In this article, we discuss 5 of the best fundamental stocks to buy. If you want to check out some more of the best fundamental stocks to buy, go directly to 10 Best Fundamental Stocks To Buy.
5. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 128
Apple Inc. (NASDAQ:AAPL) is the world’s most valuable tech company known for its iPhones, iPads, and other computing devices. Given its strong brand and its substantial scale, Apple Inc. (NASDAQ:AAPL) can charge more for its smartphones than many of its other competitors and hence realize higher margins. Due to the market decline, shares of Apple Inc. (NASDAQ:AAPL) have fallen 21.1% year to date and trade for a forward P/E ratio of 21.7. According to the DigiTimes, Apple is preparing for 2nm chips, which is scheduled to enter volume production in 2025. With smaller chips, iPhones could be faster and more energy efficient. 128 hedge funds in our database were long Apple Inc. (NASDAQ:AAPL) at the end of Q2.
4. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 153
Alphabet Inc. (NASDAQ:GOOG) is a leading search engine that also provides other products and services such as ads, Android, Chrome, Gmail, and YouTube. Given the market decline, shares of Alphabet Inc. (NASDAQ:GOOG) are down over 31% and trade for a forward P/E ratio of 16.85 which could be attractive if interest rates don’t rise all that much further.
Although TikTok represents potential competition to YouTube, Alphabet Inc. (NASDAQ:GOOG) also has YouTube Shorts, which is rapidly growing. On 10/4/22, Justin Post of Bank of America cut his price target on Alphabet Inc. (NASDAQ:GOOG) to $114 from $125 but kept a ‘Buy’ rating. 153 hedge funds in Insider Monkey’s database were long Alphabet Inc. (NASDAQ:GOOG) at the end of the second quarter.
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 184
Meta Platforms, Inc. (NASDAQ:META) is a leading social media company with leading apps such as Facebook, Instagram, and WhatsApp. The company also is investing heavily in its Reality Labs segment which provides augmented and virtual reality metaverse related products. Although the metaverse has a lot of potential, Meta Platforms, Inc. (NASDAQ:META)’s current metaverse app, Horizon Worlds, still has some quality issues according to Verge.
Meta Platforms, Inc. (NASDAQ:META) is also facing substantial competition from TikTok. Nevertheless, Meta Platforms, Inc. (NASDAQ:META) still among the top stocks among our 10 Best Fundamental Stocks To Buy given its earnings potential and its forward P/E of 12.3.
184 hedge funds we track were long Meta Platforms, Inc. (NASDAQ:META) at the end of Q2. Renaissance Technologies owned almost 5.5 million shares at the end of the second quarter.
2. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 252
Amazon.com, Inc. (NASDAQ:AMZN) is a leading e-commerce and cloud company. Given the decline in the broader market, Amazon.com, Inc. (NASDAQ:AMZN) shares are down 31.3% and trade for a forward P/E ratio of 50. Despite the high valuation, the stock ranks among our best fundamental stocks to buy given Amazon.com, Inc. (NASDAQ:AMZN)’s expected earnings growth in the future and its leading market share in e-commerce and the cloud. On 10/6/22 Amazon.com, Inc. (NASDAQ:AMZN) also announced it is hiring 150,000 employees througout the U.S. for the holidays.
252 hedge funds in our database were long Amazon.com, Inc. (NASDAQ:AMZN) at the end of the second quarter. Among them, Fisher Asset Management owned over 48.6 million shares at the end of Q2.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 258
Microsoft Corporation (NASDAQ:MSFT) is a tech giant with leading market share in operating systems and productivity software. The company also has a fast growing cloud service business. Given its strong earnings history and attractive expected earnings growth potential in the future, Microsoft Corporation (NASDAQ:MSFT) could be a great long term investment if it continues its momentum. With 258 hedge funds we track owning shares of Microsoft Corporation (NASDAQ:MSFT) at the end of the second quarter, the company ranks #1 on our list of 10 Best Fundamental Stocks To Buy.
Diamond Hill Capital Management mentioned Microsoft Corporation (NASDAQ:MSFT) in a Q2 2022 letter,
“The recent market environment has enabled us to initiate positions in some high-quality names that have sold off indiscriminately and are trading at prices we haven’t seen in quite some time. Microsoft Corporation (NASDAQ:MSFT) is one example. Microsoft’s stock price declined amid the broader selloff of technology companies. This presented an opportunity for us to purchase shares at an attractive discount to our estimate of the intrinsic value. We expect the business to continue generating strong revenue growth and benefiting from operating leverage. Microsoft’s cloud computing services business, Azure, is also generating robust growth, confirming its competitive positioning.”
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