5 Best Slow Growth Stocks to Buy According to Hedge Funds

In this article, we discuss the 5 best slow growth stocks to buy according to hedge funds. If you want to read about some more slow growth stocks, go directly to 10 Best Slow Growth Stocks to Buy According to Hedge Funds.

5. Datadog, Inc. (NASDAQ:DDOG)

Number of Hedge Fund Holders: 81     

Datadog, Inc. (NASDAQ:DDOG) provides a monitoring and analytics platform for developers, information technology operations teams, and business users in the cloud in North America and internationally. It is one of the best growth stocks to invest in. On October 19, Datadog stated the general availability of Cloud Cost Management. Cloud Cost Management is used to show an organization’s cloud spending in the context of their observability data. Now FinOps and engineering teams can automatically attribute spending to applications, teams and services. 

On October 20, BTIG analyst Gray Powell maintained a Buy rating on Datadog, Inc. (NASDAQ:DDOG) stock and lowered the price target to $104 from $137, noting that elevated concerns on the potential for a weakening economic environment would drive a slowdown in spending growth of the firm.

At the end of the second quarter of 2022, 81 hedge funds in the database of Insider Monkey held stakes worth $2.7 billion in Datadog, Inc. (NASDAQ:DDOG), compared to 82 in the previous quarter worth $4.9 billion.

In its Q1 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Datadog, Inc. (NASDAQ:DDOG) was one of them. Here is what the fund said:

“Another example is Datadog, Inc. (NASDAQ:DDOG), the leading infrastructure monitoring, application performance monitoring and log management software platform. Datadog’s stock declined 15% during the quarter, despite reporting sparkling operational results, with revenues accelerating to a growth rate of 84% year-over-year with 33% free cash flow margins while guiding for 2022 significantly above expectations. Datadog added 4,600 new customers in the quarter while existing customers continued to increase their spending on Datadog products at a rapid pace with the number of customers using four or more products increasing to 33% from 22% last year. While Datadog’s stock was down, its intrinsic value has undoubtedly increased. This is enabled by rapid innovation (Datadog released 13 new products in 2021) into a market that is benefiting from the secular growth in the cloud, digital transformation, and the explosion in complexity as the number of vendors, diversity of technologies and related infrastructure continued to expand.”

4. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 128     

Apple Inc. (NASDAQ:AAPL) designs, manufactures and markets smartphones, personal computers, tablets, wearables, and accessories. It is one of the top growth stocks to invest in. On October 20, Apple cut prices on refurbished units of some older iPad models alongside the introduction of updates for the iPad Pro and iPad lines. The company also reduced refurbished prices for some other product lines.

On October 17, Morgan Stanley analyst Erik Woodring maintained an Overweight rating on Apple Inc. (NASDAQ:AAPL) stock and lowered the price target to $177 from $180, noting that company valuation multiples are lowered amid a challenging setup for Q3.

At the end of the second quarter of 2022, 128 hedge funds in the database of Insider Monkey held stakes worth $143 billion in Apple Inc. (NASDAQ:AAPL), compared to 131 in the previous quarter worth $182 billion.

In its Q2 2022 investor letter, Alger Capital, an asset management firm, highlighted a few stocks and Apple Inc. (NASDAQ:AAPL) was one of them. Here is what the fund said:

“Apple Inc. (NASDAQ:AAPL) is a leading technology provider in telecommunications. computing and services. Apple’s iOS operating system is the company’s unique intellectual property and competitive strength. This software drives extremely tight engagement with consumers and enterprises. The engagement is fostering the growing purchase of high-margin services like music, apps, and apple pay. Apple’s shares detracted from performance as management lowered its guidance for the second quarter due to headwinds from the war in Ukraine, adverse foreign currency shifts, and dampened consumer demand associated with the coronavirus in China. Additionally, many investors were concerned that lockdowns implemented to curtail the spread of COVID-19 would impact the production of apple products, however, the manufacturing facilities have resumed activity.”

3. Mastercard Incorporated (NYSE:MA)

Number of Hedge Fund Holders: 137    

Mastercard Incorporated (NYSE:MA) is a technology company that provides transaction processing and other payment-related products and services. It is one of the elite growth stocks to invest in. On October 20, Mastercard noted the expansion of its partnership with Jack Henry, a payment processing service provider and technology company, to enable banks and credit unions to provide their account holders with the ability to securely see all of their financial accounts in one place. 

On October 19, Jefferies analyst Trevor Williams maintained a Buy rating on Mastercard Incorporated (NYSE:MA) stock and lowered the price target to $350 from $410, noting that the company expects a bigger Q3 beat.

At the end of the second quarter of 2022, 137 hedge funds in the database of Insider Monkey held stakes worth $14.99 billion in Mastercard Incorporated (NYSE:MA), compared to 136 in the previous quarter worth $15.4 billion.

In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Mastercard Incorporated (NYSE:MA) was one of them. Here is what the fund said:

“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 Mastercard Incorporated (NYSE:MA) added the most value. 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. Visa Inc. (NYSE:V)

Number of Hedge Fund Holders: 166  

Visa Inc. (NYSE:V) operates as a payments technology company worldwide. It is one of the premier growth stocks to invest in. On October 20, Current, a leading US financial technology platform, stated an announcement that it has successfully migrated to the Visa DPS Forward platform with seamless migration of over four million accounts. This integration will allow a deeper partnership between both companies.

On October 19, Jefferies analyst Trevor Williams maintained a Buy rating on Visa Inc. (NYSE:V) stock and lowered the price target to $220 from $250, noting that the company’s initial FY23 outlook is likely to push estimates lower.  

At the end of the second quarter of 2022, 166 hedge funds in the database of Insider Monkey held stakes worth $24 billion in Visa Inc. (NYSE:V), compared to 159 in the preceding quarter worth $28 billion.

In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Visa Inc. (NYSE:V) was one of them. Here is what the fund said:

“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.”

1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 258     

Microsoft Corporation (NASDAQ:MSFT) develops, licenses, supports software, services, devices, and solutions worldwide. It is one of the major growth stocks to invest in. On October 20, Microsoft was said to be in advanced discussions for a new funding round for OpenAI. No agreement has been reached and the funding amount could be changed. On October 17, Microsoft confirmed the cutdown of 1,000 employees from its different companies like Xbox and Azure.

On October 20, UBS analyst Karl Keirstead maintained a Buy rating on Microsoft Corporation (NASDAQ:MSFT) stock and lowered the price target to $300 from $330, noting that the company reduced its constant-currency revenue growth estimate to 12.2% from 12.6%.

At the end of the second quarter of 2022, 258 hedge funds in the database of Insider Monkey held stakes worth $56 billion in Microsoft Corporation (NASDAQ:MSFT), compared to 259 in the previous quarter worth $65.6 billion.

In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Microsoft Corporation (NASDAQ:MSFT) was one of them. Here is what the fund said:

“Shares of Microsoft Corporation (NASDAQ:MSFT), a leading global provider of software solutions, declined 16.6% in the quarter along with the broader software group as well as due to growing concerns of a potential macro-driven slowdown. This is despite the company posting strong quarterly financial results and successfully absorbing headwinds from the war in Ukraine. The company had 21% revenue growth, 23% operating income growth, and 35% growth in Microsoft Cloud (all year-over-year in constant currency), which now represents 47% of total revenues. (read more…)

You can also take a peek at 10 Best Bargain Stocks To Buy Right Now and 10 Best Infrastructure Stocks To Buy Now.

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