In this piece, we will take a look at ten stocks that Wall Street analysts and billionaires are crazy about. If you want to skip our introduction to the economy and the outlook of the stock market, head on over to 5 Stocks Wall Street Analysts and Billionaires Are Crazy About.
The economy, its indicator, and the resulting impact on the stock market are all that anyone can talk about these days. At the same time, these indicators have now started to get confusing. As the year started, investors were in no mood to take it slow as inflation fell and bets rose for the Federal Reserve’s potential pause and then reversal of its aggressive interest rate hike spree. However, just as investors were getting comfortable, worries of a potential default started to surface and at the same time, several regional banks failed. This created jitters in the economy but also gave some hope that the Fed would stop raising the rates.
Despite the turmoil, the central bank remained focused on its larger task at hand which is to slow down the economy and reduce inflation. Things on this front appeared to be going rather well until the Labor Department released the data for May’s employment figures. It showed that the labor market is proving to be a hard one to dent, as while unemployment rose to 3.7%, the economy nevertheless added 339,000 jobs. This provided a mixed take on the labor market, with the stock market bulls pointing to the unemployment rate and the bears pointing to the number of jobs.
Additionally, the aggressive interest rate hikes have also created worries of a recession. These past three quarters have perhaps been littered with the term with analysts of all cadres predicting that a recession is just around the corner. However, we’re about to enter the second half of the year and the American economy is still kicking. And the latest jobs report seems to have dented the recessionary sentiment. After the data was released economists including Zip Recruiter’s chief economist Julia Pollock pointed out that the labor market has remained remarkably resilient, and coupled with repressed American spending during the pandemic coming out in full flow, it can create a “virtuous cycle” that is hard to break. This sentiment is also echoed by the chief economist of RSM US LLP, a consulting and auditing firm. Mr. Joe Brusuelas, in a blog post written after the release, was quite succinct in his assessment as he simply stated that “[a]s long as the economy continues to produce more than 200,000 jobs a month, this economy is not going to slip into recession.”
Building on this, investment bank Goldman Sachs is another one to quickly adjust its recession forecast. Goldman had increased its probability of a recession in the U.S. to 35% in mid May, but it surprised market observers in June as it cut it back to an earlier 25% in less than a month. One of the biggest banks in the world, Goldman Sachs now believes that the stressors generated by the collapse of Silicon Valley Bank and the potential of a U.S. default are now both relatively less impactful on economic sentiment. Its investor note released on June 6th outlined:
We have become more confident in our baseline estimate that the banking stress will subtract only a modest 0.4 percentage points from real GDP growth this year, as regional bank stock prices have stabilized, deposit outflows have slowed, lending volumes have held up, and lending surveys point to only limited tightening ahead.
The note added that the investment bank believes that the Fed will signal more interest rate hikes in its upcoming meeting in mid June, and it can potentially deliver a 25 basis point interest rate hike in July to bring the peak Fed funds rate to 5.25%.
Given that the labor market is a key determinant of the economic outlook in America, let’s take a look at what hiring firms are saying (you can also take a look at 12 Best Staffing Company Stocks To Buy Now). Management of Robert Half International Inc. (NYSE:RHI) shared during the firm’s latest earnings call conference:
Global labor markets remain tight and clients continue to hire albeit at a more measured pace many are more selective and have added steps to their hiring processes, which impacts their decision time frames and lengthens our sales cycle. Talent shortages continue, while modestly off their peaks, job openings and quit rates in the United States, remain well above historical levels and the unemployment rate stands at 3.5% a 50 year low. The National Federation of Independent Businesses an FIB recently reported that 90% of small business owners hiring are trying to hire had few or no qualified applicants and 43% of all small business owners had job openings that cannot be filled. Protivity achieved another solid quarter of revenue growth led by the regulatory risk and compliance practice as well as technology consulting.
Protiviti continues to have a very strong pipeline across an increasingly diverse offering of solutions. We continue to invest in the tools we need to secure top talent for our clients by combining the power of our proven artificial intelligence based technologies with the skills, judgment and expertise of our specialized recruiting professionals. It is our unique and powerful combination of both that sets us apart in the marketplace. We’ve weathered many economic cycles in the past each time emerging to achieve higher peaks. The most recent includes the fastest recovery in our company’s history following the COVID-19 downturn. We also benefit from Protiviti’s greater resiliency stemming from its diversified solutions offerings. We remain committed to our time tested corporate purpose to connect people to meaningful and exciting work and to provide clients with the talent and consulting expertise they need to confidently compete and grow.
Looking at these comments, it’s clear that if the economy was left to the hiring companies, there won’t be a recession ever. But, in case there is one, it might be important to see what stocks investment professionals are confident about and billionaires are piling into. We’ve done that today and some top picks are Scorpio Tankers Inc. (NYSE:STNG), WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC), and ZTO Express (Cayman) Inc. (NYSE:ZTO).
Photo by Ruben Sukatendel on Unsplash
Our Methodology
To compile our list of the stocks that Wall Street analysts recommend and billionaires are buying, we first used a stock screener to pick the companies that have a stock rating of a Strong Buy. Then, to gauge long term analyst sentiment, we narrowed the list by focusing on companies with multiple digit share price upside. Finally, the number of billionaires that had bought their shares was determined using Insider Monkey’s database and the top ten stocks favored by Wall Street analysts and bought by billionaires are as follows.
Stocks Wall Street Analysts and Billionaires Are Crazy About
10. Tango Therapeutics, Inc. (NASDAQ:TNGX)
Number Of Billionaire Investors As of Q1 2023: 5
Tango Therapeutics, Inc. (NASDAQ:TNGX) is a biotechnology company headquartered in Boston, Massachusetts. The firm primarily develops treatment for cancer and it was set up in 2007.
18 of the 943 hedge funds part of Insider Monkey’s database had held a stake in Tango Therapeutics, Inc. (NASDAQ:TNGX) during the first quarter of this year. Out of these, five are billionaires with a cumulative stake of $5.6 million.
Along with Tango Therapeutics, Inc. (NASDAQ:TNGX), WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC), Scorpio Tankers Inc. (NYSE:STNG), and ZTO Express (Cayman) Inc. (NYSE:ZTO) are some stocks both Wall Street analysts and billionaires are piling into.
9. Mammoth Energy Services, Inc. (NASDAQ:TUSK)
Number Of Billionaire Investors As of Q1 2023: 7
Mammoth Energy Services, Inc. (NASDAQ:TUSK) is an industrial company based in Oklahoma City, Oklahoma. It serves the needs of the energy industry and provides services such as the construction and maintenance of electricity distribution networks.
After digging through 943 hedge funds for their March quarter of 2023 investments, Insider Monkey discovered that 14 had bought the firm’s shares. Mammoth Energy Services, Inc. (NASDAQ:TUSK)’s largest hedge fund investor in our database is Charles Davidson’s Wexford Capital since it owns 22 million shares that are worth $94 million.
8. Vector Group Ltd. (NYSE:VGR)
Number Of Billionaire Investors As of Q1 2023: 7
Vector Group Ltd. (NYSE:VGR) is a diversified firm that sells cigarettes under several brands and also operates real estate properties such as hotels and apartment buildings.
Insider Monkey took a look at 943 hedge funds for their first quarter of 2023 portfolios to discover that 16 had held a stake in Vector Group Ltd. (NYSE:VGR). Billionaire Jim Simons’ Renaissance Technologies is its largest hedge funds shareholder with a $88 million stake.
7. UBS Group AG (NYSE:UBS)
Number Of Billionaire Investors As of Q1 2023: 8
UBS Group AG (NYSE:UBS) is a Swiss bank based in Zurich, Switzerland. It is one of the oldest firms on our list and offers personal, corporate, and investment banking products.
30 of the 943 hedge funds part of Insider Monkey’s database had invested in the bank during this year’s March quarter. Out of these, UBS Group AG (NYSE:UBS)’s largest shareholder is Richard S. Pzena’s Pzena Investment Management with a $80 million investment.
6. Viking Therapeutics, Inc. (NASDAQ:VKTX)
Number Of Billionaire Investors As of Q1 2023: 9
Viking Therapeutics, Inc. (NASDAQ:VKTX) is an American biotechnology company headquartered in San Diego, California. It develops drugs for patients suffering from surgical complications and liver diseases among others.
Insider Monkey’s first quarter of 2023 survey covering 943 hedge funds revealed that 40 had invested in Viking Therapeutics, Inc. (NASDAQ:VKTX). Israel Englander’s Millennium Management is the firm’s largest shareholder with a $63 million investment.
Scorpio Tankers Inc. (NYSE:STNG), Viking Therapeutics, Inc. (NASDAQ:VKTX), WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC), and ZTO Express (Cayman) Inc. (NYSE:ZTO) are some stocks recommended by analysts and bought by billionaires.
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Disclosure: None. 10 Stocks Wall Street Analysts and Billionaires Are Crazy About is posted on Insider Monkey.
