In this piece, we’ll take a look at the top five quality stocks to buy now. For analysis on the quality factor strategy, the risk/reward, and methodology of this list, head on to 10 Best Quality Stocks to Buy Now.
5. Mastercard Incorporated (NYSE:MA)
Number of Hedge Fund Holders: 137
% of iShares MSCI USA Quality Factor ETF Holdings: 2.43%
In 2021, Mastercard Incorporated (NYSE:MA) handled close to $6 trillion in purchasing transactions, making it the second-largest payment processor in the world. Mastercard is accepted in more than 200 countries and handles transactions in more than 150 different currencies.
Despite the stock’s 5.8% year to date decline, Deutsche Bank analyst Bryan Keane has a Buy rating on Mastercard Incorporated (NYSE:MA) with a $440 price target. The company recently discussed the current trend in blockchain and crypto currencies and stated that despite the recent downturn in cryptocurrency values, the underlying blockchain technology is here to stay. Mastercard Incorporated (NYSE:MA) is looking to determine whether it can offer a simple consumer experience and ensure safety, while always remaining in regulatory compliance.
This stock was held by 137 hedge fund holders in our database at the end Q2 2022 and is therefore included in our list of 10 Best Quality Stocks to Buy Now. The stakes held by hedge funds in the stock collectively value over $14.9 billion. Akre Capital Management was the stock’s leading stakeholder in Q2, owning Mastercard Incorporated (NYSE:MA) shares worth over $1.8 billion.
4. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 153
% of iShares MSCI USA Quality Factor ETF Holdings: 1.74%
Alphabet Inc. (NASDAQ:GOOG) is a multinational technological conglomerate with headquarters in Mountain View, California. Google, the internet media powerhouse, is a completely owned subsidiary, and contributes to 99% of Alphabet’s income.
Alphabet Inc. (NASDAQ:GOOG) was held by 153 hedge fund holders in our database at the end of Q2 2022. The stakes held by hedge funds in the stock collectively value over $22.2 billion. TCI Fund Management was one of the stock’s leading stakeholders in Q2, owning Alphabet Inc. (NASDAQ:GOOG) shares worth over $5.4 billion.
L1 Capital International, an investment management company, mentioned Alphabet Inc. (NASDAQ:GOOG) in its second quarter 2022 investor letter. Here’s what they said:
“Alphabet Inc. (NASDAQ:GOOG) is by far the largest online advertising business globally, dominating Search outside of China and other protected markets. Online advertising is driven by eCommerce – not just buying online, but also omnichannel (for example, searching for a product online and then buying it instore).
Retail sales have consistently shifted online. Historically, eCommerce has increased its penetration of adjusted total U.S. retail sales by around 1% per annum. However, due to COVID-19 and associated lockdowns, eCommerce penetration stepped up by 5% in 2020 and now accounts for over 20% of adjusted retail sales (excluding food services, automotive and gas stations), up from 6% in 2010 (see Figure 6).
Alphabet has been a major beneficiary of COVID-19, with its advertising revenue increasing 43% to nearly US$210 billion in 2021. Naturally this level of growth is unsustainable particularly in a worsening macroeconomic environment and some retail activity is shifting back offline as people are less restricted by COVID-19. However, the established trend of increasing eCommerce penetration will not reverse, and we expect Alphabet’s advertising revenue to continue to increase, albeit after a period of muted growth in 2022 and 2023. There are also bright spots for Alphabet such as travel advertising, which is recovering strongly post COVID-19…”
3. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 166
% of iShares MSCI USA Quality Factor ETF Holdings: 2.29%
Visa Inc. (NYSE:V) is the world’s largest payment processor. It handled approximately $10 trillion in purchasing transactions in fiscal 2021. Visa Inc. (NYSE:V) operates in more than 200 countries and accepts payments in more than 160 currencies.
Visa Inc. (NYSE:V) was held by 166 hedge fund holders in our database at the end of Q2 2022 and is therefore included in our list of 10 Best Quality Stocks to Buy Now. The stakes held by hedge funds in the stock collectively value over $24 billion. TCI Fund Management was the stock’s leading stakeholder in Q2, owning Visa Inc. (NYSE:V) shares worth over $3.9 billion.
Here is what Baron Fintech Fund has to say about Visa Inc. (NYSE:V) in its Q2 2022 investor letter:
“The Fund’s holdings in the Payments and Information Services themes also contributed to relative performance. Within Payments, lower exposure to this lagging theme and outperformance of Visa, Inc. (NYSE:V). These global payment networks are viewed as safe havens during market downturns but are also benefiting from resilient payment volumes and a sharp rebound in international travel.”
2. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 184
% of iShares MSCI USA Quality Factor ETF Holdings: 3.13%
Meta Platforms, Inc. (NASDAQ:META) is the world’s biggest online social network, with 2.5 billion monthly active users. The ecosystem of Meta Platforms, Inc. (NASDAQ:META) comprises of the Facebook app, Instagram, Messenger, and WhatsApp. Advertising is the primary source of revenue for the company accounting for more than 90% of the firm’s total revenue.
Recently, Meta Platforms, Inc. (NASDAQ:META) agreed to settle a lawsuit accusing the social-media platform of granting other parties, including Cambridge Analytica, access to sensitive user data. In the joint petition, Meta Platforms, Inc. (NASDAQ:META) and the Facebook users suing the business stated that they had reached an agreement in principle but did not provide financial or other information.
Meta Platforms, Inc. (NASDAQ:META) was held by 184 hedge fund holders in our database at the end of Q2 2022 and is therefore included in our list of 10 Best Quality Stocks to Buy Now. The stakes held by hedge funds in the stock collectively value over $18.1 billion. Fisher Asset Management was one of the stock’s leading stakeholders in Q2, owning Meta Platforms, Inc. (NASDAQ:META) shares worth over $1.8 billion.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 258
% of iShares MSCI USA Quality Factor ETF Holdings: 3.35%
Microsoft Corporation (NASDAQ:MSFT) creates and licenses consumer and corporate enterprise software. It is well-known for its Windows operating systems and Office productivity suite. The corporation is divided into three equally sized major business segments: productivity and business processes, intelligence cloud, and personal computing.
Novo Nordisk (NYSE:NVO) and Microsoft Corporation (NASDAQ:MSFT) recently established a new strategic partnership that would integrate Microsoft’s computational services, cloud, and artificial intelligence capabilities with Novo Nordisk’s medication research, development, and data science skills. Microsoft is offering AI technology, fundamental scientific models, and knowledge through the agreement, and is collaborating with Novo Nordisk’s data scientists and domain specialists from early research and development areas to expedite Novo Nordisk’s R&D.
Microsoft Corporation (NASDAQ:MSFT) was held by 258 hedge fund holders in our database at the end of Q2 2022 and ranks #1 on our list of 10 Best Quality Stocks to Buy Now. The stakes held by hedge funds in the stock collectively value over $56 billion. Fisher Asset Management was the stock’s leading stakeholder in Q2, owning Microsoft Corporation (NASDAQ:MSFT) shares worth over $7.3 billion.
You can also take a look at 5 EV Stocks to Invest In and 5 Dividend Stocks to Buy According to Billionaire Carl Icahn’s Icahn Capital LP.
