In this article, we will be taking a look at the 5 Best Consumer Discretionary Stocks to Buy Now. To read our analysis of the Consumer Discretionary industry, you can go to the 10 Best Consumer Discretionary Stocks to Buy Now.
5. Booking Holdings Inc. (NASDAQ:BKNG)
Number of Hedge Fund Holders: 93
Based in Norwalk, Connecticut, Booking Holdings Inc. (NASDAQ:BKNG), is a leading provider of online travel and related services with a presence in more than 220 countries and territories across the world. The company provides its services primarily through six online platforms: Booking.com, Priceline, Agoda, Rentalcars.com, KAYAK and OpenTable. It boasts more than 28 million listings of hotels, homes, apartments, and other unique places to stay across its platforms.
Booking Holdings Inc. (NASDAQ:BKNG) recorded Gross travel bookings of $76.6 billion in 2021, 116% more than the prior year. Its total revenues increased by 99% y-o-y to $4.3 billion, while it recorded a net income of $857 million, for three months ended June 30, 2022. The EPS was recorded at $21.07, beating the consensus by $5.23.
As of Q2 2022, 93 of the 895 hedge funds tracked by Insider Monkey have positions in Booking Holdings Inc. (NASDAQ:BKNG), worth $5.5 billion. Its largest shareholder is Ken Griffin’s Citadel Investment Group with ownership of 761,500 shares valued at $1.3 billion.
4. Netflix, Inc. (NASDAQ:NFLX)
Number of Hedge Fund Holders: 95
Netflix, Inc. (NASDAQ: NFLX) is a leading provider of streaming entertainment services based in Los Gatos, California. It boasts more than 220 million paid memberships across more than 190 countries and offers a film and television series library through distribution deals as well as its own productions.
In July, Netflix, Inc. (NASDAQ:NFLX) released its financial results for the second quarter of 2022. Its total revenue increased by 8.6% y-o-y to $7.8 billion, while its net income increased by 6.5% y-o-y to $1.4 billion, for the three months ended June 30, 2022. The normalized EPS was recorded at $3.20, beating the consensus by $0.25.
As of Q2 2022, 95 of the 895 hedge funds tracked by Insider Monkey held shares of Netflix, Inc. (NASDAQ: NFLX), worth $4.7 billion. Ken Fisher’s Fisher Asset Management was its largest shareholder with ownership of 6.5 million shares valued at $1.1 billion.
Here is what Oakmark Fund has to say about Netflix, Inc. (NASDAQ:NFLX) in its Q2 2022 investor letter:
“Netflix‘s stock price was down considerably after providing a weaker than expected outlook for both subscriber growth and profit margins. After meeting with management and scrutinizing our investment thesis, we lowered our estimate of business value to account for the company’s softer near-term guidance. However, we believe the decline in the company’s share price more than adjusts for this. Indeed, Netflix now trades for a discount to the S&P 500 Index on next year’s GAAP earnings despite our view that the company remains a much better than average business run by a highly accomplished management team. We believe the company’s lead in streaming remains intact and we expect terminal operating margins to be substantially higher than they are today. Furthermore, we are encouraged by Netflix’s potential to enhance revenue growth through advertising, the monetization of password sharing and further penetrating international markets.”
3. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders: 109
Based in Burbank, California, Walt Disney Company (NYSE:DIS) is a worldwide entertainment company operating across Media and Entertainment Distribution, and Parks, Experiences and Products segments. It operates 6 resort destinations with 12 theme parks and 53 resorts in the US, Europe, and Asia; a cruise line with 4 ships; a beach resort in Hawaii; vacation ownership program; and two guided tour adventure businesses. The company is also home to entertainment brands such as ESPN, Disney+, Hulu, Marvel Studios, and National Geographic, among others.
Earlier this year in August, Walt Disney Company (NYSE:DIS) released its financial results for the quarter ended July 2, 2022. Its total revenues increased by 26% y-o-y to $21.5 billion, while its net earnings increased by 34% y-o-y to $1.5 billion, for the three months. The normalized EPS was recorded at $1.09 per share, beating the consensus by $0.10.
As of Q2 2022, 109 hedge funds tracked by Insider Monkey held shares of Walt Disney Company (NYSE:DIS), worth $3.2 billion.
Here is what Oakmark Fund had 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.”
2. Uber Technologies, Inc. (NYSE:UBER)
Number of Hedge Fund Holders: 129
San Francisco, California-based, Uber Technologies, Inc. (NYSE:UBER) provides technology platforms matching consumers looking for rides and independent ride services providers. It also offers other forms of transportation including public transit, bikes, and scooters. Other offerings include food delivery on demand, freight services, business fleet services, and same day delivery options. It operates in over 70 countries worldwide and boasted 115 million monthly active platform consumers as of March 31, 2022.
Earlier this year in August, Uber Technologies, Inc. (NYSE:UBER) released its financial results for the quarter ended June 30, 2022. Its total revenue increased by 106% y-o-y to $8.1 billion, while it reported a net loss of $2.6 billion, for the three months. The normalized EPS was recorded at -$0.03 for the quarter, beating the consensus by $0.02.
As of Q2 2022, 129 of the 895 hedge funds tracked by Insider Monkey were long Uber Technologies, Inc. (NYSE:UBER), holding shares worth $5.3 billion. Ken Fisher’s Fisher Asset Management was the largest shareholder with ownership of 24.5 million shares valued at $501 million.
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.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 252
Amazon.com, Inc. (NASDAQ:AMZN), is a multinational technology company operating online and physical stores where it sells its own products as well as allows third-party sellers to sell their products to consumers. It manufactures and sells electronic devices, including Kindle, Fire tablet, Fire TV, Echo, and Ring, and develops and produces media content; and provides cloud computing services through Amazon Web Services platform. Its ecommerce platform is home to more than 1.7 million small and medium businesses.
In July, Amazon released its financial results for the second quarter of 2022. Its total revenue increased by 7% y-o-y to $121.2 billion, while it reported a net loss of $2 billion for the three months ended June 30, 2022. The normalized EPS was recorded at (-$0.20) for the quarter, missing the consensus by $0.32.
Amazon.com, Inc. (NASDAQ:AMZN) is highly sought after by hedge funds, with the second highest number of hedge funds at 252 out of the 895 tracked by Insider Monkey, holding its shares with a total value of $30.1 billion. The ecommerce giant ranks #1 on the list of 10 best consumer discretionary stocks to buy now.
Oakmark Funds, an investment management firm, mentioned Amazon.com, Inc. (NASDAQ: AMZN) in its Q2 2022 investor letter. Here’s what they said:
“Amazon (NASDAQ:AMZN) is the leading e-commerce and cloud-computing provider in the world. Two-thirds of U.S. households are Amazon Prime subscribers, and over half of all online product searches now start on Amazon. We believe the company’s strong customer loyalty and massive infrastructure are significant barriers to entry in a growing e-commerce market. Separately, Amazon Web Services (“AWS”) controls nearly half of the market in cloud computing. We believe AWS has become utility-like in nature and scale and we expect healthy growth moving forward as IT workloads continue moving to the cloud. More recently, concerns about rising investment spending have weighed on the stock-as they have in times past-providing us another opportunity to purchase shares at a very attractive price. At our purchase price and valuing AWS like its peers, an investor isn’t paying much of anything for the immensely valuable e-commerce franchise.”
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