5 Best Stocks to Buy According to Chris James’ Engine No. 1

1. Microsoft Corporation (NASDAQ: MSFT)

James’ Stake Value: $16,781,000
Percentage of Chris James’ 13F Portfolio: 6.16%
Number of Hedge Fund Holders: 251

Topping the list of the 10 best stocks to buy according to Chris James’ Engine No. 1 is American tech giant Microsoft Corporation (NASDAQ: MSFT). On top of developing the Windows operating system and providing Microsoft Office products, the Washington-based tech giant offers cloud computing services through Microsoft Azure. In 2016, the company’s cloud infrastructure accounted for only 7% of the market, but in 2020, it has grown by 20%. On the other hand, Microsoft Corporation (NASDAQ: MSFT) currently boasts 200 million active business Microsoft 365 users on a monthly basis. The company currently pays an annual dividend of $2.24 per share with a 0.86% dividend yield. MSFT stock has offered more than 33% returns to investors in the past twelve months. 

The company has a market cap of $1.95 trillion. Revenue for the third quarter of 2021 was $41.7 billion, up 19% from $35.02 billion the previous year. As of June 18, Microsoft Corporation (NASDAQ: MSFT) shares traded at $259.43 and have a P/E ratio of 35.35. The 52-week price range of MSFT is $193.55 – $263.19. KGI Securities initiated coverage on Microsoft Corporation on June 2 with an Outperform rating and a $300 per share price target.

Chris James’ Engine No. 1 LLC owns 71,177 shares of Microsoft Corporation (NASDAQ: MSFT) worth $16.8 million, representing 6.16% of its investment portfolio. The hedge fund trimmed its stake in MSFT by 26% in the first quarter of 2021. At the end of the first quarter of 2021, 251 hedge funds in the database of Insider Monkey held stakes worth $60 billion in Microsoft Corporation (NASDAQ: MSFT). Out of the hedge funds being tracked by Insider Monkey, Fisher Asset Management is a leading shareholder in Microsoft Corporation (NASDAQ: MSFT) with 23.9 million shares worth more than $5.66 billion.

Our calculations show that Microsoft Corporation (NASDAQ: MSFT) ranks 2nd in our list of the 30 Most Popular Stocks Among Hedge Funds.

ClearBridge Investments, in its Q1 2021 investor letter, mentioned Microsoft Corporation (NASDAQ: MSFT) and shared their insights on the company. Here is what the fund said:

“We also made adjustments to the portfolio’s top 10 holdings to increase the participation of select stocks. The FAANGs and Microsoft delivered mixed results during the quarter and we continue to be mindful of our weighting to these mega-cap growth stocks to ensure they are not limiting our ability to add diversity through new ideas. Our repositioning has been encouraging so far with the portfolio performing better on up days in the market while maintaining good down capture during more turbulent sessions.”

You can also take a peek at 10 Best Spring Stocks to Buy Now and 10 Best Dividend Stocks to Buy According to Billionaire Ray Dalio.

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