In this article, we will take a look at the 5 best low risk investments in 2023. To see more such companies, go directly to 17 Best Low Risk Investments in 2023.
5. UnitedHealth Group Inc. (NYSE:UNH)
Number of Hedge Fund Holders: 111
UnitedHealth Group Inc. (NYSE:UNH) remains one of the best low risk stocks to buy and hold. UnitedHealth Group Inc. (NYSE:UNH) is a behemoth in the healthcare services industry and has a strong dividend growth track records.
Out of the 910 hedge funds tracked by Insider Monkey, 111 funds had stakes in UnitedHealth Group Inc. (NYSE:UNH) as of the end of the second quarter of 2023.
4. Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Holders: 112
Alibaba Group Holding Limited (NYSE:BABA) is one of the best low risk investments in 2023 according to hedge funds. Alibaba Group Holding Limited (NYSE:BABA) recently said it will give access to its AI model to the general public in the “near future.” Reuters reported major companies including OPPO, Taobao, DingTalk and Zhejiang University have reached agreements with Alibaba Group Holding Limited (NYSE:BABA) to train their LLMs based on Tongyi Qianwen, Alibaba’s AI model.
As of the end of the second quarter of 2023, 112 hedge funds tracked by Insider Monkey had stakes in Alibaba Group Holding Limited (NYSE:BABA). The most significant stakeholder of the firm during this period was David Tepper’s Appaloosa Management LP which owns a $373 million stake in Alibaba Group Holding Limited (NYSE:BABA).
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.”
3. Activision Blizzard, Inc. (NASDAQ:ATVI)
Number of Hedge Fund Holders: 134
Activision Blizzard, Inc. (NASDAQ:ATVI) is a low risk investment amid the company’s long-term growth catalysts as well as due to strong chances it’s buyout by Microsoft Corporation (NASDAQ:MSFT) will be given a green light soon.
As of the end of second quarter of 2023, 134 hedge funds tracked by Insider Monkey had stakes in Activision Blizzard, Inc. (NASDAQ:ATVI). David Einhorn’s Greenlight Capital opened an $18.7 million stake in Activision Blizzard, Inc. (NASDAQ:ATVI) during the second quarter.
Here is what Aristotle Value Equity has to say about Activision Blizzard, Inc. (NASDAQ:ATVI) in its Q2 2023 investor letter:
“Headquartered in Santa Monica, California, Activision Blizzard is one of the largest video game companies in the world. The company develops and sells games that are played by nearly 400 million monthly active users across 190 countries. Activision Blizzard is a product of the 2008 merger of Activision, the console game maker, and Blizzard Entertainment, the PC game maker. In 2015, Activision Blizzard also acquired King Digital Entertainment, the developer of mobile games. The combined entities own some of the most well‐known franchises globally, including World of Warcraft, Call of Duty and Candy Crush. Together these three franchises account for roughly 80% of Activision Blizzard’s sales.
The company has successfully navigated multiple console cycles and, in recent years, has shifted its revenue mix away from physical sales toward more recurring sources. In 2013, roughly 70% of sales came from physical games, while today ~75% of sales come from subscriptions, in‐game content and advertising across mobile devices, consoles and PCs.
In early 2022, Microsoft—a current Value Equity holding—announced its intention to acquire Activision Blizzard. Our subsequent discussions with Sony, also a current holding, furthered our understanding that access to Activision Blizzard’s gaming franchises is critical for PlayStation, Xbox and the broader videogame industry. We do not attempt to predict regulatory approval of the transaction and instead view the company as an optimal investment regardless of whether the acquisition takes place…” (Click here to see the full text)
2. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 171
Visa Inc. (NYSE:V) is one of the low risk investments in the stock market in 2023 for long-term gains. Visa Inc. (NYSE:V) is already benefitting from the record rise in travel demand. Analysts believe when the economy gets back to normal and inflation pressures cool, payment giants like Visa Inc. (NYSE:V) will benefit more amid higher consumer demand. Visa Inc. (NYSE:V) has started talks with shareholders to potentially allow the company to conduct an exchange offer for its class B common stock.
As of the end of the second quarter of 2023, 171 hedge funds out of the 910 hedge funds tracked by Insider Monkey had stakes in Visa Inc. (NYSE:V). The biggest hedge fund stakeholder of Visa Inc. (NYSE:V) was Chris Hohn’s TCI Fund Management which owns a $4.2 billion stake in Visa Inc. (NYSE:V).
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 300
Microsoft Corporation (NASDAQ:MSFT) remains one of the best low risk investments in 2023 and beyond. Microsoft Corporation (NASDAQ:MSFT) is expected bear fruit of its AI investments in the coming months and years. Microsoft Corporation (NASDAQ:MSFT)’s Cloud business is growing and it remains a dominant player in the office enterprise industry.
Hedge funds are aware of the benefits of investing in Microsoft Corporation (NASDAQ:MSFT) as the company was the most popular stock among the 910 hedge funds in Insider Monkey’s database of 910 hedge funds.
Diamond Hill Large Cap Strategy made the following comment about Microsoft Corporation (NASDAQ:MSFT) in its Q2 2023 investor letter:
“Also among our leading contributors were software and IT services provider Microsoft Corporation (NASDAQ:MSFT) and health care facilities operator HCA Healthcare. Microsoft reported strong quarterly results and provided more favorable than expected commentary on near-term Azure (cloud platform) revenue growth. Investors had become concerned that Azure’s revenue growth could come under increased pressure in a weakening economy, but the combination of quarterly results and commentary about Azure’s future growth trajectory calmed concerns.”
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