In this article, we will take a look at the 10 Defensive Stocks Billionaire Ken Fisher is Betting On.
Ken Fisher, an American billionaire investor, author, and financial analyst, founded and runs Fisher Asset Management. He is a world-renowned investment manager recognized for his contrarian approach and strong belief in capitalism. With an estimated net worth of more than $11.2 billion, he ranks among the world’s wealthiest billionaires. The son of famed investor Philip Fisher, also known as the “Father of Growth Investing”, he coupled his father’s growth philosophy with a data-driven value mindset. Long before he became a popular name in the financial industry, Fisher made waves in the 1980s with a revolutionary idea: utilizing the Price/Sales ratio as a major tool for spotting bargain firms. Fisher noted that earnings are frequently erratic, particularly over short periods. Companies may report lower earnings on account of temporary issues such as R&D spending or accounting adjustments. Sales, on the other hand, are more steady and offer a better understanding of a company’s business strength.
Anyone that follows Fisher knows that he is one of the market’s most outspoken pundits. He thinks that, while political developments might elicit strong emotions, they rarely affect the market’s long-term direction. According to Fisher, bull markets often end as a result of either unrestrained investor enthusiasm or an unforeseen economic shock with global implications.
Interestingly, his views on several subjects, notably tariffs, appear to have evolved. Fisher has previously downplayed the potential impact of President Trump’s tariffs, stating that they may not be fully enforced or be in place for as long as anticipated. He also stressed that businesses are highly adaptable to changing economic policies, which he felt may help reduce long-term harm. However, in a recent post on X, the billionaire criticized the government’s plan to impose wide tariff measures:
“What Trump unveiled Wednesday is stupid, wrong, arrogantly extreme, ignorant trade-wise and addressing a non-problem with misguided tools. Yet, as near as I can tell it will fade and fail and the fear is bigger than the problem, which from here is bullish.”
Europe to Lead the Market
Over the last two years, the United States has dominated global markets, propelled by large growth stocks in the technology and technology-related communication services sectors, which accounted for more than 40% of US market capitalization, significantly exceeding the rest of the world’s 11%. These firms have greatly increased US returns, but Europe, where such equities account for less than 10% of total market capitalization, missed this edge. Europe’s rising stock presence is primarily restricted to luxury products, which struggled in 2024 as Asian buyers cut spending. As a result, Europe underperformed significantly during the two-year period, returning only 24.1% compared to the US’s 60.3%. Now, however, Europe is taking the lead, and its leading sectors—primarily value stocks linked to economic cycles rather than long-term trends—are primed to benefit, a sentiment that Ken Fisher echoes himself:
“This should be the first year in quite some years where value beats growth. And as that happens, the US lags the non-US world, and particularly Europe, which is so heavily value laden. So that’s been my core forecast. That will remain my core forecast until I see some big change or something different that should make me change my mind. But I babble on these videos pretty much every month, so you can hear that if it ever happens this year. Otherwise, that’s my view. I think it’ll be another big year in the market with global 20% kind of returns.”
“I don’t really know for the S&P 500, but stronger overseas, which is the part that you don’t really get to feel as an American. This year, the S&P doesn’t feel strong. It’s up, as I speak, but it doesn’t feel strong, and particularly not as NASDAQ and Tech stocks are lagging the S&P. But look overseas and see how much stronger it is there because that’s where the market is.”
Ken Fisher of Fisher Asset Management
Our Methodology
For this article, we picked defensive companies from Fisher Asset Management’s 13F portfolio as of the end of the fourth quarter of 2024. The following firms have low beta values (<1), consistent dividend histories, and robust businesses. Additionally, we have mentioned the hedge fund sentiment around each stock, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. Colgate-Palmolive Company (NYSE:CL)
Beta Value: 0.37
Dividend Yield: 2.27%
Fisher Asset Management’s Q4 Stake: $6.6 million
Number of Hedge Fund Holders: 62
Colgate-Palmolive Company (NYSE:CL) is a multinational company that manufactures, distributes, and offers a wide range of household, healthcare, personal care, and veterinary products.
On February 3, TD Cowen reiterated its Buy rating and $100 price target on Colgate-Palmolive Company (NYSE:CL). The firm’s adjustment follows the company’s fourth-quarter gross margin increase, which was 70 basis points (bps) lower than the 290 bps expansion witnessed in the prior three quarters. To begin countering this FX impact, Colgate-Palmolive implemented price changes in Latin America and Africa during the first quarter. The company expects gross margin increase in fiscal year 2025 to be driven by revenue growth management and efficiency improvements.
Over the past year, the company generated $20.1 billion in revenue and reported earnings per share of $0.91. However, organic sales growth of 4.3% fell short of the expected ~6%, indicating a downturn in the first half 2025. In contrast, the company’s Hill’s pet nutrition brand had a 25% increase in the fourth quarter of 2024.
Diamond Hill Large Cap Strategy stated the following regarding Colgate-Palmolive Company (NYSE:CL) in its Q4 2024 investor letter:
“As valuations have continued rising and the economic cycle has gotten relatively long in the tooth, we’ve thought carefully about where and how we are exposed to more cyclical stocks. As such, we initiated just two new positions in Q4: Colgate-Palmolive Company (NYSE:CL) and the aforementioned lululemon.
Colgate-Palmolive is a high-quality business with leading positions in oral care, home products and pet nutrition. Historically, the company has allocated capital well, and it produces significant free cash flows. Shares were pressured in Q4 primarily, we believe, in sympathy with near-term macroeconomic concerns rather than any fundamental issues at the business. We consequently capitalized on the underperformance and compelling valuation to start a position.”
9. The Coca-Cola Company (NYSE:KO)
Beta Value: 0.46
Dividend Yield: 2.92%
Fisher Asset Management’s Q4 Stake: $412.13 million
Number of Hedge Fund Holders: 81
The Coca-Cola Company (NYSE:KO) is a multinational beverage company that produces, develops, and sells a broad variety of nonalcoholic beverages. Coca-Cola’s brands include Fanta, Fresca, Schweppes, Sprite, and others.
In Q4 2024, the company’s revenues reached $11.5 billion, up 6.5% over the previous year. Organic revenue grew by 14%, owing to a 9% rise in price/mix and a 5% increase in concentrate sales. Moreover, The Coca-Cola Company (NYSE:KO) achieved solid cash flow, with $2.9 billion in operations and $1.6 billion in free cash flow. The company also recorded a strong adjusted operating margin of 30.7%.
Piper Sandler recently boosted KO’s price target to $80, citing projections of 5-6% organic sales growth in 2025 and keeping an Overweight rating on the company. Similarly, Erste Group raised The Coca-Cola Company’s stock rating from Hold to Buy, noting solid profitability and ambitious growth prospects.
