In this article we will take a look at the 10 stocks to buy and hold according to Bill Gates. You can skip our detailed analysis of Gates’ history, investment philosophy, and hedge fund performance, and go directly to 5 Stocks to Buy and Hold According to Bill Gates.
Co-founder of the leading tech giant Microsoft Corporation (NASDAQ:MSFT), Bill Gates has put forth billions of dollars into stocks to fund the Seattle-based Bill & Melinda Gates Foundation Trust which is well-known as the largest private foundation in the world, formed through the merging of William H. Gates Foundation and the Gates Learning Foundation. According to the organization, its mission is to overcome important humanitarian issues including poverty, lack of opportunity and infectious diseases. Warren Buffett, one of the worlds leading investors and CEO of Berkshire Hathaway Inc. (NYSE:BRK.A), made a lifetime pledge of $30 billion for the foundation’s operations.
Bill & Melinda Gates Foundation Trust, as an investment fund, manages more than $23.8 billion under the management of Michael Larson, who serves as the foundation’s chief investment officer. Bill & Melinda Gates Foundation’s portfolio is diversified across 8 key sectors, with the finance sector being the largest one, with Berkshire Hathaway Inc. (NYSE:BRK.A) making up 100% of the foundation’s finance sector allocation. A majority of the companies in the foundation’s portfolio are large-cap stocks. Stocks scaling up to more than $10 billion in market capitalization make up 57% of the foundation’s total value.
Some of the top stocks present in the investment portfolio of Bill & Melinda Gates Foundation at the end of the second quarter of 2021 include Berkshire Hathaway Inc. (NYSE:BRK.A), Alphabet Inc. (NASDAQ:GOOG), Coupang Inc. (NYSE:CPNG) and Walmart Inc. (NYSE:WMT), among others.
Our Methodology
With this background in mind, let us now look towards the 10 stocks to buy and hold according to Bill Gates. We made use of Bill & Melinda Gates Foundation’s 13F portfolio for the second quarter for this analysis. The list will consist of stocks that have experienced no change in their stake for the second quarter of 2021.
Why should we pay attention to Bill Gates’ stock picks? 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 86 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 86 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.
Stocks to Buy and Hold According to Bill Gates
10. Grupo Televisa, S.A.B (NYSE:TV)
Gates’ Stake Value: $241 million
Percentage of Bill & Melinda Gates’ 13F Portfolio: 1%
Number of Hedge Fund Holders: 17
Grupo Televisa, S.A.B (NYSE:TV) is a major Latin American mass media corporation based in Mexico City, Mexico, and is often presented as the largest producer of Spanish-language content. Ranked tenth on the list of the 10 stocks to buy and hold according to Bill Gates, Grupo Televisa, S.A.B (NYSE:TV) has a market capitalization of $6.82 billion.
Presently, Bill & Melinda Gates Foundation Trust holds 16.87 million shares of Grupo Televisa, S.A.B (NYSE:TV), amounting to $241 million in worth and accounting for 1% of the foundation’s portfolio. At the end of the second quarter of 2021, 17 hedge funds in the database of Insider Monkey held stakes worth $1.1 billion in Grupo Televisa, S.A.B. (NYSE: TV), up from 15 in the preceding quarter worth $752 million.
On July 5, Grupo Televisa, S.A.B (NYSE:TV) released its quarterly earnings for the second quarter of 2021, with reported earnings per share at $0.20, beating estimates by $0.16. In addition, the company reported revenues of $1.25 billion, beating forecast estimates by $15.12 million.
In the Q2 2021 investor letter of Oakmark Funds, the fund mentioned Grupo Televisa, S.A.B. (NYSE: TV), and discussed its stance on the firm. Here is what they said:
“Grupo Televisa, a media company headquartered in Mexico and the world’s largest producer of Spanish-language content, was a top contributor for the second quarter. Grupo Televisa’s share price jumped when the company revealed that it would merge its content and media assets with Univision. In a call with shareholders, CEO of Televisa, Alfonso de Angoitia, and CEO of Univision, Wade Davis, provided details on the $4.8 billion agreement, which combines these leading media businesses in the two largest Spanish-speaking markets in the world. Overall, we think the deal makes strategic sense as streaming is the future in television, and the new company will very likely become the dominant Spanish-language streaming service. There will also be synergies from combining the two businesses, which should improve profitability versus when they were stand-alone businesses. In addition, over the long term, we believe consolidation in the media sector will continue, providing an opportunity for the new entity to partner with a larger company. Aside from the strategic merits, we believe Televisa received an attractive valuation for its content business as the $4.8B value was higher than our internal estimates. We commend management for this transaction.”
9. Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF)
Gates’ Stake Value: $328.9 million
Percentage of Bill & Melinda Gates’ 13F Portfolio: 1.37%
Number of Hedge Fund Holders: 9
Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF), known as Coca-Cola FEMSA, is a Mexican multinational beverage company headquartered in Mexico City, Mexico, and is the public bottler with the largest volume of sales within the Coca-Cola System. Ranked ninth on the list of the 10 stocks to buy and hold according to Bill Gates, Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) has a market capitalization of $3.03 billion.
Bill & Melinda Gates Foundation Trust currently holds 6.2 million shares of Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF), amounting to $328.9 million and accounting for 1.37% of the foundation’s portfolio. At the end of the second quarter of 2021, 9 hedge funds in the database of Insider Monkey held stakes worth $461.9 million in Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF), down from 10 in the preceding quarter worth $404 million.
The company issued its quarterly earnings report for the second quarter of 2021 on July 26, with reported earnings per share at $0.79, beating estimates by $0.11. The company also reported revenues at $2.39 billion, crossing estimated revenues by $82.85 million.
Just like Alphabet Inc. (NASDAQ:GOOG), Walmart Inc. (NYSE:WMT) and Coupang Inc. (NYSE:CPNG), Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) is a stock that Bill Gates continues to hold.
8. FedEx Corporation (NYSE:FDX)
Gates’ Stake Value: $445.6 million
Percentage of Bill & Melinda Gates’ 13F Portfolio: 1.86%
Number of Hedge Fund Holders: 61
FedEx Corporation (NYSE:FDX) is an American multinational conglomerate holding company which focuses on transportation, e-commerce and business services. Ranked eighth on the list of the 10 stocks to buy and hold according to Bill Gates, FedEx Corporation (NYSE:FDX) has a market capitalization of $60.94 billion.
Bill & Melinda Gates Foundation Trust presently holds 1.49 million shares of FedEx Corporation (NYSE:FDX), worth $445.6 million and representing 1.86% of the foundation’s total investment portfolio. At the end of the second quarter of 2021, 61 hedge funds in the database of Insider Monkey held stakes worth $2.17 billion in FedEx Corporation (NYSE:FDX), down from 63 in the previous quarter worth $2.26 billion.
For the second quarter of 2021, FedEx Corporation (NYSE:FDX) reported earnings per share at $4.83, surpassing estimates by $0.82. In addition, the company also reported revenues at $20.56 billion, an increase of 18.70% on a year-over-year basis, and crossing estimates by $1.12 billion.
On September 23, Argus analyst John Eade lowered the firm’s price target on FedEx to $270 from $330 but kept a Buy rating on the shares, stating that despite the disappointing Q1 results, the balance sheet remains solid.
Artisan Partners, in its Q1 2021 investor letter, mentioned FedEx Corporation (NYSE: FDX). Here is what the fund had to say:
“Whatever products did make it off the line met a constrained logistics infrastructure, with commercial air capacity cut and ship cargo space at a premium. Then, in the event your dishwasher part actually made it to US waters, our ports were congested due to manpower shortages and COVID-19 protocols. When the goods were finally unloaded, it turns out trucking shortages caused a spike in ground rates! All this might be bad for your dinner parties, home décor or exercise goals, but it can be great for the middlemen. Middlemen like logistics expert FedEx.
FedEx provides global logistics services. It gets your dishwasher part on a truck, or that semiconductor chip on a plane. Surging demand for at-home deliveries during the pandemic boosted volumes and allowed management to push through price increases, keeping competitive with industry peers. The industry’s renewed pricing discipline was a welcome change, reflecting a broader commitment to earn better returns on invested capital. Despite a significant re-rating of the business over the last 12 months, FedEx remains attractive based on our margin of safety criteria.”
7. Schrodinger, Inc. (NASDAQ:SDGR)
Gates’ Stake Value: $527.8 million
Percentage of Bill & Melinda Gates’ 13F Portfolio: 2.21%
Number of Hedge Fund Holders: 20
Schrodinger, Inc. (NYSE:SDGR) is a New York-based life sciences and materials science company founded in 1990 that is involved in the development of software for computational chemistry and has a pipeline drug discovery programs. Ranked seventh on the list of the 10 stocks to buy and hold according to Bill Gates, Schrodinger, Inc. (NYSE:SDGR) has a market capitalization of $4.28 billion.
Bill & Melinda Gates Foundation Trust currently holds 6.98 million shares of Schrodinger, Inc. (NYSE:SDGR), amounting to $527.8 million in worth and accounting for 2.21% of the foundation’s portfolio. By the end of the second quarter of 2021, 20 hedge funds in the database of Insider Monkey held stakes worth over $941 million in Schrodinger, Inc. (NYSE:SDGR), an increase from 17 in the previous quarter worth $930.5 million.
For the second quarter of 2021, the company reported earnings per share at -$0.49, missing estimates by -$0.21. The company also reported revenues of $29.78 million, falling short of the estimated revenues by $92,170.
Just like Alphabet Inc. (NASDAQ:GOOG), Walmart Inc. (NYSE:WMT) and Coupang Inc. (NYSE:CPNG), Schrodinger, Inc. (NYSE:SDGR) is a stock that Bill Gates continues to hold.
Baron Growth Fund, in its Q1 2021 investor letter, mentioned Schrödinger, Inc. (NASDAQ: SDGR). Here is what the fund said:
“We also add opportunistically to existing positions where appropriate. This quarter’s abrupt focus on cyclical stocks presented an opportunity to add to several positions at particularly attractive valuations. Most notably, we added to our position in Schrodinger, Inc. when the stock declined following its conservative initial financial outlook after its extraordinary financial performance in 2020.”
6. United Parcel Service, Inc. (NYSE:UPS)
Gates’ Stake Value: $582.6 million
Percentage of Bill & Melinda Gates’ 13F Portfolio: 2.44%
Number of Hedge Fund Holders: 52
United Parcel Service, Inc. (NYSE:UPS) is a multinational shipping & receiving and supply chain management company that provides transportation, logistics, and delivery services. Ranked sixth on the list of the 10 stocks to buy and hold according to Bill Gates, United Parcel Service, Inc. (NYSE:UPS) has a market capitalization of $162.70 billion.
As of the second quarter of 2021, Bill & Melinda Gates Foundation Trust holds over 2.8 million shares of United Parcel Service, Inc. (NYSE:UPS), amounting to $582.6 million in worth and accounting for 2.44% of the foundation’s portfolio. By the end of the second quarter of 2021, 52 hedge funds in the database of Insider Monkey held stakes worth over $2.18 billion in United Parcel Service, Inc. (NYSE:UPS), an increase from 44 in the previous quarter worth $1.34 billion.
In earnings results for the second quarter, posted on July 27, the firm reported earnings per share of $3.06, beating market predictions by $0.25. The revenue over the period was reported to be $23.42 billion, up 14.49% on a year-over-year basis and beating market estimates by $259.81 million.
On July 28, Credit Suisse analyst Allison Landry lowered the firm’s price target on UPS to $240 from $261 and keeps an Outperform rating on the shares, noting that the stock sold off as the margins came in below expectations.
Just like Alphabet Inc. (NASDAQ:GOOG), Walmart Inc. (NYSE:WMT) and Coupang Inc. (NYSE:CPNG), United Parcel Service, Inc. (NYSE:UPS) is a stock that Bill Gates continues to hold.
ClearBridge Investments, an investment management firm, mentioned United Parcel Service, Inc. (NYSE: UPS) in its Q2 2021 investor letter. Here is what the fund said:
“We funded the shift primarily with trims in UPS following big gains in this name. UPS is a long-term holding that have been and remain core holdings. During the quarter, however, we took gains and resized the positions to reflect their current risk-reward post strong increases in the stocks.
UPS too has been a core, long-term holding. For many years its stock languished alongside fundamental performance that was both uneven and often uninspiring. Since Carol Tomé took the reins last summer and capitalized on COVID-19-related freight disruptions, UPS’s earnings have soared, and the stock has followed suit. We trimmed the position toward the end of the quarter despite continued near-term momentum and an undemanding valuation multiple. This trim reflects the longerterm risk, though hard to quantify, that Amazon may become a full-fledged competitor and meaningfully disrupt the dynamics of the industry. While not our base case, this risk cannot be disproven. We continue to be very bullish on UPS’s near-term outlook and optimistic about its longer-term outlook, while also continually looking over our shoulder to make sure Amazon is not on our heels.”
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Disclosure: None. 10 Stocks to Buy and Hold According to Bill Gates is originally published on Insider Monkey.
