In this article, we will take a look at the 5 best magic formula stocks to buy now. To see more such companies, go directly to 11 Best Magic Formula Stocks to Buy Now.
5. Amazon.com, Inc. (NASDAQ:AMZN)
Joel Greenblatt’s Stake Value: $29.9 million
Amazon.com, Inc. (NASDAQ:AMZN) is one of the most popular stocks among the 943 hedge funds tracked by Insider Monkey. As of the end of the first quarter of 2023, 243 hedge funds in Insider Monkey’s database held stakes in Amazon.com, Inc. (NASDAQ:AMZN). The most notable stakeholder of Amazon.com, Inc. (NASDAQ:AMZN) during this period was Joel Greenblatt with a stake worth about $30 million in Amazon.
In a recent interview with CNBC, Amazon.com, Inc. (NASDAQ:AMZN)’s Chief Executive Officer Andy Jassy said that Amazon is delivering packages faster and that would give the company an edge in the market. Jassy is also bullish on Amazon Prime and AWS.
BofA recently named its top growth stock picks for July and Amazon made it to the list.
4. Alphabet Inc. (NASDAQ:GOOG)
Joel Greenblatt’s Stake Value: $41.9 million
Alphabet Inc. (NASDAQ:GOOG) ranks 4th in our list of the best magic formula stocks to buy now. Joel Greenblatt has a $42 million stake in Alphabet Inc. (NASDAQ:GOOG). Recently, it was reported that Alphabet Inc. (NASDAQ:GOOG) delayed its plans to launch its own chips for Pixel smartphones by at least a year. Alphabet Inc. (NASDAQ:GOOG) will keep using Samsung chips for now.
A total of 204 hedge funds in Insider Monkey’s database reported owning stakes in Alphabet Inc. (NASDAQ:GOOG) as of the end of the first quarter of 2023.
Madison Investors Fund made the following comment about Alphabet Inc. (NASDAQ:GOOG) in its second quarter 2023 investor letter:
“In the second quarter, the top five contributors to performance were Alphabet Inc. (NASDAQ:GOOG), Copart, Alcon, Parker-Hannifin, and PACCAR. Last quarter, we discussed our view on Alphabet and how they are positioned against the competitive threat from artificial intelligence technology. During the quarter, Alphabet made a series of announcements demonstrating how they are incorporating AI into their existing services as well as new products. While the market seems to be coming around to our point of view, we remain on the lookout for any incremental technological developments.”
3. Apple Inc. (NASDAQ:AAPL)
Joel Greenblatt’s Stake Value: $50.5 million
Joel Greenblatt’s hedge fund has a $50.5 million stake in Apple Inc. (NASDAQ:AAPL) as of the end of the first quarter of 2023. Consumers around the world continue to favor Apple Inc. (NASDAQ:AAPL)’s iPhone product line, defying analyst expectations of a slowdown in iPhone sales. Last month, the 6.18 sales event in China saw a slow response from customers, but Apple Inc. (NASDAQ:AAPL) beat all expectations with an 8% YoY jump in sales amid lack of competition, according to Counterpoint Research.
As of the end of the first quarter of 2023, 131 hedge funds tracked by Insider Monkey had stakes in Apple Inc. (NASDAQ:AAPL). The biggest stakeholder of Apple Inc. (NASDAQ:AAPL) during this period was Warren Buffett’s Berkshire Hathaway which had a $151 billion stake in the company.
2. Microsoft Corporation (NASDAQ:MSFT)
Joel Greenblatt’s Stake Value: $55.3 million
Microsoft Corporation (NASDAQ:MSFT) has been dominating the news cycle ever since the company’s investments in OpenAI were disclosed as the company is proactively leading the AI revolution that started with the launch of ChatGPT.
Earlier this month, analysts at Wedbush praised Microsoft Corporation (NASDAQ:MSFT)’s AI monetization and Cloud efforts and said that still less than 50% of workloads have moved to the Cloud and the company is in an “enviable” position to benefit from the growth in the Cloud markets.
Microsoft Corporation (NASDAQ:MSFT) is the most popular stock among the 943 hedge funds tracked by Insider Monkey. Joe Greenblatt has a $55 million stake in Microsoft Corporation (NASDAQ:MSFT) as of the end of the first quarter of 2023.
1. Snowflake Inc. (NYSE:SNOW)
Joel Greenblatt’s Stake Value: $60.3 million
Cloud company Snowflake Inc. (NYSE:SNOW) is the biggest holding of Joel Greenblatt. The investor has a $60 million stake in Snowflake Inc. (NYSE:SNOW). Snowflake Inc. (NYSE:SNOW) shares have gained about 25% year to date through July 11.
As of the end of the first quarter of 2023, 63 hedge funds tracked by Insider Monkey had stakes in Snowflake Inc. (NYSE:SNOW). The biggest stakeholder of Snowflake Inc. (NYSE:SNOW) during this period was Altimeter Capital Management of Brad Gerstner which owns a $2.4 billion stake in the company. The second biggest stakeholder of Snowflake Inc. (NYSE:SNOW) is Warren Buffett’s Berkshire with a $945 million stake in the company.
Last month, Snowflake Inc. (NYSE:SNOW) jumped after William Blair analyst Jason Ader started covering the stock with an Outperform rating, saying the company is a leader in the analytical database market and its product is the “easiest to use.”
Ithaka US Growth Strategy made the following comment about Snowflake Inc. (NYSE:SNOW) in its first quarter 2023 investor letter:
“Snowflake Inc. (NYSE:SNOW) is a dominant player in the Data Warehousing market, offering customers the ability to break down data silos and derive value from rapidly growing data sets through Snowflake’s analytical database product, the Data Cloud. The company’s base business is benefitting from a number of secular tailwinds, the three most prevalent being: 1) data-driven decision making, 2) cloud adoption, and 3) the exponential growth of corporate data. The company’s visionary management team, headed by industry veteran Frank Slootman, plans to capture its fair share of this growth through: 1) executing on its land and expand model, 2) acquiring new customers, 3) growing internationally, and 4) expanding its nascent partner network. The stock’s negative contribution in the quarter was due to the timing of Ithaka’s purchase (mid-February) and its small portfolio weighting (100bps).”
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