In this article, we discuss the 5 best stocks to buy according to Stanley Druckenmiller. If you want to read our detailed analysis of these stocks, go directly to the 10 Best Stocks to Buy According to Stanley Druckenmiller.
5. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 242
Amazon.com, Inc. (NASDAQ:AMZN) is a diversified technology firm with core interests in ecommerce. It is one of the top stocks on Wall Street. Among the hedge funds being tracked by Insider Monkey, London-based investment firm Citadel Investment Group is a leading shareholder in Amazon.com, Inc. (NASDAQ:AMZN) with 3.9 million shares worth more than $12.8 billion.
Amazon.com, Inc. (NASDAQ:AMZN) featured in the Duquesne Capital portfolio intermittently between the fourth quarter of 2010 and early 2017. Since then, Duquesne has held onto the stock. At the end of the fourth quarter of 2021, the fund owned 56,882 shares of Amazon.com, Inc. (NASDAQ:AMZN) worth $189 million, representing 6.87% of the portfolio. The fund decreased its stake in the firm by 42% during the fourth quarter.
In its Q1 2021 investor letter, Hayden Capital, an asset management firm, highlighted a few stocks and Amazon.com, Inc. (NASDAQ:AMZN) was one of them. Here is what the fund said:
“Amazon (AMZN):We sold our last remaining stake in Amazon this quarter. Amazon was our longest-running investment holding, after having originally purchasing it at the inception of Hayden in 2014, at a price of ~$317.
I gave some details of how Amazon has progressed over these past 6.5 years in last year’s Q2 2020 letter, which partners can find here (LINK). The company has executed amazingly well over this tenure, with revenues up ~3.3x and since our initial purchase, and reported operating income up ~30x over that period.
Generally, I believe there are three reasons to sell an investment:1) we recognize our initial thesis is wrong (sell out as quick as possible), 2) we have a significantly higher returning opportunity to redeploy the capital into (sell-down to fund the new investment), or 3) the company is maturing and hitting the top part of it’s S-curve / business lifecycle, so the business has fewer places to reinvest its capital internally. As such, the future returns will likely be lower than the past. This investment thus becomes a “source of capital” in the future, as we fund earlier-stage investment opportunities.
In the case of Amazon, we decided to sell due to the third scenario. I’m sure Amazon will continue to generate value for shareholders and continue to keep pace with the broader technology sector. However, I’m just not confident it’s as attractive an investment as when we first invested.
With ~51% of US households having an Amazon Prime account (and with very low churn), each of these households continuing to increase their annual spend with Amazon, and few / no real competitors in sight, Amazon is a dominant force that will only continue to accrue value as consumers continue to move from offline to online purchases for their everyday needs. Likewise, the “cash-flow machine” of Amazon Web Services is in a similar position of strength, with AWS now having ~32% market share and continuing to grow at +30% y/y. Because of this, I think Amazon is probably one of the safest investments in the technology sector today.
So why did we decide to sell the investment then? Simply put, Amazon is …”(read the entire letter here)
4. Freeport-McMoRan Inc. (NYSE:FCX)
Number of Hedge Fund Holders: 66
Freeport-McMoRan Inc. (NYSE:FCX) is an Arizona-based mining firm. Druckenmiller registered no new activity around the stock during the fourth quarter of 2021. The fund owns over 4.8 million shares of Freeport-McMoRan Inc. (NYSE:FCX) worth $201 million, representing 7.31% of the portfolio.
Hedge funds are exceedingly bullish on Freeport-McMoRan Inc. (NYSE:FCX). At the end of the third quarter of 2021, 66 hedge funds in the database of Insider Monkey held stakes worth $3.2 billion in Freeport-McMoRan Inc. (NYSE: FCX).
3. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 250
Microsoft Corporation (NASDAQ:MSFT) is a Washington-based technology company. Elite hedge funds hold large stakes in the firm. Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Microsoft Corporation (NASDAQ:MSFT) with 25 million shares worth more than $7.1 billion.
Latest filings show that Duquesne Capital owned 800,490 shares of Microsoft Corporation (NASDAQ:MSFT) at the end of the fourth quarter of 2021 worth $269 million, representing 9.76% of the portfolio. The fund increased its stake in the firm by 3% between October and December.
In its Q1 2021 investor letter, Polen Capital, an investment management firm, highlighted a few stocks and Microsoft Corporation (NASDAQ:MSFT) was one of them. Here is what the fund said:
“We have written extensively about Microsoft in recent commentaries. It was our leading contributor last year and one of our largest weightings within the Portfolio. It continues to experience business momentum through several dominant, essential, and competitively advantaged businesses, like Office 365 and Azure. The markets it competes for are enormous, which gives the company the ability to compound at scale. In the past quarter alone, the company generated over $40 billion in revenue, representing a 17% growth rate. The inherent operating leverage in Microsoft’s business model continues and led to 34% earnings growth this past quarter. Despite the broad rotation we saw in the first quarter and Microsoft’s robust performance in 2020, we think its business fundamentals continue to exhibit strength, and the stock continues to reflect the fundamentals.”
2. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 156
Alphabet Inc. (NASDAQ:GOOG) is a California-based technology firm. At the end of the fourth quarter of 2021, Duquesne Capital owned 94,414 shares of the company worth $273 million, representing 9.91% of the portfolio. The fund decreased its stake in the tech giant by 20% during the fourth quarter compared to filings for the third quarter.
Major hedge funds have backed Alphabet Inc. (NASDAQ:GOOG) stock to offer solid returns despite a broader lull around growth stocks. Among the hedge funds being tracked by Insider Monkey, London-based investment firm TCI Fund Management is a leading shareholder in Alphabet Inc. (NASDAQ:GOOG) with 2.9 million shares worth more than $7.8 billion.
In its Q1 2021 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and Alphabet Inc. (NASDAQ:GOOG) was one of them. Here is what the fund said:
“Large-cap tech companies have been resilient through the pandemic—Alphabet among them. A top contributor, Alphabet’s Play Store and Google Cloud are in demand as businesses accelerate online activity which, along with strong YouTube user growth, is helping stabilize temporarily weaker search ad revenue trends. Through the lens of our disciplined bottom-up research process, we view Alphabet as one of the best businesses in the world, capable of expanding revenues at a rapid rate for years to come, with a bullet proof balance sheet and an average asking price. It’s a name we’ve owned since 2012 and for which we continue to have high hopes regarding future prospects.”
1. Coupang, Inc. (NYSE:CPNG)
Number of Hedge Fund Holders: 45
Coupang, Inc. (NYSE:CPNG) is a South Korea-based ecommerce firm. Among the hedge funds being tracked by Insider Monkey, California-based investment firm Greenoaks Capital is a leading shareholder in Coupang, Inc. (NYSE:CPNG) with 115 million shares worth more than $3.4 billion.
Regulatory filings reveal that Duquesne Capital owned 17.7 million shares of Coupang, Inc. (NYSE:CPNG) at the end of the fourth quarter of 2021 worth $521 million, representing 18.92% of the portfolio. The fund increased its stake in the firm by 15% between October and December.
You can also take a peek at 10 Best Stocks to Buy According to Warren Buffett and 11 Biotech Stocks Popular On Reddit.
