In this article, we examined the 10 best stocks to buy according to billionaire Ken Fisher. You can skip our comprehensive discussion about Ken Fisher’s investment strategy, and market outlook and go directly to the 5 Best Stocks to Buy According to Billionaire Ken Fisher.
Billionaire Ken Fisher, who is executive chairman and co-chief investment officer of Fisher Asset Investments, remained confident about his strategy of holding large positions in growth stocks despite the fact the value stocks performed better than growth stocks at the beginning of this year. During the second quarter, however, growth stocks have outshined value stocks, with growth-heavy sectors gaining a lot of momentum. Growth stocks jumped close to 11% in the second quarter and outperformed the value stocks gains of 4.7%. Tech stocks were among the best performers with an 11.5% gain, while the communication services sector soared 9.2%.
Fisher Asset Management, which believes that the market is at the late-cycle of bull run and favors investing in large and high-quality companies, held large investments in high-quality growth companies like Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM), Alibaba Group Holding Limited (NYSE: BABA), salesforce.com, Inc. (NYSE: CRM), PayPal Holdings, Inc. (NASDAQ: PYPL) and Adobe Inc. (NASDAQ: ADBE). What’s more, growth stocks like Apple Inc. (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), and Amazon.com, Inc. (NASDAQ: AMZN) are among Fisher’s top three largest stock holdings, according to the second-quarter filings.
At the end of the second quarter, the information technology sector accounted for 26% of the $159 billion worth of Fisher Asset Management’s 13F portfolio. Communication and consumer discretionary stocks represented 13% and 10% of the overall portfolio. Excluding Visa Inc. (NYSE: V), which is ranked fourth in the list of top ten stocks to buy, the rest of the stocks belongs to information technology, communications, and consumer discretionary sectors. What’s more, the top ten stocks represent more than 31% of the entire Fisher Asset Management portfolio.
Ken Fisher, who repeatedly suggested to investors through his columns and YouTube videos that it’s not the time to chase value stocks and hinted that growth stocks will once again outclass value stocks in 2021, now claims that equities will perform well during the second half of the year before entering into a new cycle. As he believes that growth stocks will perform better than value stocks this year, he added significantly to his growth stocks positions. Besides Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM), he added to his positions in Alibaba Group Holding Limited (NYSE: BABA), salesforce.com, Inc. (NYSE: CRM), PayPal Holdings, Inc. (NASDAQ: PYPL), and Adobe Inc. (NASDAQ: ADBE).
In addition to holding a large stake in the fastest-growing companies, Fisher Asset Management also seeks to initiate positions in mid and small-cap stocks that have strong fundamentals. During the second quarter, the firm initiated a position in 86 stocks and added to 376 existing positions. On the other hand, his hedge fund slashed the stake in 76 stocks and closed out 417 positions. Besides tech and communication stocks, Fisher Asset Management held stakes in energy, healthcare, industrials, finance, and materials sectors.
Fisher, who once worked to earn $1.20 an hour for picking fruit, sawing, and fertilizing in his native San Mateo County, California, is now sitting on a net worth of $6.5 billion. He is the author of 11 books, 6 of which are national bestsellers.
Ken Fisher of Fisher Asset Management
While Ken Fisher’s reputation remains intact, the same can’t be said of the hedge fund industry as a whole, as its reputation has been tarnished in the last decade during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Let’s start digging into the 10 best stocks to buy according to billionaire Ken Fisher based on the billionaire’s Q2 portfolio.
Best Stocks to Buy According to Billionaire Ken Fisher
10. Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM)
Number of Hedge Fund Holders: 64
Fisher Asset Management has been holding a long position in Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM) since the beginning of this century. At the end of the second quarter, the firm held 25.9 million shares of Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM) valued at around $3.1 billion. Following a strong rally in the pandemic year, shares of the chipmaker remained under pressure this year. However, a strong dividend yield of 1.9% makes Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM) a good stock to hold.
Like Alibaba Group Holding Limited (NYSE: BABA) and PayPal Holdings, Inc. (NASDAQ: PYPL), Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM) is one of the best stocks in Ken Fisher’s portfolio.
In the second quarter investor letter, Wedgewood Partners, an investment management firm, highlighted a few stocks including Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM). Here is what Wedgewood Partners stated about the future growth prospects of TSM:
“Over the next several years, we expect Taiwan Semi to generate percentages of compounded revenue growth in the mid-teens along with higher margins and returns, driven by their scarce capacity in leading-edge logic manufacturing. Though the stock trades at a slight premium to the market, we think it is much more reasonable compared to where it traded earlier this year. In fact, the stock briefly went through a bear market earlier this year – after which we began purchasing shares. As the market might periodically serve up shares due to cycle-ending fears, we will look to add to our holding as the Company should be able to sustain superior growth and returns longer than previous cycles.”
9. Alibaba Group Holding Limited (NYSE: BABA)
Number of Hedge Fund Holders: 146
Billionaire Ken Fisher is also bullish over the future fundamentals of the largest Chinese e-commerce company Alibaba Group Holding Limited (NYSE: BABA). In the second quarter, his firm raised its position in Alibaba Group Holding Limited (NYSE: BABA) by 1% to 14.1 million shares, accounting for just over 2% of the overall portfolio and ranked at 9th spot in the list of 10 best stocks to buy according to billionaire Ken Fisher. Shares of Alibaba Group Holding Limited (NYSE: BABA) have been struggling to generate upside momentum since the beginning of this year amid regulatory issues.
In the second quarter investor letter, Tweedy, Browne Company LLC, an investment management firm, commented on a few stocks including Alibaba Group Holding Limited (NYSE: BABA). Here is what Tweedy, Browne Company stated about Alibaba Group Holding Limited (NYSE: BABA):
“A position that we established around year-end, and have added to across three of our Funds during the quarter, is Alibaba, the Chinese internet giant. Our pricing opportunity in these shares is in part related to increased regulatory scrutiny of the internet sector by the Chinese government which we continue to monitor closely.
Alibaba is the largest e-commerce company in China, with over 50% market share in terms of gross merchandise value. We first purchased Alibaba for the Funds around the calendar year-end. Its core consumer marketplace businesses consist of Taobao (China’s largest consumer-to-consumer online shopping destination) and Tmall (China’s largest third-party platform for brands and retailers). Additionally, Alibaba operates the dominant cloud platform in China (AliCloud), international e-commerce operations (Lazada, etc.), and digital media services, and has several strategic investments, including a 33% stake in Ant Financial.”
8. salesforce.com, Inc. (NYSE: CRM)
Number of Hedge Fund Holders: 108
In the second quarter, Fisher Asset Management lifted its position in Salesforce.com, Inc. (NYSE: CRM) by 3% to 13.4 million shares worth around $3.27 billion. Salesforce.com, Inc. (NYSE: CRM) stock price surged 14% in the past three months, outperforming S&P 500 gains of around 6.8%. Along with new product launches, the strategy of acquiring Slack Technologies helped in enhancing investor sentiment in Salesforce.com, Inc. (NYSE: CRM) stock during the second quarter.
Like Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM), Alibaba Group Holding Limited (NYSE: BABA) and PayPal Holdings, Inc. (NASDAQ: PYPL), Salesforce.com, Inc. (NYSE: CRM) is one of the best stocks in Ken Fisher’s portfolio.
Salesforce.com, Inc. (NYSE: CRM) investors should pay attention to an increase in support from the world’s most elite money managers recently. Salesforce.com, Inc. (NYSE: CRM) was in 108 hedge funds’ portfolios at the end of the second quarter of 2021 compared to 91 positions in the previous quarter. Our calculations also showed that CRM ranked #17 among the 30 most popular stocks among hedge funds.
7. PayPal Holdings, Inc. (NASDAQ: PYPL)
Number of Hedge Fund Holders: 143
Billionaire Ken Fisher also appears bullish over the performance of PayPal Holdings, Inc. (NYSE: PYPL) as his hedge fund raised its position in the payment transfer company by 4% to 11.57 million shares. Following a strong performance in 2020, PayPal Holdings, Inc. (NYSE: PYPL) stock price extended its upside momentum into 2021. Its shares are up 16.5% year to date. The company’s strategy of expanding its cryptocurrency services contributed strongly to its second-quarter performance. PayPal Holdings, Inc. (NYSE: PYPL), which accounts for 2.12% of the entire Fisher Asset Management portfolio, is ranked seventh in the list of 10 best stocks to buy according to billionaire Ken Fisher.
In the second quarter investor letter, Lakehouse Capital, an investment management firm, commented on a few stocks including PayPal Holdings, Inc. (NYSE: PYPL). Here is what Lakehouse Capital stated:
“PayPal Holdings, Inc. (NYSE: PYPL) had a tremendous year as it was a significant beneficiary in the pull-forward in ecommerce. Total payment volume increased by 50% year-on-year through the first quarter of 2021 thanks to significant growth in users and merchants. The company now has 392 million active users, up 20.6% from March 2020, who use PayPal an average of 42 times a year. The significant growth in users and activity both look structural to us, not cyclical, and we doubt the six-million-plus merchants who began accepting PayPal in the past year will suddenly stop accepting one of the internet’s most widely used forms of payment.
PayPal Holdings, Inc. (NYSE: PYPL) is a prime example of how a widely followed business can still be chronically misunderstood. FactSet tracks 48 analysts who publish price targets on the stock, suggesting PayPal’s shares should be efficiently priced, and yet PayPal has beaten analysts’ average sales and earnings estimates in 18 of the 21 quarters since it was spun off from eBay. We suspect the market tends to underestimate the business’ inherent operating leverage and that the lifetime values of incremental new users continue to rise over time thanks to improving functionality and a growing merchant base that allows new users to spend PayPal more widely than did their predecessors.
We continue to think that PayPal Holdings, Inc. (NYSE: PYPL) has a considerable growth runway not only from gaining share of a large, growing market via its core platform but also from new tools and functionality including an enhanced instore experience, crypto offerings, Pay with Venmo, and buy now, pay later. The business isn’t sitting still despite its strong position and we look forward to what the future holds.”
6. Adobe Inc. (NASDAQ: ADBE)
Number of Hedge Fund Holders: 89
Shares of Adobe Inc. (NASDAQ: ADBE) saw a robust rally of 31% in the last three months, thanks to its growth strategies, strong earnings, and price target upgrades from analysts. During the second quarter, Fisher Asset Management lifted its position in Adobe Ine. (NASDAQ: ADBE) by 3% to 6.2 million shares, accounting for 2.28% of the overall portfolio. The firm first initiated a position in Adobe Ine. (NASDAQ: ADBE) in 2018, which is currently ranked sixth in the list of 10 best stocks to buy according to billionaire Ken Fisher.
Like Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM), Alibaba Group Holding Limited (NYSE: BABA), Salesforce.com, Inc. (NYSE: CRM), and PayPal Holdings, Inc. (NASDAQ: PYPL), Adobe Ine. (NASDAQ: ADBE) is one of the best stocks in Ken Fisher’s portfolio.
Richie Capital Group, an investment management firm, highlighted a few stocks including Adobe in the second quarter investor letter. Here is what Richie Capital Group stated:
“Adobe Systems – In the last 15 years, Adobe has transformed itself into a software behemoth, more than tripling its revenue since 2010. The company is famous for its namesake PDF reader and photo-editing software Photoshop. However, ADBE sells a full suite of software products through a recurring subscription model. The company transitioned from selling boxed software to recurring subscriptions in 2013 and revenues have grown consistently since. The company achieved $13B in revenue in 2020 with 88% Gross Margins.”
To see the rest of the stocks on this list please click 5 Best Stocks to Buy According to Ken Fisher.
Suggested articles:
- 10 Stocks to Buy Today According to British Billionaire David Harding
- Cathie Wood is Doubling Down on These 10 Stocks
- Warren Buffett Is Selling These 10 Stocks
Disclosure: None. 10 Best Stocks to Buy According to Billionaire Ken Fisher is originally published on Insider Monkey.
