5 Best American Stocks To Buy Heading Into 2023

In this article, we discuss 5 best American stocks to buy heading into 2023. If you want to see more stocks in this selection, check out 13 Best American Stocks To Buy Heading Into 2023. 

5. 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 four segments – Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking, and Asset & Wealth Management. On October 14, JPMorgan Chase & Co. (NYSE:JPM) posted a Q3 GAAP EPS of $3.12 and a revenue of $32.72 billion, outperforming Wall Street estimates by $0.23 and $840 million, respectively. 

On October 17, Citi analyst Keith Horowitz reiterated a Buy rating on JPMorgan Chase & Co. (NYSE:JPM) with a $135 price target following the company’s Q3 results. The analyst said the bank is “hitting on all cylinders” and that present share levels offer an “excellent entry point” for a “quality franchise.”

According to Insider Monkey’s data, 104 hedge funds were bullish on JPMorgan Chase & Co. (NYSE:JPM) at the end of Q2 2022, compared to 110 funds in the earlier quarter. JPMorgan Chase & Co. (NYSE:JPM) is one of the best American stocks to buy for 2023 according to elite investors. 

Here is what Vltava Fund has to say about JPMorgan Chase & Co. (NYSE:JPM) in its Q3 2022 investor letter:

“We regard JPM to be the strongest and best- managed bank in the world. It is a leader in investment banking, commercial banking, credit cards, and asset management. Its size (the largest bank in the USA, with nearly USD 4,000 billion in assets) and diversification give it a strong competitive advantage that is compounded by its cost advantages and the high costs to clients associated with switching banks. JPM’s management prides itself on running the only large bank to avoid major instability over the long term.

JP Morgan’s quality and strength first became fully evident in 2008 under the leadership of its CEO Jamie Dimon. Not only did JP Morgan help to stabilize the market by taking over the failing Bear Stearns in the spring of that year, but throughout the Great Financial Crisis it was the only big US bank that did not require government assistance and it was highly profitable even in the difficult year of 2008.

A well-functioning and efficient bank can be a very good long-term investment, because the interest compounding effect works well here. JPM’s return on equity (ROE) is well into the double digits and this puts it in a good position to continue producing better long-term returns than does the market. JPM has been very profitable even during years when interest rates were close to zero. The current – and perhaps not temporary – return to somewhat more normal, higher interest rates should have a significantly positive impact on the bank’s interest income and overall profitability.”

4. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 128

Apple Inc. (NASDAQ:AAPL) is a mega-cap American stock to buy heading into 2023. On November 10, Apple Inc. (NASDAQ:AAPL) announced that it would spend $450 million on U.S. infrastructure as it gets its Emergency SOS texting feature for the iPhone 14 off the ground.

On November 8, Morgan Stanley analyst Erik Woodring maintained an Overweight rating on Apple Inc. (NASDAQ:AAPL) but trimmed the price target on the shares to $175 from $177 after the company announced that COVID-19 restrictions at its China production facility are negatively impacting iPhone 14 Pro and Pro Max production. However, the analyst noted that iPhone demand remains resilient and he views this as an “opportunity to ‘buy the dip’,” but added that tracking the fluid iPhone production situation “remains key.”

Among the hedge funds tracked by Insider Monkey, 128 funds were long Apple Inc. (NASDAQ:AAPL) at the end of Q2 2022, compared to 131 funds in the prior quarter. Warren Buffett’s Berkshire Hathaway held the largest stake in the company, comprising 895 million shares worth $122.3 billion. 

Here is what Wedgewood Partners specifically said about Apple Inc. (NASDAQ:AAPL) in its Q3 2022 investor letter:

“Apple Inc. (NASDAQ:AAPL) grew revenues +5% (foreign exchange adjusted and excluding Russia) driven by record iPhone revenues that were up about +3% on an exceptional year ago comparison of +50%. Apple’s installed base is over 1.8 billion devices which helps drive a software and services business that has generated almost $80 billion of revenue over the past 4 quarters. As we have highlighted in the past, Apple’s relentless focus on the development and integration between hardware (especially ICs) as well as software, continues to add significant value for customers of its products and services. We expect this favorable competitive dynamic to continue for the foreseeable future.”

3. Mastercard Incorporated (NYSE:MA)

Number of Hedge Fund Holders: 137

Mastercard Incorporated (NYSE:MA) is a New York-based financial technology company providing transaction processing and other payment-related products and services in the United States and internationally. On October 27, Mastercard Incorporated (NYSE:MA) reported a Q3 non-GAAP EPS of $2.68 and a revenue of $5.8 billion, topping analysts’ estimates by $0.10 and $140 million, respectively. 

Mizuho analyst Dan Dolev on November 9 reiterated a Buy recommendation on Mastercard Incorporated (NYSE:MA) but lowered the price target on the shares to $380 from $385 following the Q3 results. The analyst raised 2022 estimates but trimmed outer-year expectations.

According to Insider Monkey’s Q2 data, 137 hedge funds were long Mastercard Incorporated (NYSE:MA), compared to 136 funds in the last quarter. Charles Akre’s Akre Capital Management is the leading position holder in the company, with 5.8 million shares worth $1.8 billion. 

Here is what L1 Capital International specifically said about Mastercard Incorporated (NYSE:MA) in its Q2 2022 investor letter:

“Growth in electronic payments, the continued shift away from cash and cheques, and the provision of additional services such as fraud identification and prevention continue to power Mastercard Incorporated (NYSE:MA)’s growth (Figure 14). In person cross-border transactions are recovering alongside normalization of travel.

Mastercard and Visa (we have invested in both) continue to dominate the electronic payments industry outside of China, utilizing their own multi-faceted networks as well as Government and third-party payments infrastructure to facilitate transactions. Another perfect example of a ‘Noah’s Ark’ industry structure.

Regulation, technological disruption and disintermediation, and geopolitical constraints are perennial issues for consideration, but Mastercard (and Visa) management have repeatedly demonstrated their ability to manage these issues…” (Click here to read the full text)

2. Alphabet Inc. (NASDAQ:GOOG)

Number of Hedge Fund Holders: 153

Alphabet Inc. (NASDAQ:GOOG), the Google parent company, is one of the premier American stocks to buy as 2023 approaches. On October 26, Raymond James analyst Aaron Kessler maintained an Outperform rating on Alphabet Inc. (NASDAQ:GOOG) but lowered the price target on the shares to $120 from $143. Alphabet Inc. (NASDAQ:GOOG) reported weaker Q3 results as the company navigated difficult comps amid the largely challenging macro environment, the analyst told investors in a research note. The analyst still expects resilient long-term advertising revenue growth supported by Search and YouTube, strong Google Cloud momentum, and option value in other categories.

According to Insider Monkey’s data, 153 hedge funds were bullish on Alphabet Inc. (NASDAQ:GOOG) at the end of Q2 2022, compared to 160 funds in the prior quarter. Chris Hohn’s TCI Fund Management held a significant position in the company, comprising 2.5 million shares worth $5.4 billion. 

Here is what Mayar Capital has to say about Alphabet Inc. (NASDAQ:GOOG) in its Q3 2022 investor letter:

“In early January this year – which admittedly feels like eons ago – US President Joe Biden was pushing Americans to take up the government’s offer of free COVID tests to help tackle the surging omicron variant. How did Biden respond when citizens asked about the availability of these tests?

“Google it!”

This advice, undoubtedly well-meant, was roundly scoffed at by the press, however. It seemed too obvious to be very helpful.

Anyway, the anecdote serves to introduce you to one of our largest holdings, Alphabet; the parent company of Google. Note that first, Alphabet’s original and core product – its search engine – has entered our common vocabulary as a verb. ‘Googling’ something has the same meaning as ‘researching’ or ‘finding an answer to’ something. Second the reason Biden’s advice was met with such opprobrium was because Googling something has become almost second nature to us now.

These two observations reveal a lot about Google’s strength in the search engine market, in which it has a share of over 90 percent. Because internet search is almost the prototypical network, Google has benefitted from – and we think is also protected by – the huge competitive advantage its scale brings – both to those asking the questions and those providing the answers. The Google search platform becomes increasingly useful to anyone seeking information as a greater volume of stuff becomes available. This starts a virtuous cycle that results in a colossal market share for Google itself. In the language of business strategists, Google benefits from vast network effects.

Because Google’s search results are viewed by billions of eyeballs every day, its search page ‘real estate’ is understandably very valuable to those with goods and services to sell. Advertising revenues from this ‘real estate’ as well as that from its other properties such as Mail, Maps, and so on, totaled almost USD 150b in 2021; amounting to almost 58% of the company’s revenues. Ad sales on YouTube, also owned by Alphabet, brought in another USD 28b. With the secular shift of the advertising spend to digital channels – over which Alphabet has a tight grip – we estimate the company has a share of around 40% of the digital advertising market and is probably the most valuable advertising property in the world…” (Click here to see the full text)

1. Visa Inc. (NYSE:V)

Number of Hedge Fund Holders: 166

Visa Inc. (NYSE:V) is an American multinational financial services corporation that provides credit cards and payment systems. On October 25, Visa Inc. (NYSE:V) declared a $0.45 per share quarterly dividend, a 20% increase from its prior dividend of $0.375. The dividend is payable on December 1, to shareholders of record on November 11. Visa Inc. (NYSE:V) also announced a new $12 billion share repurchase program. It is one of the elite American stocks to buy now.

On October 27, Barclays analyst Ramsey El-Assal reiterated an Overweight rating on Visa Inc. (NYSE:V) but trimmed the firm’s price target on the shares to $264 from $271 following the Q3 earnings.

According to the second quarter database of Insider Monkey, 166 hedge funds were bullish on Visa Inc. (NYSE:V), compared to 159 funds in the prior quarter. Ken Fisher’s Fisher Asset Management is a prominent stakeholder of the company, with 13.6 million shares worth $2.6 billion.

Here is what RiverPark Large Growth Fund has to say about Visa Inc. (NYSE:V) in its Q3 2022 investor letter:

“We reinitiated a small position in Visa, which we had previously owned for years (selling out of the position at higher levels in February). We continue to believe that the long-term secular growth trend towards digital payments remains intact and has been further enhanced by the COVID crisis. The growth in debit cards, contactless payments, e-commerce, and now, buy-now-pay-later (BNPL), are all driving digital payment penetration, and we continue to be impressed with the long-term growth potential of V (and our other payment holdings Mastercard, Adyen, and PayPal).”

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