In this article, we discuss the 5 best stocks in each sector. To read the detailed analysis of how the sectors performed in 2023, go directly to the 12 Best Stocks In Each Sector.
5. Thermo Fisher Scientific Inc. (NYSE:TMO)
Market Sector: Healthcare
Number of Hedge Fund Holders: 109
Thermo Fisher Scientific Inc. (NYSE:TMO) is a biotech company that was founded after the merger of Thermo Electron and Fisher Scientific. The corporation offers medical equipment, analytical instruments, reagents and consumables, software, solutions, and related services.
On November 21, Thermo Fisher Scientific Inc. (NYSE:TMO) announced that it had agreed to partner with EDX Medical Group for multiple projects for the development and possible commercialization of several proprietary qPCR assays, tools to carry out the presence of mutant genes.
On November 14, Thermo Fisher Scientific Inc. (NYSE:TMO) reported the authorization for the repurchase of $4 billion worth of shares of its common stock, which will replace the ongoing repurchase authorization, of which $1 billion was left.
Thermo Fisher Scientific Inc. (NYSE:TMO) was mentioned in Weitz Investment Management’s second-quarter 2023 investor letter. Here is what it said:
“Portfolio activity this quarter included opportunistically initiating a position in life sciences tool and equipment maker Thermo Fisher Scientific Inc. (NYSE:TMO), a long-time holding of other Weitz portfolios, at an attractive valuation.”
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4. Visa Inc. (NYSE:V)
Market Sector: Financial Services
Number of Hedge Fund Holders: 167
Visa Inc. (NYSE:V) is the world’s biggest payment processing company that offers electronic funds transfer through its branded credit cards, debit cards, and prepaid cards.
On October 30, Mizuho increased the price target to $243 from $240 on Visa Inc. (NYSE:V)’s stock while keeping a Neutral rating. The firm mentioned that there was a decline in the company’s US volume growth as a percent of incremental personal consumption expenditures.
On October 24, Visa Inc. (NYSE:V) raised its quarterly dividend by 15.6% to $0.52. The dividend yield of the company was 0.825% on November 22.
Ensemble Capital Management mentioned Visa Inc. (NYSE:V) in its third quarter 2023 investor letter. Here is what it said:
“Mastercard is a company that pretty much everyone has heard of. In fact, when we meet with Ensemble’s clients, we occasionally tell them that we’re nearly certain that they are carrying a Mastercard in their wallet or purse as we speak, and if not, they are carrying a Visa Inc. (NYSE:V). Most people carry both.
People carry Mastercard and Visa because they are accepted nearly everywhere in developed markets. And they are accepted in most emerging economies, at least at locations where higher income people spend money. As a shopper you can show up at a bodega in Peru, a high end hotel in Tokyo, a truck stop in Alabama, or an ice cream cart in Milan, show them a piece of plastic and they’ll let you walk away with goods and services without any worry that they aren’t going to get paid…” (Click here to read the full text)
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3. Meta Platforms, Inc. (NASDAQ:META)
Market Sector: Communication Services
Number of Hedge Fund Holders: 234
Meta Platforms, Inc. (NASDAQ:META) is sometimes confused with being in the information technology sector due to the company being a part of American Big Five tech, but most of its revenues are generated through advertising.
In the third quarter, according to Insider Monkey’s database, the number of hedge funds with a stake in Meta Platforms, Inc. (NASDAQ:META) went up to 234 from 225 in the previous quarter. The biggest shareholder of the company was Rajiv Jain’s GQG Partners, which increased its investment in the stock by 33% to 11.137 million shares worth $3.34 billion.
On November 22, Tigress Financial analyst Ivan Feinseth raised the price target to $435 from $380 on Meta Platforms, Inc. (NASDAQ:META)’s stock and upgraded the rating from Buy to Strong Buy.
Meta Platforms, Inc. (NASDAQ:META) was mentioned in Weitz Investment Management’s third-quarter 2023 investor letter. Here is what it said:
“As for other quarterly contributors, Alphabet, Inc., (GOOG) and Meta Platforms, Inc. (NASDAQ:META) added to their exceptional year-to-date returns. Meta Platforms and Alphabet were the true year-to-date standouts. After steep declines in 2022, both stocks rebounded sharply due to a combination of solid fundamentals, disciplined operational execution, and improved sentiment. Despite outsized gains and attention, we think both Alphabet and Meta remain undervalued.”
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2. Amazon.com, Inc. (NASDAQ:AMZN)
Market Sector: Consumer Cyclical
Number of Hedge Fund Holders: 286
Similar to META, Amazon.com, Inc. (NASDAQ:AMZN) is also one of the American Big Five tech companies. Its main revenue source is online retail, which puts the company in the consumer cyclical sector.
On November 23, Reuters reported that Amazon.com, Inc. (NASDAQ:AMZN)’s acquisition of iRobot Corporation (NASDAQ:IRBT) for $1.4 billion is poised to secure unconditional approval from the EU antitrust authorities. The European Commission’s deadline to review the acquisition is February 14, 2024.
On November 20, Amazon.com, Inc. (NASDAQ:AMZN) announced that it plans to further its partnership with DXC Technology (NYSE:DXC) to move approximately 1,000 DXC customers’ workload over to AWS.
Polen Capital commented on Amazon.com, Inc. (NASDAQ:AMZN) in its third quarter 2023 investor letter. Here is what it said:
“Amazon continues to showcase it’s place as one of the most competitively advantaged companies in the world. The company has made significant progress in managing costs and better leveraging existing capacity, driving a strong recovery in its profitability. We think there’s additional room for improvement.
AWS growth seems to be stabilizing even while management continues to work with clients to optimize their infrastructure spend. Roughly 90% of global IT spending remains on premise. We believe this will eventually flip, with most IT spending ultimately moving to the cloud over time. We think AWS will be a significant beneficiary of this transition.
Further, our investment case on company profitability driven by AWS and advertising continues to unfold, delivering nearly $8 billion in free cash flow over the trailing twelve months and a net margin of 5%. We expect both to move higher with the mix shift of more profitable businesses growing fastest continuing to take effect.
At Amazon’s current price, we believe the company is well positioned to deliver a mid-teens or higher total shareholder return for our clients over the next five plus years without a Herculean effort from the business. It simply needs to continue executing on current businesses and growing into the capacity it built during and immediately after the pandemic.”
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1. Microsoft Corporation (NASDAQ:MSFT)
Market Sector: Information Technology
Number of Hedge Fund Holders: 306
Microsoft Corporation (NASDAQ:MSFT) is a leading provider and manufacturer of operating systems, software, PC accessories and tech gadgets, and more.
33 Wall Street analysts covered Microsoft Corporation (NASDAQ:MSFT)’s stock over the last three months, and 32 analysts maintained a Buy rating on the company shares. The average price target of $410.03 represents an 8.52% upside as of the November 22 market close.
Out of the 910 elite hedge funds that are tracked by Insider Monkey, 306 funds had a stake in Microsoft Corporation (NASDAQ:MSFT)’s stock in Q3, up from 300 in the previous quarter. Michael Larson’s Bill & Melinda Gates Foundation Trust was the most significant shareholder of the company, with 39.286 million shares worth $12.40 billion, representing 31.87% of the fund’s portfolio.
Jackson Peak Capital commented on Microsoft Corporation (NASDAQ:MSFT) in its third quarter 2023 investor letter. Here is what it said:
“The Microsoft Corporation (NASDAQ:MSFT)/Activision Blizzard, Inc. (NASDAQ:ATVI) merger arbitrage came to a successful conclusion with the court denying the FTC’s preliminary injunction request. The deal subsequently received approval from the UK CMA and closed in October. The ATVI position was an example of “staying around the hoop” of a significant arb opportunity. At first, the position led to a small loss in Q2 when the UK CMA initially blocked the deal in April, but we stayed close to the case, analyzed the FTC trial and scaled up the ATVI position as it became apparent FTC had a weak case, meaning the probability of the deal going through was mispriced by the market since the companies would likely find a solution to work with the UK CMA (only global regulator who had an issue) if the FTC lost.”
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You can also look at the 12 High Dividend Stocks Picked By Billionaire Ray Dalio and the 20 Most Oxygen Friendly Cities in the US.
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