In this article, we will look at the 5 best Motley Fool stocks to buy now. If you want to explore similar stocks, you can go to 11 Best Motley Fool Stocks To Buy Now.
5. Watsco, Inc. (NYSE:WSO)
Motley Fool Asset Management’s Stake Value: $39,025,000
Percentage of Motley Fool Asset Management’s 13F Portfolio: 3.67%
Number of Hedge Fund Holders: 25
Watsco, Inc. (NYSE:WSO) is one of the world’s largest distributors of HVAC systems and products. On October 4, Watsco, Inc. (NYSE:WSO) declared a quarterly cash dividend of $2.20 per share. The dividend is payable on October 31 to investors of record on October 17. As of October 7, the stock is offering a forward dividend yield of 3.40% and the company has free cash flows of over $307 million. As of June 30, Motley Fool Asset Management owns over 150,000 shares of Watsco, Inc. (NYSE:WSO) and has a stake of $39 million in the company.
On October 17, Deutsche Bank analyst Joe Ahlersmeyer started coverage of Watsco, Inc. (NYSE:WSO) with a Hold rating and a $311 price target. On September 6, KeyBanc analyst Jeffrey Hammond raised his price target on Watsco, Inc. (NYSE:WSO) to $310 from $300 and maintained a buy-side Overweight rating on the shares.
At the end of Q2 2022, 25 hedge funds were bullish on Watsco, Inc. (NYSE:WSO) and held stakes worth $257.4 million in the company. Motley Fool Asset Management is one of the largest shareholders in the company.
4. Microsoft Corporation (NASDAQ:MSFT)
Motley Fool Asset Management’s Stake Value: $46,521,000
Percentage of Motley Fool Asset Management’s 13F Portfolio: 4.37%
Number of Hedge Fund Holders: 258
On September 20, Microsoft Corporation (NASDAQ:MSFT) declared a quarterly cash dividend of $0.68 per share, up 10% from its prior dividend of $0.62 per share. The dividend is payable on December 8 to stockholders of record on November 17. As of October 7, the company is offering a forward dividend yield of 1.16% and has free cash flows of over $65 billion. Microsoft Corporation (NASDAQ:MSFT) is one of the best Motley Fool stocks to buy now.
On September 29, Raymond James analyst Andrew Marok resumed coverage of Microsoft Corporation (NASDAQ:MSFT) with a buy-side Outperform rating and his $300 price target. This September, Wells Fargo analyst Michael Turrin maintained his buy-side Overweight rating $350 price target on Microsoft Corporation (NASDAQ:MSFT).
At the close of Q2 2022, 258 hedge funds were long Microsoft Corporation (NASDAQ:MSFT) and held stakes worth $56 billion in the company. Of those, $46.5 million were of Motley Fool Asset Management. The investment covers 4.37% of the fund’s 13F portfolio.
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.”
3. Amazon.com, Inc. (NASDAQ:AMZN)
Motley Fool Asset Management’s Stake Value: $50,991,000
Percentage of Motley Fool Asset Management’s 13F Portfolio: 4.79%
Number of Hedge Fund Holders: 252
Analysts like Amazon.com, Inc. (NASDAQ:AMZN). On September 29, Citi analyst Ronald Josey reiterated his Buy rating and $185 price target on Amazon.com, Inc. (NASDAQ:AMZN) and also said that the stock continues to remain his top pick. On October 3, BofA analyst Justin Post revised his price target on Amazon.com, Inc. (NASDAQ:AMZN) to $157 from $170 and maintained a Buy rating on the shares. On October 4, JPMorgan analyst Doug Anmuth reiterated Amazon.com, Inc. (NASDAQ:AMZN) as his best idea.
At the end of Q2 2022, 252 hedge funds held stakes in Amazon.com, Inc. (NASDAQ:AMZN). The total value of these stakes amounted to $30 billion in the company. As of June 30, Motley Fool Asset Management’s stakes in Amazon.com, Inc. (NASDAQ:AMZN) sit at $50.99 million, and the stock is one of the best Motley Fool stocks to buy now.
Here is what Lakehouse Capital had to say about Amazon.com, Inc. (NASDAQ:AMZN) in its second-quarter 2022 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN) proved resilient in the face of ongoing macro pressures and delivered a strong quarterly result along with “better-than-feared” guidance for the third quarter. Net sales increased 7% year-on-year (10% constant currency) to $121.2 billion, while operating profit declined 57% to $3.3 billion. The drop in operating profit was attributable not only to external macro factors, such as elevated shipping and fuel costs, but also lower productivity and efficiency costs as a result of some overcapacity on the back of its recent investment cycle. It was pleasing to see that the company has begun to make progress on the more controllable costs, particularly productivity and staffing, with headcount, for example, down almost 100,000 over the quarter. We continue to believe Amazon is well positioned to manage these short-term issues and remains on track to deliver significant profit improvements over the next twelve months.
Management also confirmed that they have not seen any deterioration in Prime membership growth or retention following the 17% increase in Prime fees put through earlier in the year. This is not surprising to us, as in our view, the price increase was more than justified given the tremendous amount of customer value that has been added since the last price increase was implemented back in 2018, which includes the doubling of its fulfilment network and workforce, significant expansion of free same-day delivery and considerable investments in video and music content. Ultimately, we remain positive about Amazon’s future and believe that the company’s scale and market leadership will continue to drive growth for many years to come.”
2. Apple Inc. (NASDAQ:AAPL)
Motley Fool Asset Management’s Stake Value: $54,062,000
Percentage of Motley Fool Asset Management’s 13F Portfolio: 5.08%
Number of Hedge Fund Holders: 128
Apple Inc. (NASDAQ:AAPL) is ranked among the top five holdings of Motley Fool Asset Management and the stock is one of the best Motley Fool stocks to buy now. As of June 30, Motley Fool Asset Management’s stakes in Apple Inc. (NASDAQ:AAPL) are valued at $54 million. The investment covers 5.08% of the fund’s 13F portfolio.
On September 29, Rosenblatt analyst Barton Crockett raised his price target on Apple Inc. (NASDAQ:AAPL) to $189 from $160 and upgraded the stock to Buy from Neutral. On September 30, Evercore ISI analyst Amit Daryanani maintained his buy-side Outperform rating and $190 price target on Apple Inc. (NASDAQ:AAPL). This October, JPMorgan analyst Samik Chatterjee maintained his buy-side Overweight rating on Apple Inc. (NASDAQ:AAPL).
At the close of Q2 2022, 128 hedge funds were eager on Apple Inc. (NASDAQ:AAPL). The total stakes of these hedge funds amounted to $143 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.”
1. Alphabet Inc. (NASDAQ:GOOG)
Motley Fool Asset Management’s Stake Value: $54,083,000
Percentage of Motley Fool Asset Management’s 13F Portfolio: 5.08%
Number of Hedge Fund Holders: 153
Alphabet Inc. (NASDAQ:GOOG) is Motley Fool Asset Management’s top 13F holding. As of October 7, the stock is trading at a PE multiple of 18x and has a trailing twelve-month operating margin of roughly 30%. The company has solid free cash flows of $65 billion and is one of the best Motley Fool stocks that is attractively valued and profitable.
Wall Street likes Alphabet Inc. (NASDAQ:GOOG). On August 3, Tigress Financial analyst Ivan Feinseth reiterated his Strong Buy rating on Alphabet Inc. (NASDAQ:GOOG) and raised his price target the shares to $186 from $183. This October, BofA analyst Justin Post revised his price target on Alphabet Inc. (NASDAQ:GOOG) to $114 from $125 and reiterated a Buy rating on the shares.
At the end of Q2 2022, 153 hedge funds were long Alphabet Inc. (NASDAQ:GOOG) and held stakes of over $22 billion in the company.
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.”
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