In this article, we discuss the 5 best bear market stocks to buy now. If you want to see more stocks in this selection, go directly to the 14 Best Bear Market Stocks To Buy Now.
5. Berkshire Hathaway Inc. (NYSE:BRK-B)
Number of Hedge Fund Holders: 109
Berkshire Hathaway Inc. (NYSE:BRK-B) operates as a diverse multinational conglomerate holding company with its headquarters located in Omaha, Nebraska. Its principal revenue streams primarily stem from the insurance sector. The capital generated from insurance activities is strategically allocated across a broad spectrum of subsidiaries, equity investments, and diverse securities. Notably, the company exhibits resilience against bear markets owing to its well-rounded portfolio of businesses and investments spanning multiple industries.
According to Insider Monkey’s database for the second quarter, 109 hedge funds showed bullish sentiments toward Berkshire Hathaway Inc. (NYSE:BRK-B), marking a slight increase from the 108 in the previous quarter. The largest stakeholder of the company is the Bill & Melinda Gates Foundation Trust, possessing an impressive holding of more than 25 million shares valued at approximately $8.5 billion.
4. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 111
UnitedHealth Group Incorporated (NYSE:UNH) is an American multinational managed healthcare and insurance company based in Minnetonka, Minnesota, operating as a for-profit entity. The corporation is structured into four segments, namely UnitedHealthcare, Optum Health, Optum Insight, and Optum Rx. Considered a highly stable stock in bear markets, UnitedHealth Group Incorporated (NYSE:UNH) declared a quarterly dividend of $1.88 per share, in line with previous on August 23. The dividend was distributed on September 19, to shareholders of record on September 11.
Insider Monkey’s database of 910 hedge funds shows that 111 hedge funds reported owning stakes in UnitedHealth Group Incorporated (NYSE:UNH). The most significant stakeholder of the firm during this period was Rajiv Jain’s GQG Partners which owns a $2.4 billion stake in the company.
Mairs & Power Growth Fund made the following comment about UnitedHealth Group Incorporated (NYSE:UNH) in its second quarter 2023 investor letter:
“Notable detractors to performance in the first half were US Bank (USB), Charles Schwab (SCHW), and UnitedHealth Group Incorporated (NYSE:UNH), which were down 22.09%, 31.65%, and 8.65%, respectively. Another detractor from relative performance was UnitedHealth Group, which was down 8.65%. However, we have a positive long-term view of the company, headquartered in Minnesota, and especially its potential when it comes to harnessing its vast amounts of patient data via AI. Additionally, its Optum unit, which provides technology and data-driven care delivery, has AI-enabled tools that can help healthcare providers drive more efficient and accurate care to patients.
3. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 135
There is a broad consensus among both hedge funds and Wall Street analysts regarding the attractiveness of Apple Inc. (NASDAQ:AAPL) as a compelling long-term investment. This agreement is underpinned by several factors, including Apple Inc.’s strong product portfolio, substantial growth in services and software, as well as its continued dedication to innovation and long-term strategies. Apple Inc. (NASDAQ:AAPL) unveiled its financial results for FQ3 on August 3, surpassing Wall Street expectations with a GAAP EPS of $1.26, exceeding estimates by $0.07. Similar to other names on our list, Apple Inc. (NASDAQ:AAPL) has garnered long-standing favor from billionaire Warren Buffett.
Our hedge fund data for the first quarter indicates that 135 hedge funds were bullish on Apple Inc. (NASDAQ: AAPL). Their collective stake was valued at $194 billion. Notably, Warren Buffett’s Berkshire Hathaway emerged as the largest stakeholder in Apple Inc. (NASDAQ: AAPL) at the close of the first quarter, holding an impressive 915.56 million shares in the company.
Choice Equities Capital Management made the following comment about Apple Inc. (NASDAQ:AAPL) in its second quarter 2023 investor letter:
“Dramatic valuation differences across market cap sizes continue. This has been the case for some time now. Perhaps I have spent too much time discussing these dichotomies, as generally, I feel like if we pick the right stocks and manage market exposures thoughtfully, our equities- oriented portfolio will prosper across various market cycles. However, when markets become as lopsided as they have lately, I feel additional discussion on the market environment is worthwhile, if only to help highlight the opportunities that are available and the likely path forward. I expect future discussions to soon be focused again on our moderately concentrated portfolio. But for now, let’s take one last in-depth look at how far reaching these valuation dichotomies have again become.(Please note: charts that accompany the following can be found in the Appendix.)
Take Apple Inc. (NASDAQ:AAPL) for example. It is the largest stock by market cap, and fairly considered one of the best companies in the world. The company has been extraordinarily successful and improved standards of living everywhere in the process with their ubiquitous products. Along the way, shareholders have been richly rewarded, with shares increasing nearly fourteen-fold over the last ten years while generating an annualized total shareholder return of 31%, including dividends.
On the back of another big quarter for large cap tech, it is now the first stock to surpass the $3T market cap threshold. This makes its weighting in the ~$37T market cap of the S&P 500, ~8%. It also means this one stock’s market cap is larger than that of the entire ~$2.98T market cap of the Russell 2000 index, the first time in history a single stock has outweighed the Russell 2000 – aside from two brief days in September 2020 when Apple’s market cap then accomplished the same…” (Click here to read the full text)
2. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 152
Alphabet Inc. (NASDAQ:GOOG) stands as a prominent technology giant. At the core of its operations lies Google, a search engine that handles billions of queries every single day. The firm also encompasses an array of video streaming and productivity platforms, including Youtube. Additionally, the company engages in the sale of electronic devices such as smartphones, ultra-thin notebooks, and speakers.
As of July 13, John Blackledge at TD Cowen continues to uphold an Outperform rating and sets a price target of $140 for Alphabet Inc. (NASDAQ: GOOG).
As the close of the second quarter of 2023, 152 hedge funds had stakes in Alphabet Inc. (NASDAQ:GOOG). The most significant stakeholder of the company was Natixis Global Asset Management’s Harris Associates which owns a $3.21 billion stake in the company.
Here’s what Artisan Partners said about Alphabet Inc. (NASDAQ:GOOG) in its second-quarter 2023 investor letter:
“Our best performing stocks this quarter were Meta, Alphabet Inc. (NASDAQ:GOOG) and Heidelberg Materials. The rise in Alphabet’s share performance was primarily driven by the AI frenzy. Earlier this year, there were some doubts about Alphabet’s ability to compete with OpenAI’s ChatGPT product. This was a bit ironic since Alphabet has been using AI technology to improve its Google search results and advertising business for years. Indeed, the technology that underpins OpenAI’s ChatGPT actually came from Alphabet more than five years ago. But sometimes the market needs a reminder, and Alphabet provided tangible evidence of its capabilities. At a recent developer conference, it launched Bard, a consumer-oriented generative AI version of its search engine, as well as several other concrete examples of how AI could improve its current business. As with Meta, the long-term implications of AI on Alphabet’s business model are still far from certain. But we do believe that it is a technology leader in this field and will participate in whatever direction the technology develops.”
1. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 171
Visa Inc. (NYSE:V) is a multinational financial services corporation headquartered in San Francisco, California, specializing in facilitating electronic funds transfers worldwide, predominantly through Visa-branded credit cards, debit cards, and prepaid cards. As one of the most valuable companies globally, it presently offers a quarterly dividend of $0.45 per share, resulting in a dividend yield of 0.79% as of October 2. The dividend was distributed on September 1, to shareholders of record on August 11.
As of the end of the second quarter of 2023, a total of 171 hedge funds, according to Insider Monkey, were holding positions in Visa Inc. (NYSE:V), a slight decrease from the 173 in the previous quarter. The combined value of these stakes exceeds $24.9 billion.
Baron FinTech Fund made the following comment about Visa Inc. (NYSE:V) in its second quarter 2023 investor letter:
“We modestly trimmed Visa Inc. (NYSE:V), Mastercard Incorporated, and Accenture plc to manage the position sizes and raise capital to fund purchases elsewhere. These stocks remain full-sized positions and high-conviction ideas in the Fund.
Another fintech industry trend we’re seeing is a pickup in M&A activity, most notably in the payments sector. The year started with Nuvei’s $1.3 billion acquisition of Paya announced in January. In April, Network International received an initial takeover offer from a group of private equity firms, which was then topped by Brookfield Asset Management whose $2.8 billion offer was accepted by the Board in June. Following reports earlier this year of a bidding war between Visa Inc. and Mastercard Incorporated to acquire cloud-based issuer processor and core banking software provider Pismo, Visa announced its intention to acquire the Brazilian company for $1 billion in late June.”
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