In this article, we will take a look at the 11 best American stocks to buy now. You can skip our comprehensive analysis of these stocks, and go directly to the 5 Best American Stocks To Buy Now.
These past few years have been nothing short of eventful for the American stock market. From the Covid-19 pandemic causing increased market volatility, vaccine rollouts to combat the pandemic crisis, economic policies characterized by stimulus packages and inflation, the U.S stock market has gone through unprecedented changes. That said, the economy is well on its way to recovery. According to a report issued by the US Department of Commerce, the gross domestic product (GDP) had increased by 6.4% in the first quarter of 2021.
The US economy added 531,000 jobs in October, surpassing 312,000 jobs added in the previous month. As the coming months and years would see the economy coming back to normal, analysts believe now is the time to pile into stocks for long-term gains.
Some of the best American stocks to buy right now according to hedge funds include Meta Platforms, Inc. (NASDAQ:FB), and Tesla, Inc. (NASDAQ:TSLA) and General Electric Company (NYSE:GE), among others discussed in detail below.
Our Methodology
Let us now analyze our list of the 11 best American stocks to buy now.
These are some of the most famous US stocks among the 873 hedge funds tracked by Insider Monkey. In addition to hedge fund sentiment, we took into account analyst ratings and long-term growth prospects while choosing these stocks.
Why should we pay attention to hedge fund sentiment while choosing stocks? 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 S&P 500 ETF (SPY). Our stock picks outperformed the market by more than 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.
Best American Stocks To Buy Now
11. Tesla Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 60
Tesla, Inc. (NASDAQ:,TSLA) is a California-based company involved in the electric vehicle and clean energy businesses. Founded in 2003 by billionaire Elon Musk, the company’s stock has returned more than 153% to investors over the course of the past twelve months. It is recognized as the largest EV manufacturing company in the world.
The EV manufacturer delivered 241,300 vehicles worldwide in the third quarter of 2021, a record number of sales for the company.
In the third quarter of 2021, Tesla, Inc. (NASDAQ:TSLA) reported an EPS of $1.86, beating estimates by $0.25. The company’s revenue in the quarter came in at $13.76 billion, an increase of 56.85% on a year-over-year basis, beating revenue estimates by $54.61 million.
Catherine Woods’ ARK Investment Management is one of the biggest stakeholders of Tesla, Inc. (NASDAQ:TSLA) as of the end of the second quarter, according to the data tracked by Insider Monkey. Overall, 60 hedge funds were bullish on Tesla, Inc. (NASDAQ:TSLA) by the end of the June quarter, compared to 62 in the previous quarter.
In the Q3 2021 investor letter of Worm Capital, the management firm mentioned Tesla, Inc. (NASDAQ:TSLA). Here is what the fund said:
Our core portfolio as of this writing—TSLA, SPOT, SHOP, ABNB, and AMZN—are all premier examples of companies that use the concept of aggregation of marginal gains to continuously improve their value proposition for customers. After all, what is innovation if not just a continuous search for fractional advantages in business?
The way we see it, Tesla is perhaps the generational example of the marginal gain aggregation theory. It’s also been our largest position for several years now. There are many ways to characterize and value this business (see previous letters for longform write-ups), but perhaps the best way to think about the company is that it is a highly vertically-integrated software and hardware firm that’s devoted entirely to aggregating marginal gains across its organization. The goal? Lower costs, improve thruputs, and dramatically enhance the value proposition—at scale—for consumers…” (Click here to see the full text)
10. Starbucks Corporation (NASDAQ:SBUX)
Number of Hedge Fund Holders: 63
Starbucks Corporation (NASDAQ:SBUX) is a multinational company with several chains of coffeehouses around the world. Headquartered in Washington, the company roasts, markets and retails specialty coffee.
For the fiscal fourth quarter of 2021, Starbucks Corporation (NASDAQ:SBUX) reported earnings per share of $1.00, in-line with the market estimates. The company’s revenue for the quarter amounted to $8.15 billion, an increase of 31.33% on a year-over-year basis.
By the end of the second quarter of 2021, 63 hedge funds out of the 873 tracked by Insider Monkey held stakes in Starbucks Corporation (NASDAQ:SBUX) worth more than $4.75 billion. This is compared to 61 hedge funds in the previous quarter with a total stake value of approximately $4.44 billion.
Out of the hedge funds being tracked by Insider Monkey, Ken Fisher’s Fisher Asset Management is among the leading shareholders of Starbucks Corporation (NASDAQ:SBUX), with over 7.96 million shares worth more than $890 million.
On October 11, Deutsche Bank analyst Brian Mullan upgraded Starbucks Corporation (NASDAQ:SBUX) to Buy from Hold, with an unchanged price target of $127 on its shares.
Much like Meta Platforms, Inc. (NASDAQ:FB), Tesla, Inc. (NASDAQ:TSLA) and General Electric Company (NYSE:GE), Starbucks Corporation (NASDAQ:SBUX) is a stock investors are paying attention to.
In its Q2 2021 investor letter, Polen Capital mentioned a few stocks including Starbucks Corporation (NASDAQ:SBUX). Here is what Polen Capital stated about Starbucks Corporation (NASDAQ:SBUX).
“For Starbucks, we believe the underlying businesses for the company remain strong. Starbucks has grappled with the impact of the pandemic, but results have continued to show an ongoing post-pandemic recovery.”
9. General Electric Company (NYSE:GE)
Number of Hedge Fund Holders: 67
General Electric Company (NYSE:GE) is a Boston-based multinational conglomerate that operates through its multiple segments, which include Power, Healthcare, Aviation and Renewable Energy, among others.
Earlier on October 28, the United States Air Force awarded a $1.58 billion firm-fixed-price contract to General Electric Company (NYSE:GE) for the procurement of propulsion systems for the F-15EX fleet.
General Electric Company (NYSE:GE) released its quarterly earnings report for the third quarter of 2021 on October 26, with reported earnings per share at $0.57, beating estimates by $0.13. The company also reported revenues at $18.43 billion for the period.
Of the 873 elite funds tracked by Insider Monkey, 67 were long General Electric Company (NYSE:GE) at the end of June, compared to 68 hedge funds in the first quarter of 2021. Alexander Becker of Codex Capital is the leading stakeholder of the company.
On October 7, Wells Fargo analyst Joseph O’Dea initiated coverage of General Electric Company (NYSE:GE) with an Equal Weight rating and a $107 price target on the company’s shares.
In its Q1 2021 investor letter, Vulcan Value Partners, an asset management firm, highlighted a few stocks and General Electric Company (NYSE:GE) was one of them. Here is what the fund said:
“General Electric is outperforming our expectations for 2021 as the economic recovery is occurring faster than expected. We are particularly pleased with its free cash flow generation. We are happy to own it in our portfolio.”
8. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 71
Walmart Inc. (NYSE:WMT) is a multinational retail corporation. The company operates in the wholesale business through its chains of hypermarkets, supermarkets and discount department stores.
As of Q2 2021, the number of hedge funds having stakes in Walmart Inc. (NYSE:WMT) grew to 71, from 58 in the previous quarter. The total value of these stakes is over $8 billion. Ken Fisher’s Fisher Asset Management is the company’s leading shareholder, with 12.6 million shares worth $1.78 billion.
For the fiscal second quarter of 2022, Walmart Inc. (NYSE:WMT) reported an EPS at $1.78, beating market estimates by $0.21. Additionally, the company’s revenue for the quarter came in at $139.87 billion, crossing consensus forecasts by $3.87 billion.
On October 25, KeyBanc analyst Edward Yruma maintained an Overweight rating and a price target of $180 on the shares of Walmart Inc. (NYSE:WMT).
Besides Meta Platforms, Inc. (NASDAQ:FB), Tesla, Inc. (NASDAQ:TSLA) and General Electric Company (NYSE:GE), Walmart Inc. (NYSE:WMT) is a stock that hedge funds are interested in.
7. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders: 112
More commonly referred to as simply Disney, The Walt Disney Company (NYSE:DIS) is a multinational mass media and entertainment conglomerate. Headquartered in California, the company holds a branched out interest in entertainment and mass media. Some of its most notable sections include The Walt Disney Pictures, Walt Disney Animation Studios, Pixar and Disney World.
On September 21, The Walt Disney Company (NYSE:DIS) projected 230 million to 260 million subscribers by 2024 for its subscription-based video streaming service, Disney+.
As of the end of the second quarter of 2021, Philippe Laffont of Coatue Management is among the leading shareholders of The Walt Disney Company (NYSE:DIS), according to the data tracked by Insider Monkey. Overall, 112 funds were bullish on the company by the end of the June quarter, compared to 134 in the previous quarter.
On September 22, Bank of America analyst Jessica Reif Ehrlich reiterated a Buy rating alongside a $223 price target on shares of The Walt Disney Company (NYSE:DIS).
In its Q2 2021 investor letter, RiverPark Funds mentioned The Walt Disney Company (NYSE:DIS) and discussed its stance on the firm. Here is what the fund said:
“DIS shares declined for the quarter, taking a pause after a big fourth quarter and first quarter stock price advance, as Disney+ subscriber numbers were disappointing to investors. Disney+, the company’s DTC streaming business, had blown past previous subscriber projections, having gone from zero to 104 million in 17 months, but investors were now expecting 109 million subscribers. Management still expects significant continued growth to 230-260 million subscribers in 2024.
DIS is blessed with a deep library of unique content that includes both live sports (providing large, non-time shifted audiences) and incomparable brands including Disney, Marvel, Pixar, and Lucasfilm, as well as the ABC network. The company also has a wealth of upcoming new content, expecting over 100 original titles per year, including two new Star Wars spin-off series, 10 Star Wars films, 10 Marvel films, 15 Disney and Pixar films, and 15 Disney and Pixar series.
Now that the disruption in its theme park, cruise, and theatrical businesses appears to be coming to an end, we believe that Disney is among the best-positioned media companies in the new landscape to combine multi-channel and DTC distribution. We also note that DIS has an extremely strong balance sheet and a growing pool of free cash flow to be used both to return to shareholders and to invest in future opportunities.”
6. Netflix, Inc. (NASDAQ:NFLX)
Number of Hedge Fund Holders: 113
Netflix, Inc. (NASDAQ:NFLX) is a subscription-based entertainment services company that offers TV series, documentaries and feature films across a wide variety of genres and languages. The company reported adding 4.4 million new subscribers in the third quarter of 2021 for a total of 214 million paid subscribers, topping the expectations set last quarter.
As of the end of the second quarter, 113 hedge funds tracked by Insider Monkey reported owning stakes in Netflix, Inc. (NASDAQ:NFLX). The total worth of these stakes is $13.2 billion. This shows the hedge fund sentiment is positive for the entertainment company as 110 hedge funds had stakes in the company in the previous quarter, having a total worth of $14 billion.
On October 13, Jefferies analyst Andrew Uerkwitz raised his price target on Netflix, Inc. (NASDAQ:NFLX) to $737 from $620, and kept a Buy rating on the shares of the company.
Out of the hedge funds being tracked by Insider Monkey, Ken Fisher’s Fisher Asset Management is among the leading shareholders of Netflix, Inc. (NASDAQ:NFLX), with 3.98 million shares amounting to $2.1 billion in worth.
In its Q1 2021 investor letter, Polen Capital, an asset management firm, highlighted a few stocks and Netflix, Inc. (NASDAQ:NFLX) was one of them. Here is what the fund said:
“We purchased Netflix in March, initiating a 3% position in the Portfolio. We believe Netflix is a highly competitively advantaged company. It has recently met all our investment guardrails, and we anticipate it will remain sustainably above our guardrails over the next five years and beyond. We know Netflix for its ubiquitous streaming service and deep library of owned content. The company has made investments in this content (currently running at nearly $20 billion/year), generally keeping subscribers highly engaged and loyal to their service. The company has number one market share in 99% of markets globally, but it is our view that video streaming on-demand is still an underpenetrated space with many years of attractive growth likely ahead. The service is also relatively affordable at roughly $11/month on average globally.
We believe Netflix’s growth in content spend is beginning to moderate, which could allow margin expansion to continue for many years when paired with ongoing subscriber growth and price increases. While there is competition from the likes of Apple (Apple TV+), Amazon (Prime Video), Disney (Disney+ and Hulu), and others, we believe there can be a handful of winners in this industry. Already, we see many people subscribe to multiple streaming video services, with Netflix being their “anchor” service. That said, the barriers to entry are high, and we believe they are getting higher given the substantial amount of capital and size of the subscriber base required to maintain a competitive service for both viewers and content producers. Over the next five years, we expect Netflix’s earnings growth to be approximately 30% annualized and free cash flow to grow at an even higher rate.”
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Disclosure. None. 11 Best American Stocks To Buy Now is originally published on Insider Monkey.
