In this article, we discuss 5 best low risk stocks to buy in 2022. If you want to see more stocks in this selection, check out 11 Best Low Risk Stocks To Buy In 2022.
5. Danaher Corporation (NYSE:DHR)
Number of Hedge Fund Holders: 82
Beta Value: 0.87
Danaher Corporation (NYSE:DHR) manufactures and markets professional, medical, industrial, and commercial products and services worldwide. The company operates through three segments – Life Sciences, Diagnostics, and Environmental & Applied Solutions. On October 20, Danaher Corporation (NYSE:DHR) posted Q3 non-GAAP earnings per share of $2.56 and a revenue of $7.66 billion, outperforming market consensus by $0.31 and $490 million, respectively. For the full year 2022, Danaher Corporation (NYSE:DHR) is raising its forecast for non-GAAP core revenue growth to the high-single digit percent range. Danaher Corporation (NYSE:DHR) is one of the best low risk stocks for 2022.
On October 21, JPMorgan analyst Rachel Vatnsdal maintained an Overweight rating on Danaher Corporation (NYSE:DHR) but lowered the price target on the stock to $315 from $350. The company posted “strong” Q3 results and reiterated its 2022 base business core growth guide, the analyst told investors. However, the primary takeaway from the earnings report was confusion around the bioprocessing growth framework for 2023 after mixed commentary around COVID-related customer dynamics, said the analyst. The analyst views the post-earnings selloff as dramatic.
According to Insider Monkey’s data, 82 hedge funds were long Danaher Corporation (NYSE:DHR) at the end of Q2 2022, compared to 83 funds in the last quarter. Ken Fisher’s Fisher Asset Management held the leading position in the company, comprising 3.8 million shares worth over $973 million.
Here is what Cooper Investors Global Equities Fund has to say about Danaher Corporation (NYSE:DHR) in its Q3 2022 investor letter:
“Spin-offs have been a valuable source of uncorrelated return for the portfolio since inception, whether investing in them directly or retaining ownership stakes in the spun-off assets of existing holdings. During the quarter Danaher announced the spin of its Environmental & Applied Solutions group (EAS) expected to close in late 2023. Danaher have been masters of the spin over the last decade and once again this one appears to make sense for both parties. The parent becomes a pure-play life sciences and diagnostics business with higher growth, margins and returns plus more M&A firepower. EAS, with leading positions in water quality through assets like Hach, ChemTreat and Trojan will, as a standalone business, have a more focused M&A strategy and represent an attractive water-related exposure for ESG focused funds. The spinco will still operate with the highly regarded Danaher Business System though (like ‘Fortive Business System’) we expect this to get rebranded while still delivering outstanding financial results.”
4. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 83
Beta Value: 0.56
Johnson & Johnson (NYSE:JNJ) is an American multinational company operating in the healthcare sector worldwide. On October 20, Johnson & Johnson (NYSE:JNJ)’s Health Care Systems DePuy Synthes was awarded a $244.31 million fixed-price, ID/IQ contract for orthopedic procedural packages and supplies. This is a one-year base contract with four one-year option periods. The ordering period will conclude on October 19, 2023. Johnson & Johnson (NYSE:JNJ) will serve the Army, Navy, Air Force, Marine Corps, and federal civilian agencies. The Defense Logistics Agency initiated the contract. Johnson & Johnson (NYSE:JNJ) is one of the premier low risk stocks to buy in 2022.
On October 19, Bernstein analyst Lee Hambright maintained a Market Perform rating on Johnson & Johnson (NYSE:JNJ) but lowered the price target on the shares to $190 from $194. The analyst noted that Johnson & Johnson (NYSE:JNJ) announced solid Q3 results as sales grew 8.2% organically to $23.8 billion. Both sales and adjusted EPS beat consensus by 2% despite forex pressures and ongoing macroeconomic challenges, added the analyst, who also highlighted that macro pressures eased somewhat.
According to Insider Monkey’s data, 83 hedge funds were long Johnson & Johnson (NYSE:JNJ) at the end of the second quarter of 2022, and Rajiv Jain’s GQG Partners is the leading position holder in the company, with 6.6 million shares worth $1.16 billion.
In its Q2 2022 investor letter, Mayar Capital, an asset management firm, highlighted a few stocks and Johnson & Johnson (NYSE:JNJ) was one of them. Here is what the fund said:
“Johnson & Johnson (NYSE:JNJ) is currently our largest position and a long-standing holding. The majority of the group’s sales comes from its collection of pharmaceutical franchises, but a large majority (~45%) comes from its collection of medical device businesses and its consumer brands.
Here’s how JNJ makes and spends a dollar of revenues: As of 2021, about 55 cents of that dollar comes from its pharmaceutical sales – sales of drugs to pharmacies and distributors – while 30 cents come from the sale of medical devices, such as surgery equipment and orthopedics. The rest of that dollar in sales comes from sales of JNJ’s consumer brands such as Listerine mouthwash, Nicorette nicotine tablets and Neutrogena cosmetics (…read more)
3. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 91
Beta Value: 0.75
UnitedHealth Group Incorporated (NYSE:UNH) operates as a diversified healthcare company in the United States. It operates through four segments – UnitedHealthcare, Optum Health, Optum Insight, and Optum Rx. On October 14, the company reported Q3 non-GAAP earnings per share of $5.79 and a revenue of $80.9 billion, topping market estimates by $0.35 and $360 million, respectively. The company raised its full year 2022 net earnings outlook to $20.85-$21.05 per share and adjusted net earnings to $21.85-$22.05 per share, compared to a consensus of $21.89 and prior view of $21.4-$21.9.
On October 18, Deutsche Bank analyst George Hill raised the price target on UnitedHealth Group Incorporated (NYSE:UNH) to $615 from $569 and reiterated a Buy rating on the shares. The company announced strong Q3 results on the back of robust membership growth and expanding value-based arrangements, the analyst told investors in a research note.
According to Insider Monkey’s Q2 data, UnitedHealth Group Incorporated (NYSE:UNH) was part of 91 hedge fund portfolios, compared to 103 funds in the earlier quarter. Boykin Curry’s Eagle Capital Management is a prominent stakeholder of the company, with 2.8 million shares worth $1.5 billion.
Here is what Carillon Tower Advisers specifically said about UnitedHealth Group Incorporated (NYSE:UNH) in its Q2 2022 investor letter:
“UnitedHealth Group Incorporated (NYSE:UNH) reported solid quarterly results and raised 2022 guidance modestly. Additionally, managed care is another industry that is viewed as defensive in the current environment, which helped support UnitedHealth and its peer group.”
2. Berkshire Hathaway Inc. (NYSE:BRK-B)
Number of Hedge Fund Holders: 109
Beta Value: 0.90
Berkshire Hathaway Inc. (NYSE:BRK-B) is an Omaha-based company engaged in the insurance, freight rail transportation, and utility businesses worldwide. On October 14, Berkshire Hathaway Inc. (NYSE:BRK-B) announced that it has received all regulatory approvals for the proposed $11.6 billion acquisition of Alleghany. The transaction was concluded on October 19, 2022. Berkshire Hathaway Inc. (NYSE:BRK-B) is one of the best low risk bets for 2022.
On September 21, investment advisory Edward Jones upgraded Berkshire Hathaway Inc. (NYSE:BRK-B) to Buy from Hold. Analyst James Shanahan issued the ratings update.
According to Insider Monkey’s data, 109 hedge funds were long Berkshire Hathaway Inc. (NYSE:BRK-B) at the end of the second quarter of 2022, compared to 104 funds in the prior quarter. Michael Larson’s Bill & Melinda Gates Foundation Trust is the leading position holder in the company, with 34.6 million shares worth $9.5 billion.
Here is what Black Bear Value Fund has to say about Berkshire Hathaway Inc. (NYSE:BRK-A) in its Q3 2022 investor letter:
“Going forward I expect Berkshire to compound at above average returns from this price. BRK is a collection of high-quality businesses, excellent management, and a good amount of optionality in their cash position. If the cash were to be deployed accretively, the true value would be greater than an 8% premium (as mentioned above). The combination of a pie that is growing, an increasing share of said pie due to stock buybacks, upside optionality from cash and a tight range of likely business outcomes that span a variety of economic futures gives me comfort in continuing to own Berkshire.”
1. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 166
Beta Value: 0.92
Visa Inc. (NYSE:V), an American multinational payments technology firm, is one of the most notable low risk stocks to invest in. On October 19, Visa Inc. (NYSE:V) announced that it has partnered with business-to-business payments firm Thunes to allow individuals and small businesses t0 transfer money globally to 78 digital wallet providers. That enables Visa Direct to reach almost 7 billion endpoints, including over 3 billion cards, more than 2 billion accounts, and 1.5 billion digital wallets.
On October 19, Jefferies analyst Trevor Williams maintained a Buy recommendation on Visa Inc. (NYSE:V) but slashed the price target on the shares to $220 from $250. Though he expects a larger Q3 beat from MasterCard, he prefers Visa Inc. (NYSE:V) into Q3 earnings reports from the payments processors, the analyst told investors in an earnings preview note. He also sees more valuation support at Visa Inc. (NYSE:V).
According to Insider Monkey’s data, 166 hedge funds held stakes worth $24 billion in Visa Inc. (NYSE:V) at the end of June 2022, compared to 159 funds in the prior quarter worth $28 billion. Chris Hohn’s TCI Fund Management is the biggest stakeholder of the company, with nearly 20 million shares valued at $4 billion.
Here is what Wedgewood Partners specifically said about Visa Inc. (NYSE:V) in its Q3 2022 investor letter:
“Visa Inc. (NYSE:V) continues to report strong double-digit growth in payment volumes throughout the first two months of the calendar third quarter. The stock suffered after concerns about potential adverse legislation related to its credit card routing practices began to surface. Similar legislation related to the Company’s debit routing practices was passed into law back in 2010. Not unlike the previous legislation, the Company’s value proposition to merchants, consumers and bank-issuing customers and acquirers is robust enough to help blunt the potential effects the legislation might have in the near term. Over a multiyear time horizon, it would be quite difficult for any currently non-existent or even sub-scale credit routing network to add the value that Visa (or MasterCard) can already add today.”
You can also take a look at 10 Cheap Insurance Stocks To Buy and 11 Best High Beta Stocks To Buy Now.
