In this article, we discuss the 5 best American stocks to buy in 2022. If you want to read our comprehensive analysis of these stocks and the current market situation, go directly to 12 Best American Stocks To Buy in 2022.
5. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders: 111
Commonly referred to as Disney, The Walt Disney Company (NYSE:DIS) is an American multinational entertainment and media conglomerate headquartered at the Walt Disney Studios complex in Burbank, California.
During the first quarter of 2022, The Walt Disney Company (NYSE:DIS) added roughly 11.8 million Disney+ subscribers, totaling 129.8 million. Across all subscriptions, Disney ended the period with 196.4 million subscribers as a whole. As a result, the company posted strong financials for the quarter as well. The EPS was reported to be at $1.06, beating estimates by $0.44. Additionally, the revenue came in at $21.82 billion, an increase of 34.28% on a year-over-year basis, surpassing market predictions by $943.31 million.
On April 19, Rosenblatt analyst Barton Crockett initiated coverage of The Walt Disney Company (NYSE:DIS) with a Buy rating and a $177 price target, noting that demand for Disney theme parks was stronger than ever due to an increase in international travel. Although he admits being skeptical about the DTC streaming sector, he sees The Walt Disney Company (NYSE:DIS) as “relatively well-positioned” given its scaled leadership and global footprint.
At the end of the fourth quarter of 2021, 111 hedge funds in the database of Insider Monkey held stakes worth $6.9 billion in The Walt Disney Company (NYSE:DIS), up from 101 the preceding quarter worth $9.4 billion. The company’s leading shareholder during the quarter was Coatue Management, which owned 5.79 million shares worth $897.9 million.
In its Q4 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and The Walt Disney Company (NYSE:DIS) was one of them. Here is what the fund said:
“The communication services sector was a weak spot in both the benchmark and the portfolio in the fourth quarter. The Walt Disney Company (NYSE:DIS) announced lower than expected streaming subscriber growth to the company’s Disney+ offering, attributable primarily to the content release schedule. The Walt Disney Company (NYSE:DIS) has been ramping up content spending given strong global response to Disney+, although production capability was temporarily impacted by COVID-19. We still believe The Walt Disney Company (NYSE:DIS) is on track to reach the subscriber outlook outlined at its December 2020 analyst day, driven by a very robust slate of content releases, particularly in the 2022–2024 time period.”
4. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 134
One of the few stocks that can be called pandemic winners, Apple Inc. (NASDAQ:AAPL) is an American multinational technology company that specializes in consumer electronics, software, and online services. Despite some concerns regarding supply constraints, many analysts, including Morgan Stanley’s Katy Huberty, believe that Apple Inc. (NASDAQ:AAPL) should be able to achieve sustained gross margins upwards of 42%, due to its gradual supply improvements and structurally lower depreciation and amortization (D&A) improvements.
Apple Inc. (NASDAQ:AAPL) released its better-than-expected earnings report for the fiscal second quarter of 2022 on April 28. The company reported an EPS of $1.52, beating market estimates by $0.09. The tech giant also generated quarterly revenues that amounted to $97.28 billion, an increase of 8.59% on a year-over-year basis, surpassing the market consensus by $3.29 billion.
The investor sentiment for the stock has largely been positive, making Apple Inc. (NASDAQ:AAPL) one of the best American stocks out there. At the end of the fourth quarter of 2021, 134 hedge funds in the database of Insider Monkey held stakes worth $186 billion in Apple Inc. (NASDAQ:AAPL), up from 120 in the previous quarter worth $146 billion. Of these, Warren Buffett’s Berkshire Hathaway held the largest stake in the company, with a position worth $157.5 billion.
Evercore ISI analyst Amit Daryanani believes Apple Inc. (NASDAQ:AAPL) to be well-positioned to sustain mid-single digit sales and low double-digit EPS growth for “multiple years. With that in mind, he kept an Outperform rating and a $210 price target on the shares of the company.
ClearBridge Investments, an investment management firm, mentioned Apple Inc. (NASDAQ:AAPL) in its fourth-quarter 2021 investor letter. Here is what the firm said:
“Despite these mixed emerging growth results, the ClearBridge Global Growth Strategy outperformed the benchmark due to resilience among our secular and structural growth holdings. The bulk of these contributions came from U.S. mega-cap growth stocks Apple and Microsoft which continued to uniquely act both offensively and defensively as they have through most of the pandemic.”
3. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 142
Visa Inc. (NYSE:V) is an American multinational financial services corporation that facilitates electronic funds transfers throughout the world. Despite the lingering impact of the global pandemic and the conflict between Russia and Ukraine, the California-based payment processing giant saw its purchase volumes increase by 17% on a year-over-year basis to $2.78 trillion during Q2 2022.
As per its earnings report, the company’s fiscal Q2 non-GAAP EPS of $1.79 easily topped the consensus of $1.65, while the net revenue for the quarter came in at $7.19 billion, outpacing the consensus estimate of $6.82 billion.
On April 27, Morgan Stanley analyst James Faucette raised the price target on Visa Inc. (NYSE:V) to $284 from $279 and maintained an Overweight rating on its shares. The analyst was encouraged by the continued signs of travel recovery as the company’s cross-border travel volumes accelerated significantly, causing him to increase his EPS estimates by 2% for FY22 and FY23 following the company’s quarterly report.
According to Insider Monkey’s Q4 data, 142 hedge funds held long positions in Visa Inc. (NYSE:V), with collective stakes exceeding $29 billion. Chris Hohn’s TCI Fund Management is the biggest shareholder of the company, with a position worth $5 billion.
Wedgewood Partners, an investment firm, mentioned Visa Inc. (NYSE:V) in its Q1 2022 investor letter. Here’s what the fund said:
“Visa continued to benefit from strong consumer spending as well as a recovery in crossborder payment volumes, more recently driven by the return of travelers. While the emergence of the “Omicron” variant of COVID early in the quarter posed a risk to this travel recovery, it proved short-lived, with most of Europe, North America, and Latin American reengaging in cross-border travel. Visa continues to extend its network to all comers. By processing over $10 trillion in volume per year, Visa has unparallel scale and, as a result, can sell this scale to its customers at very attractive economics. For example, “FinTech” businesses will often charge customers upwards of 3-5% to transact, while Visa takes mere basis points on most transactions, despite enabling service levels historically reserved for only the largest financial institutions. After adding to Visa late last year, we are most pleased that Visa is back to one of our top 5 holdings.”
2. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 158
Known as the parent company of Google and its subsidiaries, Alphabet Inc. (NASDAQ:GOOG) is an American multinational technology conglomerate holding company headquartered in Mountain View, California. Although it came up with a mixed bag for the first quarter, Google’s search advertising business, the company’s main revenue driver, gained 24% to $39.6 billion, while its Cloud unit sales increased by 44% to $5.82 billion.
On April 26, Alphabet Inc. (NASDAQ:GOOG) reported its Q1 2022 financial results, posting earnings per share of $24.62. The revenue for the quarter grew close to 23% on a year-over-year basis to $68.01 billion, ahead of market consensus by 142.21 million.
KeyBanc analyst Andy Hargreaves reiterated an Overweight rating on Alphabet Inc. (NASDAQ:GOOG) shares following quarterly results, leaving his price target on the stock unchanged at $3,075. Across his coverage, the analyst contends that Google Search’s resilience screens as a positive that more than offsets the incremental bear narrative around YouTube.
Alphabet Inc. (NASDAQ:GOOG) is a top stock pick among elite hedge funds. At the end of the fourth quarter of 2021, 158 hedge funds were long Alphabet Inc. (NASDAQ:GOOG) with collective stakes worth $36.62 billion. This is compared to 156 positions in the third quarter of 2021 with stakes worth $34.95 billion. Chris Hohn’s TCI Fund Management owned more than 2.9 million shares of Alphabet Inc. (NASDAQ:GOOG) at the end of last December, making it the largest stakeholder in the company.
Here is what Farrer Wealth Advisors has to say about Alphabet Inc. (NASDAQ:GOOG) in its Q1 2022 investor letter:
“Alphabet: We won’t waste much time trying to explain to our clients why Alphabet is such a phenomenal business, we believe that is quite self-evident. The better explanation is why we never bought Alphabet before. The reason was a personal bias we held based on three beliefs (which we now believe to be incorrect)
Growth in YouTube would stall as the increased ad-load would turn-off viewers (the double ad-load at the beginning of videos for example). Consumers will focus on discovery rather than search to purchase new items. For example – using Instagram/TikTok to decide what new clothes to buy instead of ‘googling’ for clothes. Other Bets: In general, we felt that capital spent on “Other Bets” has been a bit wasteful with the segment earning just around $3.1bn in revenue versus nearly $21bn in operating losses over the last five years…” (Click here to see the full text)
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 279
Multinational e-commerce and technology company Amazon.com, Inc. (NASDAQ:AMZN) leads our list of the best American stocks to buy in 2022. With a diverse interest in cloud computing, digital streaming, and artificial intelligence, Amazon.com, Inc. (NASDAQ:AMZN) is a Seattle-based corporation with operations extending to over 100 countries.
Amazon.com, Inc. (NASDAQ:AMZN) reported $1116.44 billion in revenue and -$7.56 in GAAP EPS for its fiscal first quarter of 2022, falling short of analyst estimates. Earlier this April, Truist analyst Youssef Squali lowered his price target on Amazon.com, Inc. (NASDAQ:AMZN) to $3,500 from $4,000 but maintained a Buy rating on the shares of the company. Though he believes Amazon is in for a “rough patch” in Q2, Squali adds that strong growth in AWS and Advertising, as well as the prospects for inflationary pressure, keep him positive on the stock.
Arguably the most famous brand in the world, the investor sentiment for the stock has largely been positive as well. Among the hedge funds tracked by Insider Monkey, 279 funds were bullish on Amazon.com, Inc. (NASDAQ:AMZN) at the end of December 2021, up from 242 funds in the preceding quarter. Boykin Curry’s Eagle Capital Management is a significant shareholder of the company, with 677,828 shares worth $2.26 billion.
Here is what Giverny Capital Asset Management has to say about Amazon.com, Inc. (NASDAQ:AMZN) in its Q1 2022 investor letter:
“Amazon clearly is one of the best companies on the planet, and probably most readers are receiving more packages from Amazon this year than last year. Amazon’s cloud computing business, AWS, is a world-beater and today generates most of the profit of the company. But there are a few things about Amazon that concern me.
Amazon generated $325 billion in revenue from its online store plus third-party seller services last year, yet generated only a 2% profit margin in retail. You don’t need to earn high margins to be a great
business. Costco is one of the best companies I’ve ever followed, and it earns only about a 3% margin. But Costco suppresses the margin so that it can offer customers exceptional values. Amazon offers exceptional convenience, but (in my experience) not always exceptional value. Costco also earns extremely steady, and high, returns on capital. Amazon’s returns on capital have trended down significantly recently…” (Click here to see the full text)
You can also take a look at 15 Best Technology Stocks To Buy Now and 12 Safe Stocks To Buy For Beginner Investors.
