In this article, we will take a look at the 15 best American stocks to buy now. You can skip our comprehensive analysis of these American stocks and go directly to the 5 Best American Stocks to Buy Now.
The U.S. stock market is one of the largest in the world, accounting for 55% of the total world equity market value, followed by Japan with 7.4% and China with 5.4%, according to data from Statista. In 2020, amidst the pandemic, the gross stock cap of publicly traded American companies rose by 20.22%. The total market capitalization of the US stock market is estimated at $49.1 trillion.
The New York Stock Exchange
The New York Stock Exchange (NYSE) is the world’s largest stock exchange with a market capitalization of $26.2 trillion. The NYSE is home to some of the world’s most well-known businesses that make up approximately 82% of the S&P 500 benchmark index. Some of the top companies trading in NYSE are within the healthcare and energy segments. For instance, one of the earliest American pharmaceutical companies worldwide is Pfizer, Inc. (NYSE:PFE). Pfizer, Inc. (NYSE:PFE) started publicly trading in 1942 where the company raised $5.9 million in its IPO. Currently, Pfizer has a market cap of $222.96 billion and offers a dividend yield of 3.92%. Pfizer, Inc.’s (NYSE:PFE) revenue in the first quarter of 2021 came in at $14.58 billion, beating estimates of $13.51 billion.
Another notable stock trading in the New York Stock Exchange (NYSE) is telehealth company American Well Corporation (NYSE:AMWL). The company debuted at $18 per share and raised $742 million in its initial public offering (IPO) in 2020. American Well Corporation (NYSE:AMWL) currently has a market cap of $2.84 billion and revenue in the first quarter of 2021 of $58 million, up 7% from $54 million during the first quarter of 2020.
One of the newest stocks trading in the New York Stock Exchange is primary care startup Oak Street Health, Inc. (NYSE:OSH). The Chicago-based company raised $328 million in its IPO on the New York Stock Exchange, selling 15.6 million shares at $21 per share. Oak Street Health (NYSE:OSH) currently has a market cap of $14.58 billion. Shares of OSH jumped 13% over the last five days.
National Association of Securities Dealers Automated Quotations (NASDAQ)
NASDAQ is the second-largest stock exchange with a market cap of $15 trillion by the end of 2020. The stock exchange is known for tech-heavy giants such as Alphabet Inc. (NASDAQ:GOOGL), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN).
A notable stock trading in NASDAQ is American technology conglomerate Facebook, Inc. (NASDAQ:FB). Facebook, Inc.’s (NASDAQ:FB) initial public offering (IPO) took place in 2012, when the company raised $16 billion by selling 421,233,615 shares for $38 per share. As of May 20, Facebook, Inc.’s (NASDAQ:FB) market cap is $889 billion and revenue in the first quarter of 2021 came in at $26.17 billion, a 48% increase compared to the same quarter of 2020. It is one of the best American stocks to buy for long-term profits.
One of the newest stocks trading in NASDAQ is drug software company Schrodinger, Inc. (NASDAQ:SDGR). Schrodinger, Inc. (NASDAQ:SDGR) raised $232 million in its initial public offering (IPO) held in February 2021. Schrodinger, Inc. (NASDAQ:SDGR) currently has a market cap of $4.47 billion. Schrodinger, Inc. (NASDAQ:SDGR) jumped 7% over the last five days. SDGR is one of the best American stocks to buy for long-term gains.
The American stock market, like the global markets, is going through turbulent times amid the coronavirus crisis, which has also clobbered the hedge fund industry. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, 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 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the 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.
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With this context in mind, here is our list of the 15 best American stocks to buy now. We chose the stocks with strong fundamentals and future growth potential. We also took into account the collective value of stakes in these companies, based on the data compiled by Insider Monkey for over 887 hedge funds.
Best American Stocks to Buy Now
15. Zoom Video Communications, Inc. (NASDAQ:ZM)
Number of Hedge Fund Holders: 59
Total Value of Hedge Fund Holdings: $6.00 Billion
We start our list of the 15 best American stocks to buy now with American communications technology company Zoom Video Communications, Inc. (NASDAQ:ZM). Zoom Video Communications, Inc. operates as one of the largest online chat services worldwide. In April 2019, the company held its initial public offering (IPO) and raised $356.8 million after selling 9.91 million shares. During the COVID-19 pandemic, the company recognized the most significant increase in its user base with over 300 million daily meeting participants, a 2900% increase from December 2019. Earlier this year, the company entered a partnership with SRAX, Inc. (NASDAQ:SREX), a financial technology company, to integrate Zoom with the Sequire Audience. Sequire is a leading investor knowledge and messaging tool that allows businesses to watch their investors’ attitudes.
Zoom Video Communications, Inc. (NASDAQ:ZM) has a market cap of $91.4 billion. The company posted its total revenue of $328.2 million in the first quarter of 2021, up 169% year-over-year. Shares of ZM jumped 76% over the last twelve months. On May 14, Mizuho maintained a Buy rating on Zoom Video Communications, Inc. (NASDAQ:ZM) and lowered the price target to $400.
There were 59 hedge funds that reported owning stakes in Zoom Video Communications, Inc. (NASDAQ:ZM) at the end of the fourth quarter, up from 56 hedge funds during the third quarter.
Baron Opportunity Fund mentioned Zoom Video Communications, Inc. (NASDAQ:ZM) in its Q4 2020 investor letter:
“ Zoom Video Communications, Inc. (NASDAQ:ZM) is a cloud-based software company providing a video-first platform for communication. Shares of Zoom declined during the fourth quarter on profit taking following the strong run in the stock because of accelerated pandemic-driven Zoom adoption, revenue growth, and free cash flow generation. We retain conviction as Zoom remains a leading player in disrupting the $100 billion unified communications market with its scalable, globally distributed, cloud-based, video-first offering, while its well-known brand (Zoom is now a verb!) should enable it to grow profitably as it takes market share.”
14. American Express Company (NYSE:AXP)
Number of Hedge Fund Holders: 60
Total Value of Hedge Fund Holdings: $21.8 Billion
American Express Company (NYSE:AXP) ranks 14th on the list of 15 best American stocks to buy now. The New York-based multinational financial services corporation has over 114 million cardholders and operates in over 40 countries. The company was founded in 1850 and held its IPO in 1977. In 2020, the company acquired Kabbage, an online financial technology company. The acquisition allowed American Express to provide small companies in the United States with a simple and effective way to handle their payments and cash flow online.
American Express Company’s (NYSE:AXP) net income in the first quarter of 2021 came in at $2.2 billion, an increase from $367 million during the same period in 2020. Shares of AXP surged 70% over the last twelve months. In April, Deutsche Bank maintained a Buy rating on American Express and raised the price target to $158.
There were 60 hedge funds that reported owning stakes in American Express Company’s (NYSE:AXP) at the end of the fourth quarter, up from 48 funds a quarter earlier. The total value of these stakes at the end of Q4 is $21.8 billion.
Bretton Fund mentioned American Express Company’s (NYSE:AXP) in its Q4 2020 investor letter:
“American Express Company (NYSE:AXP) has elements of both a bank (it extends credit card loans) and a payments processor (most of its revenue is fees from cardholders and merchants) and was hit pretty hard by Covid-19, though we expect most of the impact will be transitory. It has a relatively diversified customer base overall, but a meaningful portion of its card activity is from business travel, which…there wasn’t a lot of last year. Similar to the banks, American Express recognized loan losses in anticipation of large defaults, though it’s not clear all of that will come to pass. Its stock returned -1.1%, while earnings per share were down 53%.”
13. Starbucks Corporation (NASDAQ:SBUX)
Number of Hedge Fund Holders: 67
Total Value of Hedge Fund Holdings: $4.99 Billion
Ranking 13th in our list of the 15 best American stocks to buy now is Starbucks Corporation (NASDAQ:SBUX), a multinational coffeehouse and roastery company that has over 32,000 locations worldwide. In the United States alone, the company operates over 8,900 stores and 6,300 licensed stores. The company went public in 1992 for $17 and closed the trading day at $21. In 2019, the corporation opened the world’s largest Starbucks location. The Starbucks Reserve Roastery is a five-story, 35,000-square-foot structure in Chicago.
Starbucks Corporation (NASDAQ:SBUX) has a market cap of $129.2 billion. Starbucks Corporation’s net revenue in the first quarter of 2021 came in at $4.7 billion, a 6% decrease from the same period in 2020. The decrease was primarily a result of reduced retail sales and royalties from the company’s licensees as a result of the COVID-19 pandemic. Shares of Starbucks Corporation (NASDAQ:SBUX) surged 41% over the past twelve months. In April, Jefferies maintained a Buy rating on Starbucks and raised the price target to $135.
There were 67 hedge funds that reported owning stakes in Starbucks Corporation (NASDAQ:SBUX) at the end of the fourth quarter. The total value of these stakes at the end of Q4 is $4.99 billion.
Wedgewood Partners mentioned Starbucks Corporation (NASDAQ:SBUX) in its Q1 2021 investor letter:
“As we have observed Starbucks through the unpredictable events of the past year, we believe all the things we liked about the Company’s competitive position before the pandemic have been turbocharged by the pandemic. We always have maintained the Company had no serious competition, anyway, and that in both large growth markets (U.S. and China), there was enormous fragmentation of share that would allow the Company to continue to expand through market expansion (especially in China) and through share gain versus small competitors. In fact, when we last discussed Starbucks, there was a lot of noise about competition in China from a newly established domestic competitor, Luckin Coffee, and that situation quickly dissolved into farce. In any case, had Luckin been a legitimate business, we had maintained that China was a massive market – and one in which coffee consumption was massively underpenetrated in comparison to other markets. We believed too that there was plenty of room for multiple large competitors to exploit.
The pandemic disaster over the past year truly highlights the Company’s financial strength in comparison to its small competitors, most of which struggled to survive, and many of which didn’t make it. While there is no perfect data, we have seen estimates from industry groups and restaurant distributors that as many as 15-20% of small, independent restaurants across the broad food and beverage industry may have closed permanently as a result of the pandemic, sadly. Starbucks not only survived due to its superior financial position; they also used its financial resources to invest in a variety of expanded or new capabilities, including the addition of drive-through capacity, new “walk-through” pick-up locations in urban areas, increased investment in technology to drive speed within the stores and drive-through lanes, and expansion of its loyalty program. These could have been viewed, prior to the pandemic, as a fairly big advantage in terms of convenience alone versus the Company’s small primary competitors. In the age of the pandemic, though, one might consider something like a drive-through an absolute necessity, as customers choose not to expose themselves to the interior of restaurants or to other people.
Another sign of Starbucks Corporation (NASDAQ:SBUX)’s superior financial strength has been the continued expansion of the store base, even in the face of the pandemic. As of the end of the Company’s last fiscal year, September 2020, Starbucks had opened +4% more stores, including +13% growth in China. Additionally, Starbucks not only opened stores as competing stores folded; the Company is seeing more attractive lease terms on new stores (and on existing stores, for that matter), meaning that a store opening program that already had generated attractive financial returns will now generate even more attractive returns.
Short-term results, of course, have been quite poor all over the world, with some portion of the Company’s locations closed or operating on reduced hours for the last several quarters. Customers are simply reticent to show up even when stores have been open. We expect shorter-term results to remain unpredictable, as they will be tied to the ebb and flow of various COVID-related lockdowns around the world. However, Starbucks said it expected sales at established locations in both the U.S. and China to rebound to pre-pandemic levels in the March quarter that just ended. In addition, despite reduced operating hours still, and despite customers’ work and school routines being completely disrupted, a surprisingly early development in comparison to what we, at least, expected only a few quarters ago, is proof of the Company’s entrenched position in its customers’ lives. In contrast, the National Restaurant Association in the U.S. recently predicted that 2021 industry sales would recover significantly versus 2020, but would still come in nearly (-15%) below 2019 levels.
On the Company’s most recent Analyst Day in December 2020, management took its longerterm expectations a bit higher, primarily driven by a modest expected improvement in sales versus its prior expectations. Considering smaller competitors went belly-up and the Company’s investments in enhanced capabilities further improved its competitive position, we believe this improvement in longer-term sales trends is a layup. We also believe the technological investments and the improved terms from landlords create obvious benefits for to an already attractive margin and return profile. Our bullishness on the Company has not wavered and, in fact, we feel better than we did about the Company’s business model over the next several years than we did when we bought the stock originally.”
12. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 68
Total Value of Hedge Fund Holdings: $12.3 Billion
California-based electric vehicle and clean energy company Tesla, Inc. (NASDAQ:TSLA) ranks 12th on 15 best American stocks to buy now. The company was founded in 2003 and sold over 500,000 electric vehicle units in 2020. Tesla, Inc. made its debut in the stock market in 2010 for $17 where the company sold 13.3 million shares of common stock. Tesla, Inc. (NASDAQ:TSLA) is one of the best American stocks that proved itself during the pandemic where Tesla, Inc. reached a new high of $8.7 billion in sales in the three months ending in September. One of the latest acquisitions of Tesla, Inc. was in 2019. The company acquired DeepScale, a startup technology company, to improve the company’s driver assistance system.
Tesla, Inc. (NASDAQ:TSLA) has a market cap of $542.7 billion. The company’s revenue in the first quarter of 2021 came in at $10.39 billion, a 74% increase compared to the same period in 2020. In April, Canaccord Genuity upgraded Tesla, Inc. (NASDAQ:TSLA) to a Buy rating and raised the price target to $1071.
Like Alphabet Inc. (NASDAQ:GOOGL), Microsoft Corporation (NASDAQ:MSFT) and Amazon.com, Inc. (NASDAQ:AMZN), Tesla, Inc. (NASDAQ:TSLA) is one the best American stocks to buy now.
There were 68 hedge funds that reported owning stakes in Tesla, Inc. (NASDAQ:TSLA) at the end of the fourth quarter. The total value of these stakes at the end of Q4 is $12.3 billion.
Baron Fund mentioned Tesla, Inc. (NASDAQ:TSLA) in its Q1 2021 investor letter:
“Tesla, Inc. designs, manufactures, and sells fully electric vehicles, solar products, energy storage solutions, and battery cells. The stock fell during the quarter as a result of general market dynamics and a potential production slowdown due to parts shortages. A refreshed S/X and China Model Y ramp could also have a negative impact on margins in early 2021. We anticipate strong growth and improved margins driven by new production capacity, manufacturing efficiencies, localization of its manufacturing and supply chain, and maturation of Tesla’s full self-driving technology.”
11. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 70
Total Value of Hedge Fund Holdings: $6.19 Billion
Arkansas-based Walmart Inc. (NYSE:WMT) ranks 11th in our list of the 15 best American stocks to buy now. Walmart Inc. operates a chain of hypermarkets, discount department stores, and grocery stores. Walmart, Inc. has over 10,500 stores worldwide. Walmart Inc. (NYSE:WMT) first went public in 1972 where the company offered 300,000 shares at $16.50 per share. Earlier this month, the company announced plans of acquiring Zeekit, a virtual fitting platform, to allow users to virtually try on products from the retailer’s range of national and private brands.
Walmart Inc. (NYSE:WMT) has a market cap of $399 billion. The company’s revenue in the first quarter of 2021 came in at $138.3 billion, a 2.7% increase year-over-year. On May 19, Citigroup maintained a Buy rating on Walmart and raised the price target to $179.
There were 70 hedge funds that reported owning stakes in Walmart Inc. (NYSE:WMT) at the end of the fourth quarter, up from 69 funds a quarter earlier. The total value of these stakes at the end of Q4 is $6.19 billion.
10. The Home Depot, Inc. (NYSE:HD)
Number of Hedge Fund Holders: 79
Total Value of Hedge Fund Holdings: $4.92 Billion
Ranking 10th in our list of the 15 best American stocks to buy now is The Home Depot, Inc. (NYSE:HD). The Georgia-based home improvement retailer has over 2,200 stores in the US, Canada, and Mexico. The company went public in 1981 at $12 per share. The Home Depot, Inc. (NYSE:HD) is one of the best American stocks to buy now that grew during the COVID-19 pandemic. As enforced lockdown was implemented, sales from do-it-yourself (DIY) such as painting and gardening increased 23.4% in the quarter that ended in August 2020. The company forecasts the increase for supplies to continue growing through 2021 with the rise of the housing market. In 2020, the company purchased HD Supply, an industrial distributor in North America, to place Home Depot on top in a highly fragmented MRO industry.
The Home Depot, Inc. (NYSE:HD) has a market cap of $338.1 billion and sales in the first quarter of 2021 of $37.5 billion, an increase of $9.2 billion from the first quarter of 2020. On May 19, Piper Sandler maintained a Neutral rating on Home Depot and raised its price target to $310.
There were 79 hedge funds that reported owning stakes in The Home Depot, Inc. (NYSE:HD) at the end of the fourth quarter, up from 73 funds a quarter earlier. The total value of these stakes at the end of Q4 is $4.92 billion.
Ensemble Capital mentioned The Home Depot, Inc. (NYSE:HD) in its Q1 2021 investor letter:
“Notable contributors to the Fund’s returns this quarter (included) Home Depot. Home Depot (8.9% weight in the Fund) continued to benefit from a red-hot housing and home improvement market, delivering record financial performance in 2020. As a high return on invested capital business, any step-up in growth results in considerable shareholder value creation. While 2021 comparable sales may not yield impressive headline results, we believe there are several secular tailwinds supporting continued housing investment, including millennials entering prime household formation/peak earnings years, relatively low interest rates, and government policies.
Home Depot (8.9% weight in the Fund): The big orange sign of Home Depot is a familiar sight for homeowners across the country. Despite the rise of Amazon, Home Depot has generated outstanding results for shareholders during the rise of eCommerce, even as The Home Depot, Inc. (NYSE:HD)’s end market in housing suffered the worst collapse in a century. Over the last fifteen years, a period which began at the peak of the housing bubble, Home Depot’s stock has generated annual returns of 17% a year, outperforming the S&P 500 by approximately 7% a year.
But while homeowners can attest to their continued shopping at Home Depot, they may not be aware that only about half the company is dedicated to serving Do It Yourself homeowners, with the other half……..(read the complete letter here).
9. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 88
Total Value of Hedge Fund Holdings: $8.69 Billion
California-based multinational technology company NVIDIA Corporation (NASDAQ:NVDA) ranks 9th in our list of 15 best American stocks to buy now. The company was founded in 1993 and first went public in 1999 with a share price of $19.69. During the COVID-19 pandemic, the demand for computer games and remote computing services rose with more people forced to stay at home. The rise was evident with NVIDIA sales climbing as much as 39% during the first quarter of 2020 compared to the same period of 2019. In 2020, the company announced plans to acquire Arm Holdings for $40 billion. The acquisition will incorporate the company into the AI world.
NVIDIA Corporation (NASDAQ:NVDA) has a market cap of $350.1 billion and currently offers a dividend yield of 0.11%. The company’s first-quarter 2021 revenue came in at $3.08 billion, up 27.9% compared to the first quarter of 2020. Shares of NVDA increased 56% over the past twelve months.
There were 88 hedge funds that reported owning stakes in NVIDIA Corporation (NASDAQ:NVDA) at the end of the fourth quarter, up from 82 funds a quarter earlier. The total value of these stakes at the end of Q4 is $8.69 billion. Like Pfizer, Inc. (NYSE:PFE), Facebook, Inc. (NASDAQ:FB), Tesla, Inc. (NASDAQ:TSLA) and Amazon.com, Inc. (NASDAQ:AMZN), NVIDIA is one the best American stocks to buy now.
Mairs & Power mentioned NVIDIA Corporation (NASDAQ:NVDA) in its Q4 2020 investor letter:
“The Fund’s biggest relative contributor in 2020 was Nvidia (NVDA). Nvidia specializes in graphics cards for computers, and it has benefited from updated chipsas well as strong market positions in applications and machine learning.”
8. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders: 99
Total Value of Hedge Fund Holdings: $35.3 Billion
Ranking 8th in our list of 15 best American stocks to buy now is Bank of America Corporation (NYSE:BAC). The multinational investment bank offers services such as checking, savings, auto loans, home loans, among others. During the COVID-19 pandemic, Bank of America Corporation was able to withstand the economic downfall with their digital assistant, Erica. Bank of America Corporation (NYSE:BAC) saw a 67% boost in its digital platform user base. Earlier this year, the company purchased Axia Technologies, Inc., healthcare financial technology, to expand their services to healthcare clients.
Bank of America Corporation (NYSE:BAC) has a market cap of $359 billion. In 2020, Bank of America Corporation (NYSE:BAC)’s revenue came in at $22.8 billion, a 0.2% increase from the same period in 2020. Shares of BAC rose 83% over the past twelve months. On May 4, Baird downgraded Bank of America Corporation (NYSE:BAC) from Outperform to Neutral with a price target of $42.00.
There were 99 hedge funds that reported owning stakes in Bank of America Corporation (NYSE:BAC) at the end of the fourth quarter, up from 88 funds a quarter earlier. The total value of these stakes at the end of Q4 is $35.3 billion
7. Netflix, Inc. (NASDAQ:NFLX)
Number of Hedge Fund Holders: 116
Total Value of Hedge Fund Holdings: $15.6 Billion
Ranking 7th in our list of 15 best American stocks to buy now is Netflix, Inc. (NASDAQ:NFLX). The California-based content platform and production company Netflix, Inc. was founded in 1997 and has grown its customer base to over 207.64 million paying subscribers. The company first went public in 2002 with an IPO price of $15 per share. In 2020, the video-sharing app TikTok approached the company to acquire its US operations. However, Netflix, Inc. (NASDAQ:NFLX) declined the offer. One of the company’s most recent acquisitions was StoryBoths, a kid’s brand, to create more kid-friendly content.
Netflix, Inc. (NASDAQ:NFLX) has a market cap of $216.2 billion. Netflix, Inc.’s revenue in the first quarter of 2021 came in at $7.16 billion, up from $5.8 billion during the same quarter of 2020. Shares of NFLX jumped 8% over the past twelve months. In April, Cowen & Co. maintained an Outperform rating on Netflix and lowered the price target to $650.
There were 116 hedge funds that reported owning stakes in Netflix, Inc. (NASDAQ:NFLX) at the end of the fourth quarter. The total value of these stakes at the end of Q4 is $15.6 billion. Like Bank of America Corporation (NYSE:BAC), Alphabet Inc. (NASDAQ:GOOGL), Tesla, Inc. (NASDAQ:TSLA) and Amazon.com, Inc. (NASDAQ:AMZN), Netflix is one the best American stocks to buy now.
Polen Capital mentioned Netflix, Inc. (NASDAQ:NFLX) in its Q1 2021 investor letter:
“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.”
6. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders: 144
Total Value of Hedge Fund Holdings: $16.4 Billion
Ranking 6th on the 15 best American stocks to buy now is Walt Disney Company (NYSE:DIS). The California-based multinational mass media and entertainment conglomerate operates in over 45 countries worldwide. The company first went public in 1957 at a share price of $13.88. The COVID-19 pandemic was an unfortunate event that led to a $2.4 billion loss in the company’s operating income from Disney parks. However, during the first quarter of 2021, the company saw a boost in theme park visitors and forecasts that Disney parks can return to pre-pandemic levels by 2022, a year earlier than anticipated.
Walt Disney Company (NYSE:DIS) has a market cap of $307 billion. The company’s net profit came in at $912 million in the second quarter of 2021, up from $468 million during the second quarter of 2020. Shares of DIS surged 43% over the last twelve months.
Like Bank of America Corporation (NYSE:BAC), Alphabet Inc. (NASDAQ:GOOGL), Microsoft Corporation (NASDAQ:MSFT) and Amazon.com, Inc. (NASDAQ:AMZN), Walt Disney Company (NYSE:DIS) is one the best American stocks to buy now.
There were 144 hedge funds that reported owning stakes in Walt Disney Company (NYSE:DIS) at the end of the fourth quarter, up from 112 funds a quarter earlier. The total value of these stakes at the end of Q4 is $16.4 billion.
Harding Loevner mentioned Walt Disney Company (NYSE:DIS) in its Q4 2020 investor letter:
“One of the original constituents of the Nifty Fifty holds a place in our portfolio today. When we bought Disney three years ago, we wrote that “we view Disney theme parks in the US, Europe, and China as resistant to online substitution.” We did not reckon on a pandemic, which closed all of them, and sent all of usto our couches. Disney, however, wasready for us, brilliantly illustrating the importance of management foresight and change management. Or, as Louis Pasteur said, “chance favors the prepared mind.”
A century after its founding in 1923, Walt Disney Company (NYSE:DIS) is in the middle of a bold shift from its legacy media networks & entertainment model—with cable TV, theme parks, and theater films dominating its earnings—to a direct-to-consumer streaming media model. The keys to Disney’s transition: matchless storytelling, coupled with financial strength. The company reliably creates content that people all over the world are eager to consume. It also hastened spending on original content to attract subscribers to its new streaming platform. These factors have allowed Walt Disney Company (NYSE:DIS) to weather the pandemic having expanded its direct engagement with customers. Such connections yield a rich harvest of insights used to customize offerings on a mass scale, reinforcing that engagement in a virtuous circle and thereby raising the lifetime value of each customer. Subscribers to Disney+ reached 86.8 million one year after launch, compared to the 60 – 90 million management projected to reach in 2024. To be sure, Netflix, Apple, and Amazon remain formidable competitors in new-era streaming entertainment (mind what we said about everyone standing up at once), but there’s fight left in this old dog.”
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Disclosure: None. 15 Best American Stocks To Buy Now is originally published on Insider Monkey.
