In this article, we will take a look at the 5 best blue chip stocks under $100. To see more such companies, go directly to 13 Best Blue Chip Stocks Under $100.
5. The Charles Schwab Corporation (NYSE:SCHW)
Number of Hedge Fund Holders: 88
The Charles Schwab Corporation (NYSE:SCHW) ranks 5th in our list of the best blue chip stocks under $100 according to hedge funds.
As of the end of the second quarter of 2023, 88 hedge funds tracked by Insider Monkey reported owning stakes in The Charles Schwab Corporation (NYSE:SCHW). The biggest hedge fund stakeholder of The Charles Schwab Corporation (NYSE:SCHW) during this period was Natixis Global Asset Management’s Harris Associates which owns a $1.1 billion stake in the company.
ClearBridge Large Cap Value Strategy made the following comment about The Charles Schwab Corporation (NYSE:SCHW) in its Q2 2023 investor letter:
“We have done so recently with The Charles Schwab Corporation (NYSE:SCHW), which got caught up in investor concerns over regional banks, due to the perception of an asset/liability mismatch on Schwab’s balance sheet. While there are similarities with regional banks, Schwab has minimal credit risk and far higher organic growth than traditional banks. In addition, Schwab’s mostly retail customers are not pulling money out of its ecosystem. On the contrary, the company continues to grow client assets at a mid-single-digit percentage rate despite the banking selloff. Concerned over interest rate risk, we trimmed our position last year and earlier this year. As the stock pulled back this spring, we added back aggressively. It remains an exceptionally strong franchise in terms of asset gathering and customer loyalty and runs a unique business model that continues to attract client assets; we are pleased to have the opportunity to express our differentiated view.”
4. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders: 90
Bank of America Corporation (NYSE:BAC) is one of the top blue chip stocks that investors could buy in budget. Bank of America Corporation (NYSE:BAC) pays regular dividends and enjoys security and dominance in the market due to its sheer size. Bank of America Corporation (NYSE:BAC) CFO Alastair Borthwick recently said during an event that the company expects Q3 net income in the range of $14.2 billion – $14.3 billion, in-line with many estimates and even better than forecasts of several analysts.
As of the end of the second quarter of 2023, 90 hedge funds tracked by Insider Monkey reported having stakes in Bank of America Corporation (NYSE:BAC).
Diamond Hill Select Strategy made the following comment about Bank of America Corporation (NYSE:BAC) in its Q2 2023 investor letter:
“Other bottom contributors included SunOpta, Bank of America Corporation (NYSE:BAC) and Texas Instruments. Bank of America (which we added to the portfolio in Q2) is among the US’s largest banks. Shares were pressured during the quarter against a still-challenging backdrop for banks, particularly as investors fret about rising deposit costs and the values of some longer-duration assets in a rising-rates environment.”
3. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders: 92
The Walt Disney Company (NYSE:DIS) shares have been battered amid growth concerns, tough competition in the streaming market and struggles of the company’s parks business. However, long-term analysts believe The Walt Disney Company (NYSE:DIS) could see a turnaround under the leadership of Bob Iger. Recently, Bank of America reiterated a Buy rating on The Walt Disney Company (NYSE:DIS). The Walt Disney Company (NYSE:DIS) said Bob Iger could shift the company’s focus to long-term growth. Bank of America has a price target of $110 on The Walt Disney Company (NYSE:DIS) shares.
A total of 92 hedge funds out of the 910 hedge funds tracked by Insider Monkey had stakes in The Walt Disney Company (NYSE:DIS) as of the end of the second quarter of 2023.
Diamond Hill Large Cap Strategy made the following comment about The Walt Disney Company (NYSE:DIS) in its Q2 2023 investor letter:
“Our bottom contributors in Q2 included health insurance company Humana, biopharmaceutical company Pfizer and global entertainment company The Walt Disney Company (NYSE:DIS). Disney’s Bob Iger returned to the CEO’s seat in November 2022, replacing Bob Chapek, who left following a turbulent tenure. As a result of disappointing quarterly results and incremental commentary suggesting a more inline strategy with other media, the market has become less confident that Iger will achieve a turnaround by the end of his 1.5- year contract. We continue to believe Disney has a unique collection of assets and owns some of the best content among all media companies. Their ability to monetize this content across many platforms — studio, theme park, toys, streaming — is incredibly valuable; thus we remain investors.”
2. Alibaba Group Holding Limited (NASDAQ:BABA)
Number of Hedge Fund Holders: 112
Despite the headwinds and economic uncertainty in China, Alibaba Group Holding Limited (NASDAQ:BABA) remains one of the top retailers in the world. It is also a notable blue chip stock under $100 hedge funds like.
Insider Monkey’s database of 910 hedge funds shows that 112 hedge funds reported owning stakes in Alibaba Group Holding Limited (NASDAQ:BABA) as of the end of the second quarter of 2023. The biggest hedge fund stakeholder of Alibaba Group Holding Limited (NASDAQ:BABA) was David Tepper’s Appaloosa Management LP which owns a $373 million stake in the company.
L1 Long Short Fund made the following comment about Alibaba Group Holding Limited (NYSE:BABA) in its second quarter 2023 investor letter:
“Alibaba Group Holding Limited (NYSE:BABA) (Long -18%) shares weakened in recent months as Chinese reopening strength faded and macro-economic datapoints began sequentially declining. Nevertheless, we believe the Chinese government will use consumption as a key lever to reinvigorate the economy post-COVID lockdowns. Alibaba remains a high-quality business with leading positions in both eCommerce and Public Cloud, and management is taking proactive steps to unlock shareholder value. It has announced plans to split into six major business groups – Cloud Intelligence, Taobao Tmall, Local Services, Global Digital, Cainiao Smart Logistics and Digital Media, and Entertainment Group. Each group will be managed independently, with a separate CEO and board, have the flexibility to raise external capital and potentially pursue separate IPOs. We believe this restructure will be a strong positive catalyst to unlock the sum-of-the-parts valuation upside in the company.”
1. Uber Technologies, Inc. (NYSE:UBER)
Number of Hedge Fund Holders: 144
Uber Technologies, Inc. (NYSE:UBER) is one of the most notable blue chip stocks under $100 to buy according to hedge funds. Over the past six months Uber Technologies, Inc. (NYSE:UBER) is up about 43%. Recently, Uber Technologies, Inc. (NYSE:UBER) CEO Dara Khosrowshahi, speaking at the Skift Global Conference in New York, said that Uber is no longer growing at “any cost” and the company plans to keep its costs down and focus on profitable growth.
As of the end of the second quarter of 2023, 144 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Uber Technologies, Inc. (NYSE:UBER). The biggest stakeholder of Uber Technologies, Inc. (NYSE:UBER) was Brad Gerstner’s Altimeter Capital Management which owns a $575 million stake in the company.
RiverPark Large Growth Fund made the following comment about Uber Technologies, Inc. (NYSE:UBER) in its Q2 2023 investor letter:
“Uber Technologies, Inc. (NYSE:UBER): UBER was a top contributor for the quarter following better than expected 1Q23 earnings and 2Q23 guidance. Gross bookings of $31.4 billion were up 22% year over year. Mobility gross bookings of $15 billion grew 44% over the last year driven by a combination of product innovation and driver availability. Delivery gross bookings, also $15 billion, were up 12% from last year and accelerated through the quarter. 1Q Adjusted EBITDA of $761 million, up $593 million year over year, significantly beat management’s $660-$700 million guidance and the company generated $549 million of free cash flow versus a loss last year. Management guided to continuing growth in 2Q Gross Bookings (13%-17% growth) and Adjusted EBITDA (of $800- $850 million).
UBER remains the undisputed global leader in ride sharing, with a greater than 50% share in every major region in which it operates. The company is also a leader in food delivery, where it is number one or two in the more than 25 countries in which it operates. Moreover, after a history of losses, the company is now profitable, delivering expanding margins and substantial free cash flow. We view UBER as more than just ride sharing and food delivery, but also as a global mobility platform with the ability to sell to its 130 million users (by comparison, Amazon Prime has 200 million members) and penetrate new markets of on-demand services, such as package and grocery delivery, travel, truck brokerage (the company had $1.4 billion in Freight revenue for 1Q23), and worker staffing for shift work. Given its $4.2 billion of unrestricted cash and $5 billion of investments, the company today has an enterprise value of $84 billion, indicating that UBER trades at 20x next year’s estimated free cash flow.”
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