In this piece, we will take a look at the 12 best growth stocks to buy according to billionaire Ken Fisher. If you want to skip our overview of Mr. Fisher, his hedge fund, growth investing, and the general stock market climate, then you can take a look at 5 Best Growth Stocks to Buy Today According to Billionaire Ken Fisher.
Ken Fisher is one of the richest people in the hedge fund industry and the world, with Forbes Magazine estimating his net worth to sit at $7.5 billion as of December 2023. The reason Mr. Fisher is so rich is because he has been investing in the stock market for decades through his hedge fund Fisher Investments. Insider Monkey’s research shows that as of September 2023, Fisher’s investment portfolio was worth $176 billion – making it one of the biggest hedge funds in the world. Of course, a $176 billion portfolio does not necessarily represent all the capital that investors have placed with Mr. Fisher’s hedge fund. In fact, the actual value may be lower since hedge funds often use client money to borrow more money from banks and then invest all of it on the stock market – which often means that the portfolios are worth more than the capital that the hedge fund itself can lay a claim to.
2023 has been a great year for Fisher Investments if we consider its portfolio value. This is because as Q3 2022 ended, the firm’s investment portfolio was worth $133 billion, leading to a 32% annual growth in 2023. Looking at the stock market’s performance in 2023, it’s unsurprising why Fisher Investments has been able to grow its investment pie. This year technology stocks have mounted a strong comeback, which has seen the S&P 500 Information Technology index rise by 52% year to date and the flagship technology index, the NASDAQ 100 post 49.87% in returns. Fisher Investment’s top three investments in this year’s September quarter were Microsoft Corporation (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL), and Alphabet Inc. (NASDAQ:GOOG) – making the portfolio’s increase rather self explanatory.
For its investment strategies, Fisher Investments targets stock markets in the U.S., Europe, the U.K., emerging markets, and other areas. At the heart of its investment strategy is the belief that an investor must “must identify information not widely known or interpret widely known information differently and correctly from other market participants.” To exploit this information analysis edge, the hedge fund “applies proprietary capital markets technology to seek out and process opportunities to exploit such information.“
Shifting gears, while others, such as Warren Buffett of Berkshire Hathaway and Seth Klarman of Baupost Group are sworn value investors that seek to find stocks that are trading lower than their intrinsic value might suggest, Mr. Fisher also dabbles with growth stocks. These stocks are those with high financial ratios that reflect market sentiment about their underlying business model and catalysts that can enable rapid revenue growth in the future. When it comes to selecting growth stocks, while one of the most important ratios that everyone uses is the price to earning (P/E) ratio, it isn’t the only one that’s used. Another ratio is the price to sales (P/S) ratio, which measures the premium that the market is paying over a firm’s net sales.
As a testament to Mr. Fisher’s contributions to the finance industry, he is the one who actually introduced the P/S ratio. The P/S was introduced to the finance industry in 1984 when Mr. Fisher wrote an article for the American Association of Individual Investors. (AAII). In this article, he likened the P/S ratio to a true indicator of a stock’s popularity when compared to the P/E ratio.
According to him:
Price-sales ratios measure the popularity of the stock. This is helpful for a number of investment theories. A long-held standard of such legendary investors as Warren Buffett, Philip Fisher, Benjamin Graham, John Templeton and others is to buy unpopular stocks of good companies. But first, you must know if a stock is popular or not.
It is becoming common to view low price-earnings stocks as synonymous with low popularity. I have nothing against the low price-earnings school and view low price-earnings ratios as a viable way to seek above-average reward at below-average risk. But low price-earnings ratios are not a strong measure of popularity. They are too elastic.
Too much attention is focused on current earnings. Earnings are a result—not a cause. At best, they result from a lot of accounting assumptions trickling their way through an operating company’s books. The basic factors affecting the value of a stock tie more closely into the income statement’s top half—a company’s product position and cost structure allowing it to do a certain amount of business. Employing the price-sales ratio as another tool of analysis helps put stocks in their proper perspective.
Today, we’ll take a look at Ken Fisher’s top growth stock picks. Some notable names are Amazon.com, Inc. (NASDAQ:AMZN), Costco Wholesale Corporation (NASDAQ:COST), and Eli Lilly and Company (NYSE:LLY).
Our Methodology
To make our list of the best growth stocks to buy according to Ken Fisher, we ranked his top 32 investments during Q3 2023 by their price to forward earnings ratio and picked out the top stocks.
Best Growth Stocks to Buy Today According to Billionaire Ken Fisher
12. Salesforce, Inc. (NYSE:CRM)
Latest Price To Forward Earnings Ratio: 26.6
Salesforce, Inc. (NYSE:CRM) is an American technology company that enables businesses to manage their customer relationships and data. It expanded its presence in the A.I. market in December after a recruitment company announced that it. will use Salesforce, Inc. (NYSE:CRM)’s chatbot to improve user experience.
During 2023’s September quarter, 122 out of the 910 hedge funds part of Insider Monkey’s database had held a stake in Salesforce, Inc. (NYSE:CRM). Ken Fisher’s Fisher Asset Management was the firm’s biggest shareholder as it owned 14.1 million shares that are worth $2.8 billion.
Along with Costco Wholesale Corporation (NASDAQ:COST), Amazon.com, Inc. (NASDAQ:AMZN), and Eli Lilly and Company (NYSE:LLY), Salesforce, Inc. (NYSE:CRM) is a top Ken Fisher growth stock pick.
11. Netflix, Inc. (NASDAQ:NFLX)
Latest Price To Forward Earnings Ratio: 28.99
Netflix, Inc. (NASDAQ:NFLX) is an entertainment company that enables users to watch television shows, movies, and other content. The firm’s shareholders were in for some great news in December 2023 when a report shared with Reuters showed that Netflix, Inc. (NASDAQ:NFLX) stands to grow its advertising revenues by a whopping 50% next year.
As of Q3 2023 end, 102 out of the 910 hedge funds profiled by Insider Monkey were the firm’s investors. Netflix, Inc. (NASDAQ:NFLX)’s largest hedge fund investor is Ken Fisher’s Fisher Asset Management as it owns a $1.5 billion stake.
10. Mastercard Incorporated (NYSE:MA)
Latest Price To Forward Earnings Ratio: 29.15
Mastercard Incorporated (NYSE:MA) is a financial products and services provider. It has beaten analyst EPS estimates in all four of its latest quarters and the shares are rated Strong Buy on average with an average share price target of $447.91.
Insider Monkey dug through 910 hedge funds for their third quarter of 2023 shareholdings to find 140 Mastercard Incorporated (NYSE:MA) shareholders. Charles Akre’s Akre Capital Management was the biggest shareholder due to its $2.3 billion investment.
9. Apple Inc. (NASDAQ:AAPL)
Latest Price To Forward Earnings Ratio: 29.33
Apple Inc. (NASDAQ:AAPL) is the world’s largest consumer technology company. These days there is speculation in the market that the firm’s future iPhones might feature 6G technology after job advertisements from Apple Inc. (NASDAQ:AAPL) show that it wants to hire 6G engineers.
By the end of this year’s third quarter, 134 out of the 910 hedge funds covered by Insider Monkey had held a stake in the tech company. Apple Inc. (NASDAQ:AAPL)’s largest investor in our database is Warren Buffett’s Berkshire Hathaway as it holds $156 billion of shares.
8. Microsoft Corporation (NASDAQ:MSFT)
Latest Price To Forward Earnings Ratio: 33.22
Microsoft Corporation (NASDAQ:MSFT) is another technology behemoth. December was an important month for its stock as Cathie Wood’s Ark Investment revealed that it had bought more than 8,800 Microsoft Corporation (NASDAQ:MSFT) shares for the first such purchase since Q1 2023.
In 2023’s third quarter, 306 hedge funds out of the 910 profiled by Insider Monkey had bought and owned Microsoft Corporation (NASDAQ:MSFT)’s shares. Michael Larson’s Bill & Melinda Gates Foundation Trust was the firm’s biggest shareholder through its $12.4 billion investment.
7. ASML Holding N.V. (NASDAQ:ASML)
Latest Price To Forward Earnings Ratio: 33.78
ASML Holding N.V. (NASDAQ:ASML) is one of the most important industrial equipment companies in the world since it makes and sells machines that are used to make semiconductors. Its shares are rated Buy on average and analysts have set an average share price target of $720.
As this year’s September quarter ended, 57 out of the 910 hedge funds part of Insider Monkey’s database were the firm’s investors. ASML Holding N.V. (NASDAQ:ASML)’s largest hedge fund investor is Ken Fisher’s Fisher Asset Management as it owns 2.8 million shares that are worth $2.8 billion.
6. Adobe Inc. (NASDAQ:ADBE)
Latest Price To Forward Earnings Ratio: 34.85
Adobe Inc. (NASDAQ:ADBE) is a software company known for its image editing and other products. The firm is ending 2023 on a high note, as it updated its web and application design system, Spectrum, in December 2023.
112 among the 910 hedge funds tracked by Insider Monkey were Adobe Inc. (NASDAQ:ADBE)’s shareholders during Q3 2023. Ken Fisher’s Fisher Asset Management was the biggest shareholder as it owned $2.3 billion worth of shares.
Amazon.com, Inc. (NASDAQ:AMZN), Adobe Inc. (NASDAQ:ADBE), Costco Wholesale Corporation (NASDAQ:COST), and Eli Lilly and Company (NYSE:LLY) are some top growth stocks to buy according to Ken Fisher.
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Disclosure: None. 12 Best Growth Stocks to Buy Today According to Billionaire Ken Fisher is originally published on Insider Monkey.
