In this article, we will look at the 5 best long-term stocks to buy now. If you want to explore similar stocks, you can also take a look at 11 Best Long-Term Stocks To Buy Now.
5. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 83
Johnson & Johnson (NYSE:JNJ) is one the best long-term stocks to buy now because of the company’s global presence, pricing power, and industry-leading position. Over the past fifteen years, Johnson & Johnson (NYSE:JNJ) has returned 9.48% to investors, beating the S&P 500’s return of 8.36% over the same period. Johnson & Johnson (NYSE:JNJ) has a trailing twelve-month operating margin of 26.3% and as of October 5, the stock has gained 3.15% over the past twelve months.
Johnson & Johnson (NYSE:JNJ) is a cash-rich company that reinvests in itself. On September 14, Johnson & Johnson (NYSE:JNJ) announced that the Board of Directors has authorized a share repurchase program of $5 billion. The company has free cash flows of $19.95 billion.
Over the past three months, Johnson & Johnson (NYSE:JNJ) has received 6 Buy ratings from Wall Street analysts. On October 5, Citi analyst Joanne Wuensch revised her price target on Johnson & Johnson (NYSE:JNJ) to $198 from $201 and reiterated a Buy rating on the shares.
At the close of Q2 2022, 83 hedge funds were bullish on Johnson & Johnson (NYSE:JNJ) and held stakes worth $6.76 billion in the company. As of June 30, GQG Partners owns more than 6.5 million shares of Johnson & Johnson (NYSE:JNJ) and is the largest shareholder in the company.
Here is what Distillate Capital Partners LLC had to say about Johnson & Johnson (NYSE:JNJ) in its second-quarter 2022 investor letter:
“Johnson & Johnson was among the 2 largest trims at around 1% each. Each stock was up 1% in the quarter compared to the 16% price decline for the S&P 500 and the positions were reduced as the valuations became somewhat less appealing, though still attractive enough to warrant inclusion.”
4. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 84
NVIDIA Corporation (NASDAQ:NVDA) is a secular growth company and a leader in semiconductors, AI, machine learning, and data centers. At the end of the second quarter of 2022, 84 hedge funds were long NVIDIA Corporation (NASDAQ:NVDA) and held stakes worth $3.3 billion in the company. Of those, Fisher Asset Management was the leading shareholder with stakes worth $1.15 billion.
Over the past ten years, NVIDIA Corporation (NASDAQ:NVDA) has returned 45.36% to shareholders, outpacing the S&P 500’s return of 12% for the same period. The stock is one of the best long-term stocks to buy now.
On September 21, Susquehanna analyst Christopher Rolland revised his price target on NVIDIA Corporation (NASDAQ:NVDA) to $190 from $200 and maintained a Positive rating on the shares. This September, JPMorgan analyst Harlan Sur maintained an Overweight rating on NVIDIA Corporation (NASDAQ:NVDA) and his $220 price target on the shares.
Here is what Baron Funds had to say about NVIDIA Corporation (NASDAQ:NVDA) in its second-quarter 2022 investor letter:
“At the company-specific level, there was a broad correction across the entire portfolio. While four of our holdings contributed to performance, the contribution to absolute returns was less than 100bps combined, as unfortunately none of them were large enough to move the needle. We had 16 investments detracting over 100bps each with NVIDIA (NASDAQ:NVDA), our second largest detractor, costing the Fund 254bps.
NVIDIA’s stock was hit even harder, down 44.4%, impacted by concerns over the health of the consumer, dramatic declines in crypto, and COVID-related lockdowns in China. Despite the sell-off and the increased near-term volatility in its gaming business, NVIDIA’s revenues grew 46% year-over-year with 48% operating margins, driven by continued strength in its data center business as companies across industries adopt AI and ML…” (Click here to see the full text)
3. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 128
Apple Inc. (NASDAQ:AAPL) is a high-margin and cash-rich business that has the ability to drive long-term shareholder value. The company has free cash flows of more than $107 billion and its strong pricing power allows it to sustain and grow its margins. The company has a trailing twelve-month operating margin of 30.5%. Over the past ten years, Apple Inc. (NASDAQ:AAPL) has gained 21.75% while the S&P 500 has gained 12%.
Wall Street analysts are positive about the company’s outlook. On September 20, Evercore ISI analyst Amit Daryanani raised his price target on Apple Inc. (NASDAQ:AAPL) to $190 from $185 and maintained an Outperform rating on the shares. On September 28, KeyBanc analyst Brandon Nispel reiterated his buy-side Overweight rating and $185 price target on Apple Inc.
At the end of the second quarter of 2022, 128 hedge funds disclosed ownership of stakes in Apple Inc. (NASDAQ:AAPL). These funds held collective stakes of $143 billion in the company. As of June 30, Warren Buffett’s Berkshire Hathaway is the leading investor in Apple Inc. (NASDAQ:AAPL) and has stakes worth $122 billion in the company.
Here is what Distillate Capital Partners LLC had to say about Apple Inc. (NASDAQ:AAPL) in its second-quarter 2022 investor letter:
“Apple was largest new purchase in the quarter, at a 2% weight. Apple underperformed the overall market last quarter, and given very minimal debt, this price weakness translated into a commensurate fall in its enterprise value. For stocks with higher debt levels, it takes a disproportionately bigger market cap drop to achieve the same valuation improvement and this is a key reason we avoid highly leveraged names where significant price weakness can be experienced during a revaluation process. Alongside this decline in EV for Apple, its estimated free cash flows have risen steadily throughout the year. This contrast between a falling enterprise value and rising free cash flow, which is highlighted in Figure 12, made the stock sufficiently better valued such that it entered the portfolio. While Apple’s valuation is now attractive enough to warrant inclusion in the portfolio, it still ranks in the bottom quartile of the portfolio’s holdings and so the stock’s initiating weight is capped at a 2%. This contrasts significantly with Apple’s near-7% position in the S&P 500 benchmark, and reflects both our preference to avoid too much concentration risk as well our goal of ensuring that the overall portfolio valuation is as attractive as possible while balancing characteristics of stability and low indebtedness.”
2. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 153
Wall Street is bullish on Alphabet Inc. (NASDAQ:GOOG). This August, Tigress Financial analyst Ivan Feinseth raised his price target on Alphabet Inc. (NASDAQ:GOOG) to $186 from $183 and maintained a Strong Buy rating on the share. On October 4, BofA analyst Justin Post revised his price target on Alphabet Inc. (NASDAQ:GOOG) to $114 from $125 and maintained a Buy rating on the shares.
Alphabet Inc. (NASDAQ:GOOG) has a rich portfolio of products and is leading a variety of industries, including cloud, data centers, AI, machine learning, and other high-growth industries that are expected to dominate the tech sector. Alphabet Inc. (NASDAQ:GOOG) is one of the best long-term stocks to invest in now because of the company’s current valuation, free cash flows, and profitability. As of October 5, Alphabet Inc. (NASDAQ:GOOG) is trading at a PE multiple of 19x, has an operating margin of 29.6%, and has free cash flows of $65 billion.
At the close of Q2 2022, 153 hedge funds disclosed ownership of stakes in Alphabet Inc. (NASDAQ:GOOG). These funds held collective stakes of roughly $22 billion in the company. As of June 30, TCI Fund Management is the largest shareholder in Alphabet Inc. (NASDAQ:GOOG) and has stakes worth $5.4 billion.
Here is what Lakehouse Capital had to say about Alphabet Inc. (NASDAQ:GOOG) in its second-quarter 2022 investor letter:
“Alphabet Inc. (NASDAQ:GOOG) reported another strong quarterly result despite the tough macroeconomic conditions. Revenue increased by 13% as Search proved resilient, primarily led by strength in the travel and retail verticals. YouTube advertising growth was lighter and moderated due to a tough comparison period and a general softening in brand advertising spend. That said, YouTube’s user engagement and time spent still continues to grow which bodes well for future monetisation opportunities. Google Cloud outpaced the company’s overall growth with revenue increasing by 36% and while it has yet to show any signs of profitability, we remain supportive of Alphabet continuing to reinvest in its cloud business given the size of the market opportunity ahead. On the cost front, the company added another 10,000 employees during the quarter, but notably, the CFO mentioned that hiring will likely slow down over the next twelve months as the company focuses on greater operating efficiency. Overall, we’re pleased with how the company has performed and are confident that management will be able to control costs, if or when the economic environment becomes more challenging.”
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 258
At the end of Q2 2022, 258 hedge funds held stakes in Microsoft Corporation (NASDAQ:MSFT). These stakes were valued at $56 billion. As of June 30, Fisher Asset Management is the leading investor in Microsoft Corporation (NASDAQ:MSFT) and has stakes worth $7.36 billion in the company.
On September 29, Raymond James analyst Andrew Marok reiterated his $300 price target and buy-side Outperform rating on Microsoft Corporation (NASDAQ:MSFT) when he resumed coverage of the stock. The analyst said that Microsoft Corporation (NASDAQ:MSFT) has “a collection of sustainable advantages,” which include its leading position in cloud computing, gaming, and digital advertising.
Microsoft Corporation (NASDAQ:MSFT) is a software behemoth with free cash flows of $65 billion and a forward dividend yield of 1.1%. The company has outperformed the S&P 500 over the past 10 years and has returned 26% to investors, verifying its ability to drive long-term growth. Microsoft Corporation (NASDAQ:MSFT) is one of the best long-term stocks to buy now.
Here is what Diamond Hill Capital Management had to say about Microsoft Corporation (NASDAQ:MSFT) in its second-quarter 2022 investor 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.”
You can also take a look at 10 Best Stagflation Stocks To Buy and 10 Best Cheap Technology Stocks To Buy.
