to this question lies in two words: stability and diversification. Should one simply choose to invest in the index, then while the portfolio won't generate high returns, it would nevertheless prove to be a great buffer during economic turmoil. As an example of this principle, consider that between December 2007 and June 2009, the S&P 500 lost roughly 40% - a disaster that shook the world. However, the DJIA pared off slightly better, as it prevented some of the losses to be down by roughly 35%. Since March 2009, the Dow is up by 396% while the S&P has returned 461%.
But what about stocks? We took a look at the best performing Dow stocks in 2023 as of November 17th 2023, and found that the three highest performers in the index were Salesforce, Inc. (NYSE:CRM), Intel Corporation (NASDAQ:INTC), and Microsoft Corporation (NASDAQ:MSFT). Overall, the top five performing Dow stocks were also technology companies, cementing technology's role as the market's savior in 2023.
Looking at this, it's important to know where the smart money is heading when it comes to Dow and blue chip stocks. We took a look today, and found that the three most unfavorable billionaire Dow stock picks are Walgreens Boots Alliance, Inc. (NASDAQ:WBA), Dow Inc. (NYSE:DOW), and Verizon Communications Inc. (NYSE:VZ).
12 Dow Stocks Billionaires Like The Least
Our Methodology
To make our list of the Dow stocks that billionaires like the least, we took a look at Q3 2023 hedge fund filings and made a list of those who had invested in Dow stocks. Out of these, those with the least number of billionaire investors were chosen.
The Home Depot, Inc. (NYSE:HD) is an American home improvement retailer headquartered in Atlanta, Georgia. The firm's well known, and sometimes controversial, billionaire co founder Ken Langone was out with some investing advice in December 2023 when he told young people to never bet against America, always think about the long term, and use dips as a buy point instead of a sell point.
During this year's third quarter, 76 out of the 910 hedge funds profiled by Insider Monkey had bought and owned The Home Depot, Inc. (NYSE:HD)'s shares. Ken Fisher's Fisher Asset Management was the biggest shareholder as it owned 8.6 million shares that are worth $2.6 billion.
Along with Dow Inc. (NYSE:DOW), Verizon Communications Inc. (NYSE:VZ), and Walgreens Boots Alliance, Inc. (NASDAQ:WBA), The Home Depot, Inc. (NYSE:HD) is a Dow stock that billionaires don't like that much.
Honeywell International Inc. (NASDAQ:HON) is one of the largest industrial technology and products companies in the world. The firm made a big splash as December 2023's second week started, as it confirmed a $5 billion acquisition of a security system and smart lock manufacturer for its biggest deal this decade.
Insider Monkey's third quarter of 2023 survey covering 910 hedge funds revealed that 60 had invested in the company. Honeywell International Inc. (NASDAQ:HON)'s largest hedge fund shareholder is Phill Gross and Robert Atchinson's Adage Capital Management as it owns 1.8 million shares that are worth $346 million.
3M Company (NYSE:MMM) is another industrial conglomerate. The firm is headquartered in St. Paul, Minnesota and its shares scored a win in December 2023 when Barclays upgraded their rating to Equal Weight from Underweight and boosted the share price target to $107 from $98 on the back of strong electronics demand.
For their September quarter of 2023 investments, 54 out of the 910 hedge funds polled by Insider Monkey had held a stake in 3M Company (NYSE:MMM). Out of these, the biggest investor was Ken Griffin's Citadel Investment Group since it owned $146 million worth of shares.
American Express Company (NYSE:AXP) is an iconic American travel and financial services provider. These days, the firm is making the news on rumors of its potential partnership for Apple Inc. (NASDAQ:AAPL) for the Apple Card, after Apple's partnership with The Goldman Sachs Group, Inc. (NYSE:GS) has soured.
By the end of this year's third quarter, 74 out of the 910 hedge funds covered by Insider Monkey's research were the firm's investors. American Express Company (NYSE:AXP)'s largest shareholder is Warren Buffett's Berkshire Hathaway courtesy of its $22.6 billion stake.
Caterpillar Inc. (NYSE:CAT) is a well-known global brand for agricultural and construction heavy machinery. The firm is busy beefing up its sustainability platform right now, as it announced an investment into a company that focuses on reusing materials for making batteries in December 2023.
Insider Monkey scoured through 910 hedge funds for their shareholdings during 2023's September quarter and discovered 50 Caterpillar Inc. (NYSE:CAT) shareholders. Ken Fisher's Fisher Asset Management was the biggest investor through its $2.1 billion investment.
The Goldman Sachs Group, Inc. (NYSE:GS) is one of the world's largest investment banks. With 2023 ending, the firm is busy ending its much hyped expansion into the retail space after massive losses and write-downs that also include a bad business deal with Apple for the Apple Card.
During September 2023, 68 out of the 910 hedge funds surveyed by Insider Monkey were the bank's investors. The Goldman Sachs Group, Inc. (NYSE:GS)'s largest hedge fund shareholder is Ken Fisher's Fisher Asset Management as it owns 5.3 million shares that are worth $1.7 billion.
6. International Business Machines Corporation (NYSE:IBM)
Number of Billionaire Investors In Q3 2023: 14
International Business Machines Corporation (NYSE:IBM) is one of the world's leading enterprise computing and semiconductor research firms. Amidst the current hype surrounding A.I., the firm announced in December 2023 that it is part of an open source A.I. alliance with other big names such as Meta.
53 out of the 910 hedge funds part of Insider Monkey's Q3 2023 database had invested in International Business Machines Corporation (NYSE:IBM). Peter Rathjens, Bruce Clarke, and John Campbell's Arrowstreet Capital was the biggest investor through its $312 million stake.
Walgreens Boots Alliance, Inc. (NASDAQ:WBA), International Business Machines Corporation (NYSE:IBM), Dow Inc. (NYSE:DOW), International Business Machines Corporation (NYSE:IBM), and Verizon Communications Inc. (NYSE:VZ) are some least liked Dow stocks among billionaires.
