12 Best Big Stocks To Invest In

Published on November 18, 2021 at 5:36 am by Berkalp Altay in Hedge Funds, News

In this article, we discuss the 12 best big stocks to invest in. If you want to skip our detailed analysis of these stocks, go directly to the 5 Best Big Stocks To Invest In.

Big stocks, also known as large-cap stocks, are stocks with a market capitalization of $10 billion or more. There is also a subset of stocks under large-cap stocks. This subset is called mega-cap stocks with a market cap of $200 billion or more.

One index that tracks big stocks with largest market caps is S&P 100 – a subset of S&P 500. According to S&P Global, S&P 100 is designed to track 100 major blue chip companies in the United States. As of August 31, 2021, this index includes 101 stocks. The median total market capitalization in the index is at $165.466 billion billion with the smallest at $39.389 billion and the largest at $2.533 trillion.

While S&P Global mentions sector representation or balance as one of the factors used to screen stocks for S&P 100, this index features an extensive number of tech companies. Information technology and communication services stocks such as Apple Inc. (NASDAQ: AAPL) and Facebook, Inc. (NASDAQ: FB) account for 48.4% of all the stocks in the S&P 100. Consumer discretionary stocks such as Amazon.com, Inc. (NASDAQ: AMZN) and Tesla, Inc. (NASDAQ: TSLA) account for an additional 13.3%.

While stock valuations will change over time and the pandemic-era economic stimuli will come to an end, some of these companies have established themselves firmly as blue chip market leaders.

Photo by Alexandr Bormotin on Unsplash

Our Methodology

We chose some of the most famous large-cap stocks based on the data of 873 hedge funds tracked by Insider Monkey.

Why should we pay attention to hedge fund sentiment during stock selection? 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[see details here]. We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. 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 Big Stocks To Invest In

12. Tesla, Inc. (NASDAQ: TSLA)

Number of Hedge Fund Holders: 60

Tesla, Inc. (NASDAQ: TSLA) is an American company known for its electric vehicles as well as its energy business selling solar energy and battery energy storage products. It is ranked twelfth on our list of 12 best big stocks to invest in. The stock has returned over 123% to investors over the course of the past year.

At the end of the second quarter of 2021, 60 hedge funds in the database of Insider Monkey held stakes worth $9.30 billion in Tesla, Inc. (NASDAQ: TSLA).

Out of the hedge funds tracked by Insider Monkey, Cathie Wood’s ARK Investment Management has the most valuable stake in Tesla, Inc. (NASDAQ: TSLA) as of the end of the second quarter of 2021, worth close to $3.69 billion, comprising 6.87% of its 13F portfolio.

In its Q2 2021 investor letter, Worm Capital LLC, an investment management firm, mentioned Tesla, Inc. (NASDAQ: TSLA). Here is what the firm had to say:

“Tesla underperformed in the quarter, but we maintain our high conviction in the long-term thesis on each business model. Much like art or writing, investment research is a continuous process—it never really ends. Prices can move in either direction in any given quarter, but our advantage often comes from knowing the businesses so well that short-term fluctuations in pricing shouldn’t affect our decision-making. On high conviction positions, this patience is often rewarded, which is why research is so valuable to our process…

..Tesla is in a class of its own. What many in the market seem to (still) not understand is that Tesla is not a car company so much as a complex manufacturing firm—with significant recurring software potential—growing, in our view, at a targeted rate of 50-100% YoY over the next several years. Unlike any other automotive firm in existence today, Tesla alone is a vertically integrated hardware and software business developing state-of-the-art manufacturing techniques that will revolutionize the auto industry (i.e. its Giga Presses, 4680 cells, etc.). It is a generational company and we anticipate it will eventually be the largest company in the world. Many of the conventional narratives around competition displacing Tesla’s lead are fundamentally flawed, and the many headlines surrounding Tesla’s approach to autonomy are frustratingly superficial. (As an aside, we highly recommend watching Andrej Karpathy’s, Tesla’s head of AI, his recent presentation from June: “Tesla details its self-driving Supercomputer that will bring in the Dojo era”)”

11. Walmart Inc. (NYSE: WMT)

Number of Hedge Fund Holders: 71

Walmart Inc. (NYSE: WMT) is an American retailer corporation known for its hypermarkets across North America. It is the largest retailer in the United States and the world’s largest company by revenue. It is ranked eleventh on our list of 12 best big stocks to invest in.

At the end of the second quarter of 2021, 71 hedge funds in the database of Insider Monkey held stakes worth $8.05 billion in Walmart Inc. (NYSE: WMT), up from 58 the preceding quarter worth $5.88 billion.

Out of the hedge funds tracked by Insider Monkey, billionaire Ken Fisher’s Fisher Asset Management has the most valuable in Walmart Inc. (NYSE: WMT) as of the end of the second quarter of 2021, worth close to $1.78 billion, comprising 1.11% of its 13F portfolio. Fisher Asset Management increased its stake in Walmart Inc. (NYSE: WMT) by 4% during the second quarter of 2021.

10. NVIDIA Corporation (NASDAQ: NVDA)

Number of Hedge Fund Holders: 86

NVIDIA Corporation (NASDAQ: NVDA) is an American tech company active mainly in the semiconductor industry. Its products span from chips to graphics processing units to supercomputers used in cloud computing. It is ranked tenth on our list of 12 best big stocks to invest in. The stock has returned over 75.51% to investors over the course of the past year.

At the end of the second quarter of 2021, 86 hedge funds in the database of Insider Monkey held stakes worth $9.10 billion in NVIDIA Corporation (NASDAQ: NVDA), up from 80 the preceding quarter worth $6.20 billion.

Out of the hedge funds tracked by Insider Monkey, GQG Partners has the most valuable stake in NVIDIA Corporation (NASDAQ: NVDA) as of the end of the second quarter of 2021, worth close to $2.97 billion, comprising 8.73% of its 13F portfolio.

Like Facebook, Inc. (NASDAQ: FB), Microsoft Corporation (NASDAQ: MSFT), and Amazon.com, Inc. (NASDAQ: AMZN), investors are paying attention to NVIDIA Corporation (NASDAQ: NVDA) amid the company’s long-term growth potential.

In its Q2 2021 investor letter, Baron Opportunity Fund mentioned NVIDIA Corporation (NASDAQ: NVDA). Here is what the fund had to say:

“NVIDIA Corporation is a fabless semiconductor company and a leader in gaming cards and accelerated computing chips. Shares of NVIDIA rose in the second quarter on financial results and guidance significantly above Street expectations, as it benefited from the upgrade cycle in its gaming franchise along with continued AI-related strength driving its data center segment. NVIDIA’s total revenues of $5.66 billion beat Street expectations by $266 million, growing 84% (including the benefit of acquisitions, 65% organic), with its gaming business growing over 100% and its data center business expanding nearly 80%. We remain confident in NVIDIA’s leading position in gaming, data centers, and autonomous machines.”

9. Johnson & Johnson (NYSE: JNJ)

Number of Hedge Fund Holders: 88

Johnson & Johnson (NYSE: JNJ) is a New Jersey-based multinational corporation with products and services in pharmaceutical, consumer health, and medical devices. It is ranked ninth on our list of 12 best big stocks to invest in. The stock has returned over 17.04% to investors over the course of the past year.

At the end of the second quarter of 2021, 88 hedge funds in the database of Insider Monkey held stakes worth $7.06 billion in Johnson & Johnson (NYSE: JNJ), up from 81 the preceding quarter worth $6.91 billion.

Out of the hedge funds tracked by Insider Monkey, Fundsmith LLP has the most valuable stake in Johnson & Johnson (NYSE: JNJ) as of the end of the second quarter of 2021, worth close to $1.18 billion, comprising 3.26% of its 13F portfolio.

8. JPMorgan Chase & Co. (NYSE: JPM)

Number of Hedge Fund Holders: 108

JPMorgan Chase & Co. (NYSE: JPM) is an American bank known for its various financial services and investment banking. It is the largest U.S. bank by total assets. It is ranked eighth on our list of 12 best big stocks to invest in. The stock has returned over 42% to investors over the course of the past year.

At the end of the second quarter of 2021, 108 hedge funds in the database of Insider Monkey held stakes worth $4.93 billion in JPMorgan Chase & Co. (NYSE: JPM).

Out of the hedge funds tracked by Insider Monkey, billionaire Ken Fisher’s Asset Management has the most valuable stake in JPMorgan Chase & Co. (NYSE: JPM) as of the end of the second quarter of 2021, worth around $1.07 billion, comprising 0.67% of its 13F portfolio. Fisher Asset Management’s stake increased by 4% during the second quarter of 2021.

7. Berkshire Hathaway Inc. (NYSE: BRK-B)

Number of Hedge Fund Holders: 116

Berkshire Hathaway Inc. (NYSE: BRK-B) is an American multinational holding company founded and managed by Warren Buffett, one of the most notable investors of all times.

At the end of the second quarter of 2021, 116 hedge funds in the database of Insider Monkey held stakes worth $22.38 billion in Berkshire Hathaway Inc. (NYSE: BRK-B), up from 111 the preceding quarter worth $19.9 billion.

In its Q1 2021 investor letter, Vltava Fund, an investment management firm, mentioned Berkshire Hathaway Inc. (NYSE: BRK-B). Here is what the firm had to say:

“Despite the considerable rise in stock markets over the past year, there are still many attractive opportunities. Human nature also is playing a bit into our hands. Investor crowds often chase popular stocks, hot IPOs, or mysterious SPACs and completely leave aside stocks they consider boring and not sexy enough. A typical example of this category is our long-term largest position in Berkshire Hathaway. Since we bought it for the first time, its price has nearly quadrupled and yet it remains just as undervalued today as it was at that time. Considering the current rate at which it is buying back its own shares and the amount of cash that Berkshire Hathaway has, my greatest wish as a shareholder is for the company’s share price to remain as low as possible for as long as possible.”

6. Apple Inc. (NASDAQ: AAPL)

Number of Hedge Fund Holders: 138

Apple Inc. (NASDAQ: AAPL) is an American multinational tech company focusing on consumer electronics and software – known for its products such as iPhone, iOS and MacOS operating systems as well as iCloud and Apple TV. The stock has returned over 30% to investors over the course of the past year.

Out of the hedge funds tracked by Insider Monkey, billionaire Warren Buffett’s Berkshire Hathaway has the most valuable stake in Apple Inc. (NASDAQ: AAPL) as of the end of the second quarter of 2021, worth close to $121.50 billion, comprising 41.46% of its 13F portfolio.

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