13 Best Fortune 500 Stocks to Buy Now

Published on December 14, 2023 at 8:17 am by Usman Kabir in Hedge Funds, News

In this article, we discuss the 13 best Fortune 500 stocks to buy now. If you want to read about some more Fortune 500 stocks, go directly to 5 Best Fortune 500 Stocks to Buy Now.

The post-pandemic economic boom was somewhat overshadowed by supply chain issues, inflation, and geopolitical tensions in the past two years. A fiscal tightening by the Federal Reserve to tackle soaring prices also led to recession fears. The United States economy, however, weathered these storms to emerge stronger than ever. Analysts are now predicting a major boom for stocks. Ed Yardeni, a prominent financial analyst and founder of Yardeni Research, has forecast that the benchmark S&P 500 will jump 30% to 6,000 by 2025.

Tech firms will remain a key driver of this growth, with Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), all of which feature in the Fortune 500, an annual list compiled and published by Fortune magazine that ranks 500 of the largest United States corporations by total revenue, expected to benefit from the economic boom. The stocks of these three companies are up by 58%, 56%, and 50% this year. After a 12% plunge in 2022, the benchmark S&P 500 is likely to end 2023 with 14% in gains.

This optimism is riding on recent statements from the Federal Reserve that indicate that rate cuts will begin next year. On December 14, Fed chief Jerome Powell said that the Fed was done raising rates as inflation cooled. Stocks rallied and bond yield shrunk after that statement, with analysts jacking up their price forecasts for the coming months. The Fed is expected to make three quarter point cuts to the benchmark interest rates next year. These rates had been at their highest level since 2001 after record inflation in 2022.

Not everybody is convinced about the emerging trends. In late November, prominent investment firm JPMorgan released a gloomy forecast for 2024. In a transition year for the economy, the investment bank predicted that the benchmark S&P 500 would drop to around 4,200 by the end of 2024. The bank identified shrinking global growth and household savings, rising geopolitical risks, and elections in the United States that could add to policy volatility as some of the prime reasons behind this pessimistic forecast.

The position of JPMorgan stands in contrast to others on Wall Street. In addition to Yardeni, famous firms like Bank of America and Deutsche Bank have also backed the S&P 500 to touch record highs next year. Goldman Sachs and Morgan Stanley are also constructive on the index, with David Kostin at the former and Mike Wilson at the latter both predicting that the index will come close to the previous peak in the next few months. The average analyst estimate for the index for 2024 sits at around 4,664, per Bloomberg.

Investors eager to get on top of these growth trends should have a listen to recent remarks by Sundar Pichai, the CEO of tech firm Alphabet Inc. (NASDAQ:GOOG), said during the third quarter earnings call that his firm was pleased with the growth in search, short videos, and cloud services. Pichai highlighted the market opportunity offered by the rapid evolution of products and services in the artificial intelligence domain and urged investors to focus on strides being made in countries like India and Japan. He also touched on the importance of cloud services.

“We see continued growth, with Q3 revenue of $8.4 billion, up 22%. Today, more than 60% of the world’s thousand-largest companies are Google Cloud customers. At Cloud Next, we showcased amazing innovations across our entire portfolio of Infrastructure, Data and AI, Workspace Collaboration, and Cybersecurity solutions. We offer advanced AI-optimized infrastructure to train and serve models at scale, and today, more than half of all funded generative AI startups are Google Cloud customers. This includes AI21 Labs, Contextual, Elemental Cognition, Writer, and more.”

Our Methodology

The companies that feature on the Fortune 500 list were selected for the list and ranked according to hedge fund sentiment. In order to provide readers with some context for their investment choices, the analyst ratings for the stocks are also discussed. Data from around 900 elite hedge funds tracked by Insider Monkey in the third quarter of 2023 was used to identify the number of hedge funds that hold stakes in each firm.

A close-up of a person’s hand holding a printed chart featuring stocks and curves.

Best Fortune 500 Stocks to Buy Now

13. United Parcel Service, Inc. (NYSE:UPS)

Number of Hedge Fund Holders: 47

United Parcel Service, Inc. (NYSE:UPS) provides letter and package delivery services. On November 8, investment advisory Loop Capital maintained a Hold rating on United Parcel Service, Inc. (NYSE:UPS) stock and lowered the price target to $162 from $172.

Among the hedge funds being tracked by Insider Monkey, Chicago-based Citadel Investment Group is a leading shareholder in United Parcel Service, Inc. (NYSE:UPS) with 1.9 million shares worth more than 306 million.

Just like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), United Parcel Service, Inc. (NYSE:UPS) is one of the best Fortune 500 stocks to buy now.

In its Q3 2023 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and United Parcel Service, Inc. (NYSE:UPS) was one of them. Here is what the fund said:

“A higher-for-longer rate mentality taking hold was a headwind for economically sensitive stocks. Rising wages have been one of the main drivers of inflation, and this has proved to be a sticky area, keeping the Fed’s attention and weighing on share prices. For example, United Parcel Service, Inc. (NYSE:UPS) renegotiated a wage increase for its union-backed workforce this summer, which weighed on margins that were already being constricted by slowing volumes. While the new union deal will dampen profits over the next 12 months due to the front-end-loaded nature of the new five-year contract, management gained increased flexibility to deploy automation, which we think should further enhance UPS’s strong competitive position and provide a long-term tailwind to profitability.”

12. AT&T Inc. (NYSE:T)

Number of Hedge Fund Holders: 52

AT&T Inc. (NYSE:T) provides telecommunications, media, and technology services worldwide. On October 21, Citi analyst Michael Rollins maintained a Buy rating on AT&T Inc. (NYSE:T) stock and raised the price target to $18 from $17, appreciating the strong third quarter earnings report of the telecom firm.

At the end of the third quarter of 2023, 52 hedge funds in the database of Insider Monkey held stakes worth $1.7 billion in AT&T Inc. (NYSE:T), compared to 56 in the preceding quarter worth $1.4 billion.

11. CVS Health Corporation (NYSE:CVS)

Number of Hedge Fund Holders: 64

CVS Health Corporation (NYSE:CVS) provides health services in the United States. On December 6, Evercore ISI analyst Elizabeth Anderson maintained an Outperform rating on CVS Health Corporation (NYSE:CVS) stock and raised the price target to $85 from $80, appreciating the new approach to guidance by the healthcare firm.

Among the hedge funds being tracked by Insider Monkey, Connecticut-based investment firm AQR Capital Management is a leading shareholder in CVS Health Corporation (NYSE:CVS) with 4.4 million shares worth more than $307 million.

In its Q3 2023 investor letter, Patient Capital Management, an asset management firm, highlighted a few stocks and CVS Health Corporation (NYSE:CVS) was one of them. Here is what the fund said:

“Our largest new position was CVS Health Corporation (NYSE:CVS). We owned CVS in 2021 through call options, which provided a handsome return. We sold it when it reached our assessment of intrinsic value. In the first half of the year, the stock traded down nearly 40% from its highs. CVS is valued like a pharmacy business in secular decline, while its strategy and assets are far better. CVS owns a healthcare benefits business (Aetna) and a pharmacy-benefits manager (Caremark). It recently acquired Signify Health and Oak Street Health, entering the In-Home Evaluations and primary care spaces enhancing the company’s ability to offer comprehensive healthcare services as we transition to a system more focused on value-based care. Short-term headwinds, such as an unwind from COVID, some unfavorable health care developments and negative headlines from PBM contract losses, weighed on the price. The company is again significantly undervalued, with a trough-level 8.2x P/E multiple well below peers’ 12.2x, with a 3.5% dividend yield. We saw an opportunity to diversify the portfolio with a stable company with a promising strategy and group of assets at an attractive price.”

10. Costco Wholesale Corporation (NASDAQ:COST)

Number of Hedge Fund Holders: 65

Costco Wholesale Corporation (NASDAQ:COST) engages in the operation of membership warehouses. On November 30, DA Davidson analyst Michael Baker maintained a Neutral rating on Costco Wholesale Corporation (NASDAQ:COST) stock with a price target of $570, noting the firm has been an outperformer in the retail space.

Among the hedge funds being tracked by Insider Monkey, Washington-based Fisher Asset Management is a leading shareholder in Costco Wholesale Corporation (NASDAQ:COST) with 2.7 million shares worth more than $1.5 billion.

In its Q3 2023 investor letter, Cooper Investors, an asset management firm, highlighted a few stocks and Costco Wholesale Corporation (NASDAQ:COST) was one of them. Here is what the fund said:

“With the market rally in the first half of 2023 driving double digit returns we took the opportunity early in the quarter to reassess Value Latency embedded in the portfolio. The spotlight was on more highly valued stocks that represent some of our longest held positions and among the better performers over the years. The outcome is that we have exited several long-term positions at what we consider attractive prices, where the balance of Risk Adjusted Value Latency was no longer in our favour.

We remain admirers of these businesses and they remain on our watchlist, but the reality is their appeal is widely recognised today. Management have executed well on earnings growth, but returns have also come from substantial multiple re-ratings that we see as unlikely to reoccur from today’s higher base.

Costco Wholesale Corporation (NASDAQ:COST) was acquired in March 2015 at ~$150 and has more than tripled over its holding period to ~$550 today, delivering a total return with dividends reinvested of ~330% in USD or IRR of 20%. Over the journey the multiple re-rated from 25 times to ~35 times.”

9. The Cigna Group (NYSE:CI)

Number of Hedge Fund Holders: 74

The Cigna Group (NYSE:CI) provides insurance and related products and services in the United States. On December 11, investment advisory Bank of America maintained a Buy rating on The Cigna Group (NYSE:CI) stock with a price target of $370, noting the firm had recently decided to boost a share buyback program by $10 billion.

Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Glenview Capital is a leading shareholder in The Cigna Group (NYSE:CI) with 1.5 million shares worth more than $443 million.

In its Q3 2023 investor letter, Davis Funds, an asset management firm, highlighted a few stocks and The Cigna Group (NYSE:CI) was one of them. Here is what the fund said:

“In the attractive healthcare sector, we look beyond the obvious to identify businesses that simultaneously have exposure to this growth industry and also trade at low prices. We’re especially drawn to companies like Cigna Group, whose products or services play a part in helping to mitigate healthcare’s constantly rising costs. The healthcare industry has been a growing part of the U.S. economy for decades. As a result, many companies in this sector trade at high valuations reflecting their robust but well-known reputation for growth. For value-conscious investors like us, investing in healthcare requires looking beyond the obvious to identify businesses that have exposure to this growth industry but which trade at low prices. Furthermore, recognizing that the constantly rising cost of healthcare cannot go on forever, we have been particularly drawn to companies whose products or services play some role in managing or reducing the cost of care. As a result, we have positions in Cigna Group, a well-regarded provider of managed care.”

8. Exxon Mobil Corporation (NYSE:XOM)

Number of Hedge Fund Holders: 79

Exxon Mobil Corporation (NYSE:XOM) is an integrated oil and gas firm. On November 14, investment advisory Mizuho maintained a Buy rating on Exxon Mobil Corporation (NYSE:XOM) stock and lowered the price target to $133 from $139.

At the end of the third quarter of 2023, 79 hedge funds in the database of Insider Monkey held stakes worth $4.4 billion in Exxon Mobil Corporation (NYSE:XOM), compared to 71 in the previous quarter worth $3 billion.

7. Walmart Inc. (NYSE:WMT)

Number of Hedge Fund Holders: 80

Walmart Inc. (NYSE:WMT) operates as a retail firm. On November 14, investment advisory Jefferies maintained a Buy rating on Walmart Inc. (NYSE:WMT) stock and raised the price target to $195 from $190, noting the updated price target reflected recent trends in value retailers.

Among the hedge funds being tracked by Insider Monkey, Texas-based investment firm Fisher Asset Management is a leading shareholder in Walmart Inc. (NYSE:WMT) with 9.1 million shares worth more than $1.4 billion.

6. UnitedHealth Group Incorporated (NYSE:UNH)

Number of Hedge Fund Holders: 104

UnitedHealth Group Incorporated (NYSE:UNH) operates as a diversified healthcare firm. In late October, investment advisory Mizuho maintained a Buy rating on UnitedHealth Group Incorporated (NYSE:UNH) stock and raised the price target to $584 from $549, backing the firm to achieve long-term guidance goals.

At the end of the third quarter of 2023, 104 hedge funds in the database of Insider Monkey held stakes worth $10.9 billion in UnitedHealth Group Incorporated (NYSE:UNH), compared to 111 in the preceding quarter worth $10.1 billion.

Alongside Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), UnitedHealth Group Incorporated (NYSE:UNH) is one of the best Fortune 500 stocks to buy now.

In its Q3 2023 investor letter, Madison Investments, an asset management firm, highlighted a few stocks and UnitedHealth Group Incorporated (NYSE:UNH) was one of them. Here is what the fund said:

“The top contributors in the quarter were Eli Lilly, Jacobs, Alphabet, Costco, and UnitedHealth Group Incorporated (NYSE:UNH). UnitedHealth responded well to a solid second quarter, with a better medical loss ratio driving the better-than-expected results. Additionally, UNH modestly raised guidance for the full year.

We updated the sustainable scorecard for UnitedHealth Group. The company continues to have Above Average Corporate Governance with a clear policy on separating the roles of the Chair of the Board and the CEO. We also rate the company Above Average on Social factors due to its clear cybersecurity, privacy, and data governance policies. The company continues to diversify its top management positions, where 40% of top management positions are held by women, up from 37% in 2020. We reduced our Environment rating to Average from Above Average as the company has significantly expanded its footprint in the last few years by acquiring local providers. The company is at the beginning of its journey to source renewable electricity for 100% of its operations by 2030.”

Click to continue reading and see 5 Best Fortune 500 Stocks to Buy Now.

AI Fire Sale: Insider Monkey’s #1 AI Stock Pick Is On A Steep Discount

Published on October 30, 2024 at by Inan Dogan, PhD

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By investing in AI, you’re essentially backing the future.

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A New Dawn is Coming to U.S. Stocks

Published on November 16, 2024 at by Insider Monkey Staff

I work for one of the largest independent financial publishers in the world – representing over 1 million people in 148 countries.

We’re independently funding today’s broadcast to address something on the mind of every investor in America right now…

Should I put my money in Artificial Intelligence?

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Click to continue reading…

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