Billionaires and top money managers in 2023 piled into cash or safe, mega-cap tech stocks (Magnificent Seven, for example) to ride the AI wave and avoid risky asset classes. But in 2024 market pundits believe top money managers could take a different direction given the expectations of rate cuts and a decline in inflation. Earlier this month Bloomberg cited data which shows there's a "consensus" among investors that smaller and more diverse companies have "twice the return potential of the broader Nasdaq 100 index, according to data compiled by Bloomberg."
The Bloomberg report also quoted James Demmert, founder and chief investment officer at Main Street Research, who thinks not investing in the Mag. 7 group of stocks last year meant you missed out on most of the stock market gains. But in 2024, Demmert believes, things would be different. The report also quoted experts who said a soft landing and rate cuts would benefit smaller companies from a diverse range of sectors more while the effect of these developments on mega-cap tech stocks would not be huge.
In this environment it would make sense to see which stocks billionaires were piling into for 2024. For this article we scanned Insider Monkey's proprietary database of billionaires' stock holdings and picked 15 stocks with the highest number of billionaire investors. All of these billionaires are founders or managers of some of the top hedge funds in the world. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).
General Electric Co (NYSE:GE) is one of the best stocks to buy according to billionaires. Insider Monkey's proprietary database of billionaires shows that 21 billionaires had stakes in General Electric Co (NYSE:GE) as of the end of the September quarter. Some notable billionaires with stakes in General Electric Co (NYSE:GE) include Andreas Halvorsen and Nelson Peltz.
Number of Billionaire Investors: 21
UnitedHealth Group Inc (NYSE:UNH) ranks 14th in our list of the best stocks to buy according to billionaires. As of the end of the third quarter of 2023, 21 billionaires had stakes in UnitedHealth Group Inc (NYSE:UNH). Among the biggest stakeholders of UnitedHealth Group Inc (NYSE:UNH) include Ken Fisher, Andreas Halvorsen, D. E. Shaw and Philippe Laffont.
Wedgewood Partners stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its fourth quarter 2023 investor letter:
“UnitedHealth Group Incorporated (NYSE:UNH) contributed less to portfolio performance than the majority of our holdings during the quarter. The Company reported double-digit revenue, operating earnings and earnings per share growth during their third quarter. The Company has been able to adjust pricing in its health care segment to keep up with medical cost inflation while working with its Optum units to deliver more value-based care that replaces the traditional fee for service health care model. Value-based care is a sensible, long-term growth opportunity for the Company to pursue and also differentiates it from the vast majority of healthcare providers, particularly as it relates to Medicare patients. For example, the Company’s value-based care programs provide more preventative care opportunities and home-based care visits for patients which helps save the U.S. healthcare system billions in unnecessary spending while also providing patients with better outcomes, as diseases and behaviors are caught or corrected at earlier stages. The Company has invested in several core assets over many years to execute this value-based strategy and it will become the standard of care as the proportion of people in the U.S. with healthcare insurance coverage continues to reach new highs.”
Number of Billionaire Investors: 21
Intuitive Surgical Inc (NASDAQ:ISRG) makes robotics products for the healthcare industry.
A total of 21 billionaires had stakes in Intuitive Surgical Inc (NASDAQ:ISRG) as of the end of the third quarter of 2023.
Baron Health Care Fund stated the following regarding Intuitive Surgical, Inc. (NASDAQ:ISRG) in its fourth quarter 2023 investor letter:
“Additional tailwinds to performance came from robotic surgical system pioneer Intuitive Surgical, Inc. (NASDAQ:ISRG). We believe Intuitive Surgical will continue to innovate and launch new products that enhance surgical outcomes, and we think the company has a long runway for growth.
Number of Billionaire Investors: 22
Despite the troubles and growth concerns, billionaires remain bullish on Alibaba Group Holding Ltd - ADR (NYSE:BABA) for the long term. Insider Monkey's database of billionaires shows that 22 billionaires had stakes in the Chinese ecommerce retailer. The net worth of these stakes was $1.64 billion. Some famous billionaire hedge fund managers with stakes in Alibaba Group Holding Ltd - ADR (NYSE:BABA) include Ken Fisher, Lei Zhang and Chase Coleman.
Alibaba Group Holding Ltd - ADR (NYSE:BABA) recently announced that during the one-year period ending December 31, 2023, it bought 897.9 million shares of Alibaba Group Holding Ltd - ADR (NYSE:BABA) worth $9.5 billion.
Latest reports suggest that Alibaba Group Holding Ltd - ADR (NYSE:BABA) founder Jack Ma bought $50 million of Hong Kong-listed shares of Alibaba during the fourth quarter. The stock jumped after the reports.
L1 Long Short Fund made the following comment about Alibaba Group Holding Limited (NYSE:BABA) in its second quarter 2023 investor letter:
“Alibaba Group Holding Limited (NYSE:BABA) (Long -18%) shares weakened in recent months as Chinese reopening strength faded and macro-economic datapoints began sequentially declining. Nevertheless, we believe the Chinese government will use consumption as a key lever to reinvigorate the economy post-COVID lockdowns. Alibaba remains a high-quality business with leading positions in both eCommerce and Public Cloud, and management is taking proactive steps to unlock shareholder value. It has announced plans to split into six major business groups – Cloud Intelligence, Taobao Tmall, Local Services, Global Digital, Cainiao Smart Logistics and Digital Media, and Entertainment Group. Each group will be managed independently, with a separate CEO and board, have the flexibility to raise external capital and potentially pursue separate IPOs. We believe this restructure will be a strong positive catalyst to unlock the sum-of-the-parts valuation upside in the company.”
Number of Billionaire Investors: 23
With a significant interest from billionaire investors, Visa Inc (NYSE:V) ranks 11th in our list of the best stocks to buy according to billionaires. As of the end of the third quarter of 2023, 23 billionaires had stakes in Visa Inc (NYSE:V).
Visa Inc (NYSE:V) recently posted fiscal first quarter results. EPS in the period came in at $2.41, beating estimates by $0.07. Revenue in the quarter jumped 8.9% year over year to $8.6 billion, beating estimates by $50 million.
In its October 2023 investor letter, Lakehouse Capital stated the following regarding Visa Inc. (NYSE:V):
“Visa Inc. (NYSE:V) reported a strong result with net revenue increasing 11% year-on-year to $8.6 billion and non-GAAP earnings per share increasing by 21% to $2.33. As has been the case for many years now, the scalable nature of the business allows for revenue growth to outpace its costs, which places the company in a good position to navigate through this inflationary period. The network continues to grow, with credentials and merchant locations up 7% and 17%, respectively. Cross-border travel-related spend also maintained its robust growth, increasing 26% year-on-year while Visa Direct reported 7.5 billion transactions, up 19% yearon-year, progressing on penetrating categories such as cross-border remittances. Altogether, we’re pleased with how the business is tracking and remain positive on Visa’s outlook.”
Number of Billionaire Investors: 23
Earlier in January, Baird said that Salesforce Inc (NYSE:CRM) has as an "attractive" risk-reward profile since the firm expects front office spending will be better than expected.
"We underestimated the company's ability to deliver margins, which drove the strong stock performance last year," Baird's Rob Oliver said.
Salesforce Inc (NYSE:CRM) also made it to the list of top tech enablement stocks that are poised to grow in the next five years recommended by UBS.
As of the end of the third quarter of 2023, 23 billionaire investors had stakes in Salesforce Inc (NYSE:CRM). The total worth of these stakes was $6.2 billion.
Polen Focus Growth Strategy stated the following regarding Salesforce, Inc. (NYSE:CRM) in its fourth quarter 2023 investor letter:
“In the fourth quarter, the top relative and absolute contributors to the Portfolio’s performance were Netflix, ServiceNow, and Salesforce, Inc. (NYSE:CRM).
Number of Billionaire Investors: 23
BofA recently maintained a Buy rating on Mastercard Inc (NYSE:MA) along with a few other fintech names. BofA said Mastercard Inc (NYSE:MA) and Visa Inc (NYSE:V) have strong competitive moats, longer-duration secular tailwinds, and higher P&L growth rates.
Insider Monkey's proprietary database of billionaires shows that 23 billionaires had stakes in Mastercard Inc (NYSE:MA). Among the most notable billionaires with stakes in Mastercard Inc (NYSE:MA) are Ken Fisher, Warren Buffett and Ken Griffin.
Ensemble Capital Management stated the following regarding Mastercard Incorporated (NYSE:MA) in its fourth quarter 2023 investor letter:
“Mastercard Incorporated (NYSE:MA) (7.21% weight in the Fund): Payment companies are data companies. As we discussed last quarter in our write up of Mastercard, merchants can generate significant value from analyzing payment data to better understand their customers. Mastercard has long built AI-based products to enhance payment security and provide merchants with rich data analytics. In December, they rolled out Muse, a new online shopping companion that merchants who utilize certain Mastercard services can install on their own websites.
Number of Billionaire Investors: 23
Thermo Fisher Scientific Inc (NYSE:TMO) ranks eighth in our list of the best stocks to buy according to billionaires as 23 billionaires in Insider Monkey's database had stakes in Thermo Fisher Scientific Inc (NYSE:TMO). Among the notable billionaires with stakes in Thermo Fisher Scientific Inc (NYSE:TMO) are Ken Fisher, Andreas Halvorsen, Israel Englander, Ken Griffin and DE Shaw.
Barclays earlier this month downgraded Thermo Fisher Scientific Inc (NYSE:TMO) stock to Equal Weight from Overweight.
Number of Billionaire Investors: 23
Uber Technologies Inc (NYSE:UBER) is one of the best stocks to buy according to billionaires, as per Insider Monkey's proprietary database of billionaires and their stock holdings.
Gordon Haskett recently downgraded the stock to Neutral from Buy. Gordon Haskett analyst Robert Mollins said Uber Technologies Inc's (NYSE:UBER) leadership in the ride-haling industry is already priced in and its ambitious EBITDA targets will not receive a lot of enthusiasm from investors.
A total of 23 billionaires had positions in the ride hailing company Uber Technologies Inc (NYSE:UBER) entering the fourth quarter of 2023. The total worth of these stakes was about $3 billion.
RiverPark Advisors made the following comment about Uber Technologies, Inc. (NYSE:UBER) in its Q3 2023 investor letter:
“Uber Technologies, Inc. (NYSE:UBER): UBER was the top contributor in the quarter following a better-than-expected 2Q23 earnings report and 3Q23 guidance. Gross bookings of $33.6 billion were up 16% year over year. Mobility gross bookings of $17 billion grew 25% over last year driven by a combination of product innovation and driver availability. Delivery gross bookings of $16 billion were up 12% from last year. 2Q Adjusted EBITDA of $916 million, up $552 million year over year, significantly beat Street estimates of $845 million and the company generated $1.1 billion of free cash flow. Management guided to continuing growth in 3Q Gross Bookings (17%-20% growth) and Adjusted EBITDA (of $975-1,025 million).
Number of Billionaire Investors: 25
Danaher Corporation (NYSE:DHR) shares took a beating recently as the company slashed its dividend in December and also gave weak Q4 guidance. However, during the third quarter, Danaher Corporation's (NYSE:DHR) adjusted EPS came in at $2.02, beating estimates by $0.14. Revenue fell 9.9% year over year to $6.9 billion, surpassing estimates by $250 million.
Insider Monkey's database of billionaires shows that 25 billionaires had stakes in Danaher Corporation (NYSE:DHR).
Headwaters Capital Management stated the following regarding Danaher Corporation (NYSE:DHR) in its fourth quarter 2023 investor letter:
“Danaher Corporation’s (NYSE:DHR) acquisition offer for ABCM was approved by shareholders on 11/6/23. Shareholders approved the deal based on trough fundamentals (potential China weakness) and trough valuation (the broader market bottomed on 10/27). DHR took advantage of broader market fears and mis-aligned management incentives to acquire Abcam at a cheap price. While disappointing, ABCM was still a very successful investment for Headwaters as it outperformed the market by +27% during our ownership. The cash received from the acquisition was immediately re-deployed into the newest addition to the portfolio, IPAR (discussed below).”
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Disclosure. None. 15 Best Stocks To Buy According to Billionaires was initially published on Insider Monkey.
