In this article, we discuss 15 best stocks to invest in right now. If you want to see some more stocks in this list, click 5 Best Stocks To Invest In Right Now.
According to a Bloomberg report dated August 24, the Goldman Sachs Group noted that elite hedge funds are strengthening their stakes in US mega-cap tech stocks and the market sentiment is similar to the levels observed at the beginning of the pandemic. Goldman’s Ben Snider said that hedge funds raised their tech and consumer discretionary holdings, while slashing bets on energy and materials stocks. Most hedge funds held concentrated portfolios, and average weightings of top 10 holdings represented about 70% of the total investments in the quarter ended June, the highest concentration observed since the first quarter of 2020. The Goldman team wrote in a note dated late-August:
“Stymied by an uncertain market environment and poor recent returns, hedge funds have cut leverage, shifted back towards growth, and increased portfolio concentrations.”
After playing defensive positions for much of 2022, hedge funds are now navigating the market with intense equity bets, taking up both short and long positions. In early September, Goldman Sachs reiterated that hedge funds have boosted exposure to equities in the past few weeks, raising short sales via macro products like index futures, as well as buying individual stocks. Morgan Stanley noted similar investing patterns, and reported that hedge funds were bullish on tech and healthcare equities, while shorting exchange traded funds. Although money managers are exceedingly keen to load up on discounted stocks, they are monitoring the market direction carefully.
There is speculation that rules-based hedge funds will likely sell billions worth of stocks in the coming weeks. Goldman analyst Vincent Lin wrote that the latest hedge fund moves suggest higher willingness to “play offense in micro/idiosyncratic situations while hedging beta risk using ETFs/index instruments”. Hedge funds were largely bullish on Alphabet Inc. (NASDAQ:GOOG), Visa Inc. (NYSE:V), and Meta Platforms, Inc. (NASDAQ:META) at the end of the second quarter of 2022.
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Our Methodology
For our list of the 15 best stocks to invest in right now, we used Insider Monkey’s database of about 900 elite hedge funds. The stocks in this article are popular among these funds as of the end of the second quarter of 2022. Elite funds pour in billions of dollars and use some of the best brains to select stocks for their clients. Insider Monkey believes imitating their portfolio picks is a wise strategy.
Best Stocks To Invest In Right Now
15. ServiceNow, Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 99
ServiceNow, Inc. (NYSE:NOW) is a California-based company that offers cloud computing solutions to enterprises worldwide. The company specializes in workflow automation, artificial intelligence, machine learning, robotic process automation, and performance analytics, among other tech services. According to the second quarter database of Insider Monkey, 99 hedge funds were bullish on ServiceNow, Inc. (NYSE:NOW) with combined stakes worth $5.2 billion, up from 90 funds in the prior quarter worth $7.5 billion.
Guggenheim analyst John DiFucci on August 11 initiated coverage of ServiceNow, Inc. (NYSE:NOW) with a Neutral rating and a $510 price target. Despite being “a very well-run company”, ServiceNow, Inc. (NYSE:NOW) will potentially fail to meet its long-term subscription revenue targets in 2024 and 2026, the analyst contended.
Among the hedge funds tracked by Insider Monkey, Ken Fisher’s Fisher Asset Management featured as the leading position holder in the company, with 1.45 million shares worth $693.8 million.
In addition to Alphabet Inc. (NASDAQ:GOOG), Visa Inc. (NYSE:V), and Meta Platforms, Inc. (NASDAQ:META), ServiceNow, Inc. (NYSE:NOW) is one of the best stocks to invest in right now according to smart investors.
Ensemble Capital recently published its Q2 2022 investor letter. Here is what the fund specifically said about ServiceNow, Inc. (NYSE:NOW):
“ServiceNow is an enterprise software company that helps their corporate customers integrate all of their various software products into a unified platform. Their products are a key element of driving the digital transformation nearly every large company is undergoing. At the recent JP Morgan investor day, CEO Jamie Dimon explained that while the company could reduce expenses if needed should the economy slow, that their spending on digital transformation would continue as this spending was critical to the company managing costs and maximizing revenue over time. As an example of this type of spending, Dimon specifically pointed to ServiceNow, calling out that the company’s products now oversaw the single largest collection of JP Morgan data and highlighted that working with them had saved JP Morgan $50 million over the past few years.
While we have high expectations for ServiceNow’s long-term growth rate, at the company’s investor day in late May they offered an increased growth outlook for the next five years as they target even higher levels of growth than we have been expecting.”
14. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders: 99
Bank of America Corporation (NYSE:BAC) is an American multinational investment bank and financial services holding company, catering to individuals, small and mid-sized businesses, institutional investors, and governments worldwide. On September 12, Bank of America Corporation (NYSE:BAC) announced a new wealth management banking and lending group with 3,500 employees, which will be led by April Schneider, who priorly managed $4.5 billion across the firm’s real estate portfolio.
On September 12, Deutsche Bank analyst Matt O’Connor reaffirmed a Buy rating on Bank of America Corporation (NYSE:BAC) but lowered the price target on the shares to $45 from $51. The banks have underperformed this year mainly due to recession fears, although there has been some relief over the last few weeks, the analyst told investors.
According to Insider Monkey’s data, Bank of America Corporation (NYSE:BAC) was part of 99 hedge fund portfolios at the end of Q2 2022, with collective stakes worth about $36 billion. Warren Buffett’s Berkshire Hathaway is the leading stakeholder of the company, with more than 1 billion shares valued at $31.4 billion.
Here is what ClearBridge Dividend Strategy has to say about Bank of America Corporation (NYSE:BAC) in its Q2 2022 investor letter:
“In the second quarter we made a sizable add to our position in Bank of America (NYSE:BAC) as our bank holdings have significant leverage to rising interest rates. The Fed, unfortunately, was late to realize inflation’s magnitude, maintaining for far too long that inflationary pressures were merely transitory. This mistake caused inflation to accelerate, necessitating a larger intervention than if the Fed had moved sooner.”
13. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 104
JPMorgan Chase & Co. (NYSE:JPM) is a New York-based financial services company that operates through Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking, and Asset & Wealth Management segments. On September 12, JPMorgan Chase & Co. (NYSE:JPM) announced that it is acquiring California-based payments startup, Renovite, to fasten its ability to deliver new offerings to merchants.
On September 12, Deutsche Bank analyst Matt O’Connor assigned a Buy rating to JPMorgan Chase & Co. (NYSE:JPM) but slashed the price target on the stock to $155 from $174. Although banks have underperformed due to recession fears, the analyst said:
“Assuming this, one could argue banks are in no man’s land in the near term. However, this also implies good upside longer term to the group if (a big IF) the US avoids a meaningful downturn”.
According to Insider Monkey’s Q2 data, 104 hedge funds were bullish on JPMorgan Chase & Co. (NYSE:JPM), with collective stakes worth $5.80 billion, compared to 110 funds the prior quarter worth $5.05 billion. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is one of the leading stakeholders of the company, with 7.6 million shares valued at $854.3 million.
Carillon Tower Advisers shared its stance on JPMorgan Chase & Co. (NYSE:JPM) in its Q1 2022 investor letter. Here’s what the firm said:
“More cyclical sectors, including technology and consumer discretionary, were among the weakest, likely due to rising interest rates and inflation. It was encouraging to see the quarter finish on a strong note with the S&P 500 only about 5% away from its all-time highs. Shares of JPMorgan Chase (NYSE:JPM) detracted from performance due to the company’s increased expense guidance, announced in January.”
12. Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Holders: 106
Alibaba Group Holding Limited (NYSE:BABA) is a Chinese company that specializes in technology infrastructure and e-commerce. The company is focused on cost optimization and it has amassed positive results. Alibaba Cloud indicates strength from the non-internet segment and the company continues to focus on cloud investments, which will drive long-term growth and help retain its market leadership.
On August 8, Deutsche Bank analyst Leo Chiang raised the price target on Alibaba Group Holding Limited (NYSE:BABA) to $160 from $155 and maintained a Buy rating on the shares. The company’s June quarter net income exceeded Street consensus and adjusted net margins were also ahead of expectations, mainly driven by a faster than anticipated narrowing of losses in new initiatives, the analyst told investors in a research note. He sees the present valuation as “defensive” and said a quicker than expected macro rebound could result in upside potential.
Among the hedge funds tracked by Insider Monkey, Rajiv Jain’s GQG Partners is a notable position holder in Alibaba Group Holding Limited (NYSE:BABA), with approximately 12 million shares worth $1.36 billion. Overall, 106 hedge funds were long Alibaba Group Holding Limited (NYSE:BABA) at the end of June 2022, up from 100 funds in the earlier quarter.
Here is what Baron Funds specifically said about Alibaba Group Holding Limited (NYSE:BABA) in its Q2 2022 investor letter:
“Alibaba Group Holding Limited (NYSE:BABA) is the largest retailer and e-commerce company in China. Alibaba operates shopping platforms Taobao and Tmall and owns 33% of Ant Group, which operates Alipay, China’s largest third party online payment provider. Shares of Alibaba rose during the quarter, driven by an increasing focus on improving capital allocation, an improving regulatory environment, and government stimulus targeting Chinese consumers. We retain conviction that Alibaba will benefit from rapid growth in cloud services, logistics, and retail.”
11. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders: 109
The Walt Disney Company (NYSE:DIS) is an American multinational mass media and entertainment company. On August 10, The Walt Disney Company (NYSE:DIS) disclosed fiscal Q3 earnings, where it outperformed expectations on the top and bottom line and surprised to the upside on Disney+ subscribers. The results were driven primarily by a spike in the company’s Parks segment.
On August 11, Credit Suisse analyst Douglas Mitchelson maintained an Outperform rating on The Walt Disney Company (NYSE:DIS) and lowered the price target on the shares to $157 from $170, following quarterly results and the lower streaming value.
Among the hedge funds tracked by Insider Monkey, 109 funds reported owning stakes worth about $3.2 billion in The Walt Disney Company (NYSE:DIS), compared to 113 funds in the last quarter worth $5.16 billion. Boykin Curry’s Eagle Capital Management is a notable position holder in the company, with roughly 3.5 million shares valued at $327.5 million.
Like Alphabet Inc. (NASDAQ:GOOG), Visa Inc. (NYSE:V), and Meta Platforms, Inc. (NASDAQ:META), The Walt Disney Company (NYSE:DIS) is one of the best stocks to invest in right now according to elite hedge funds.
Here is what Oakmark Fund has to say about The Walt Disney Company (NYSE:DIS) in its Q2 2022 investor letter:
“Disney (NYSE:DIS) is one of the most beloved consumer companies in the world. Its media business has a rich library of intellectual property, which provides a powerful engine for creating new content across the Disney, Pixar, Marvel, and Star Wars brands. This content also contributes to the success of Disney’s theme parks, which generated nearly half the company’s earnings and grew more than 10% annually in the decade prior to the pandemic. Shares have fallen nearly 50% over the past year as investors worried about the company’s ability to transition its media business to a direct-to-consumer streaming world. This transition has required management to make investments in its Disney+ streaming service that are depressing profitability today. However, we believe these investments will ultimately produce attractive returns as Disney+ continues to grow subscribers and increase pricing over time. As a result, we were able to purchase shares at a substantial discount to our estimate of intrinsic value.”
10. Berkshire Hathaway Inc. (NYSE:BRK-B)
Number of Hedge Fund Holders: 109
Berkshire Hathaway Inc. (NYSE:BRK-B) is an American company that is involved in the insurance, freight rail transportation, and utility businesses worldwide. On September 9, regulatory filings revealed that Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK-B) has accumulated a 20.2% stake in Occidental Petroleum Corporation (NYSE:OXY). There is speculation in the market that the billionaire investor may consider bidding for the entire company.
Among the hedge funds tracked by Insider Monkey, Berkshire Hathaway Inc. (NYSE:BRK-B) was found in 109 public stock portfolios at the end of Q2 2022, compared to 104 funds in the last quarter. Michael Larson’s Bill & Melinda Gates Foundation Trust is the largest stakeholder of the company, with 34.6 million shares worth $9.5 billion.
Here is what Weitz Investment Management has to say about Berkshire Hathaway Inc. (NYSE:BRK-B) in its Q1 2022 investor letter:
“The quarter’s standout performers were a pair of insurers, Berkshire Hathaway (BRK-A, BRK-B). Insurers typically benefit from a strong economy, as pricing tends to improve and the volume of risk to be insured grows. We also expect higher interest rates to translate into higher investment income as insurers recycle premium “float” into higher-yielding securities. Berkshire possesses terrific management and top marks as an opportunistic capital allocator.”
9. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 116
Salesforce, Inc. (NYSE:CRM) is a California-based company that provides customer relationship management technology. The company has “revised” its full-year revenue outlook to between $30.9 billion and $31 billion, down from a prior forecast of $31.7 billion to $31.8 billion. The management cited the strong U.S. dollar, noting that foreign currency exchange “headwinds” are likely to have an $800 million impact on the company’s full-year sales.
Guggenheim analyst John DiFucci on September 2 upgraded Salesforce, Inc. (NYSE:CRM) to Neutral from Sell with a price target of $150, noting that the stock has plummeted 20% since he assumed coverage on August 11, while the S&P 500 has slid 7% over the same period. While he maintains the view that Salesforce, Inc. (NYSE:CRM)’s new ACV has been “more modest than most investors realize” and that it has relied on mergers and acquisitions to “prop up revenue growth,” he advised “don’t overstay your welcome” in the title of his note to investors.
According to Insider Monkey’s data, 116 hedge funds were long Salesforce, Inc. (NYSE:CRM) at the end of June 2022, compared to 114 funds in the preceding quarter. Harris Associates is a notable stakeholder in the company, with 5 million shares worth $829 million.
Here is what Vulcan Value Partners has to say about Salesforce, Inc. (NYSE:CRM) in its Q1 2022 investor letter:
“Salesforce.com Inc. is the dominant provider of customer relationship management software and technology. Salesforce has high retention rates, pricing power, high free cash flow, and a competitive moat. The company continues to execute well. Margins decreased slightly during the fourth quarter but continue to be on path for material expansion over the long term. Salesforce is seeing increased spending as employees are returning to the office, and we believe the global pandemic has only improved its prospects.”
8. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 128
Apple Inc. (NASDAQ:AAPL) is one of the best stocks to invest in according to hedge funds. Apple Inc. (NASDAQ:AAPL) was among the most prominent big-tech gainers on September 14, up 1.6% after Morgan Stanley reported that the iPhone 14 cycle is stronger than anticipated, observing relative lead times and early data from China. The investment firm noted that early adoption is a “bit stronger than we expected” and “early pre-order commentary from markets such as China and India is similarly robust”.
Bernstein analyst Toni Sacconaghi told investors on September 14 that despite the rise of services, iPhone is a primary driver of Apple Inc. (NASDAQ:AAPL)’s financials, accounting for about 50% of total revenue and gross profit. The analyst predicted total revenue growth of 1% to $399 billion in 2023 and an EPS of $6.26, and maintained a Market Perform rating and a price target of $170 on the shares.
According to Insider Monkey’s Q2 data, Apple Inc. (NASDAQ:AAPL) was part of 128 hedge fund portfolios, compared to 131 funds in the earlier quarter. Warren Buffett’s Berkshire Hathaway is the largest position holder in Apple Inc. (NASDAQ:AAPL), with approximately 895 million shares worth $122.3 billion.
Here is what Alger Capital specifically said about Apple Inc. (NASDAQ:AAPL) in its second quarter investor letter:
“Apple Inc. (NASDAQ:AAPL) is a leading technology provider in telecommunications. computing and services. Apple’s iOS operating system is the company’s unique intellectual property and competitive strength. This software drives extremely tight engagement with consumers and enterprises. The engagement is fostering the growing purchase of high-margin services like music, apps, and apple pay. Apple’s shares detracted from performance as management lowered its guidance for the second quarter due to headwinds from the war in Ukraine, adverse foreign currency shifts, and dampened consumer demand associated with the coronavirus in China. Additionally, many investors were concerned that lockdowns implemented to curtail the spread of COVID-19 would impact production of apple products, however the manufacturing facilities have resumed activity.”
7. Uber Technologies, Inc. (NYSE:UBER)
Number of Hedge Fund Holders: 129
Uber Technologies, Inc. (NYSE:UBER) is a California-based mobility technology company operating in the United States, Canada, Latin America, Europe, the Middle East, Africa, and the Asia Pacific. There have been some latest developments at the company, such as Uber Eats inking a 10-year agreement with Nuro on autonomous food delivery.
On August 23, Wolfe Research analyst Deepak Mathivanan said that Uber Technologies, Inc. (NYSE:UBER) remains a top idea in mobility for the second half of 2022, given its “significant runway” for profitability and free cash flow growth in the second half of the year and 2023. The analyst kept an Outperform rating on Uber Technologies, Inc. (NYSE:UBER) with a $37 price target.
According to the second quarter database of Insider Monkey, 129 hedge funds were bullish on Uber Technologies, Inc. (NYSE:UBER) with collective stakes worth $5.26 billion, compared to 144 funds in the prior quarter worth about $8.5 billion. Andreas Halvorsen’s Viking Global is one of the leading stakeholders of the company, with 16.5 million shares worth $339.3 million.
Smart investors are piling in Uber Technologies, Inc. (NYSE:UBER), in addition to Alphabet Inc. (NASDAQ:GOOG), Visa Inc. (NYSE:V), and Meta Platforms, Inc. (NASDAQ:META).
Here is what ClearBridge Large Cap Growth Strategy has to say about Uber Technologies, Inc. (NYSE:UBER) in its Q3 2021 investor letter:
“We have also been looking for multi-year secular trends outside of the IT and Internet sectors to help us maintain a portfolio that can perform well in markets with varied sector or factor leadership. In particular, electrification of the global economy and the transition to electric vehicles (EVs) are areas where we continue to add exposure. We are investing in the brains behind EVs through NXP in the control center and Aptiv for safety features. Global rideshare leader Uber will also be a key player in the transition from internal combustion engines to EVs.”
6. Mastercard Incorporated (NYSE:MA)
Number of Hedge Fund Holders: 137
Mastercard Incorporated (NYSE:MA) is an American multinational payments processing company. The company raised its full-year revenue guidance for 2022 in late July, supported by the continued recovery in international travel and solid consumer spending patterns. Mastercard Incorporated (NYSE:MA) is one of the best stocks to invest in right now, and it was part of 137 elite hedge fund portfolios at the end of the second quarter of 2022. Charles Akre’s Akre Capital Management is the biggest stakeholder of the company, with 5.8 million shares worth $1.8 billion.
On September 2, Deutsche Bank analyst Bryan Keane maintained a Buy rating on Mastercard Incorporated (NYSE:MA) with a $440 price target after meeting Raj Dhamodharan, the company’s EVP, Blockchain and Digital Currencies, to discuss how Mastercard Incorporated (NYSE:MA) can play a role in the crypto space. Despite the latest bloodbath in the crypto sector, Mastercard Incorporated (NYSE:MA) believes the underlying blockchain technology is here to stay, the analyst told investors in a research note. The analyst added that Mastercard Incorporated (NYSE:MA) has found that merchants are usually not interested in receiving crypto payments and are more interested in tapping into the customer’s purchasing power.
Here is what Baron Fintech Fund has to say about Mastercard Incorporated (NYSE:MA) in its Q2 2022 investor letter:
“The Fund’s holdings in the Payments and Information Services themes also contributed to relative performance. Within Payments, lower exposure to this lagging theme and outperformance of Mastercard Incorporated (NYSE:MA) added the most value. These global payment networks are viewed as safe havens during market downturns but are also benefiting from resilient payment volumes and a sharp rebound in international travel.”
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Disclosure: None. 10 Best Stocks To Invest In Right Now is originally published on Insider Monkey.
