In this article, we discuss the 5 best stocks to buy according to Terry Smith’s Fundsmith LLP. If you want our detailed analysis of these stocks, go directly to 10 Best Stocks To Buy According To Terry Smith’s Fundsmith LLP.
5. Meta Platforms, Inc. (NASDAQ:FB)
Fundsmith LLP’s Stake Value: $2,185,718,000
Percentage of Fundsmith LLP’s 13F Portfolio: 6.04%
Number of Hedge Fund Holders: 248
Meta Platforms, Inc. (NASDAQ:FB) is aiming for “deep compatibility” with blockchain and cryptocurrency, and the company is looking for early adoption of these technologies as they are an essential part in building the metaverse. Heading into 2022, Meta Platforms, Inc. (NASDAQ:FB) is a top internet stock pick at major investment advisory firms like Baird, Crespi, Evercore ISI, and JPMorgan.
Smith’s Fundsmith LLP is one of the leading Meta Platforms, Inc. (NASDAQ:FB) stakeholders, with a $2.18 billion position in the company during the third quarter of 2021, representing 6.04% of the firm’s investments for the period. Meta Platforms, Inc. (NASDAQ:FB) reported on October 25 its Q3 results, posting an EPS of $3.22, exceeding estimates by $0.04.
Loop Capital analyst Alan Gould on December 3 lowered the price target on Meta Platforms, Inc. (NASDAQ:FB) to $380 from $420 but kept a Buy rating on the shares, citing the company’s excessive expenditure on the metaverse, which is reported to exceed $10 billion and might be a cause of concern for some investors.
Among the hedge funds tracked by Insider Monkey as of September 2021, 248 funds were long Meta Platforms, Inc. (NASDAQ:FB), down from 266 funds in the prior quarter.
Here is what Canterbury Tollgate has to say about Meta Platforms, Inc. (NASDAQ:FB) in its Q3 2021 investor letter:
“To say traditional media is anti-Facebook would not be an overstatement. An already intense and multi-year critique of (or attack on) Facebook has ratcheted up in recent weeks. Facebook’s research efforts have been reported on, if often derided, for nearly a decade. Going back to 2014, Slate.com called their research practices “unethical” when FB tried to study the impact social posts had on users. Now those efforts have been turned against them for the kill shot.
My job is to observe, assess, and allocate. Not to commentate on all the whims and wishes of media narrative. However, in the case of Facebook I cannot avoid going into some detail re: the onslaught against them, which I find to be most unwarranted and insincere.
Last month the Wall Street Journal ran a five-piece series titled “The Facebook Files” which allegedly shows how toxic Instagram is for teens. The foundation of their argument was a single slide from an internal presentation claiming, based on FB’s own research, that of teens who had a negative self-image, one-third said Instagram “made them feel worse.”iii Somehow the implication here is that this is not an inescapable aspect of either the human psyche and/or society-at large, but that it is of Facebook’s doing…” (Click here to see the full text)
4. Intuit Inc. (NASDAQ:INTU)
Fundsmith LLP’s Stake Value: $2,472,326,000
Percentage of Fundsmith LLP’s 13F Portfolio: 6.83%
Number of Hedge Fund Holders: 64
Intuit Inc. (NASDAQ:INTU) is one of the top stock picks of Terry Smith’s Fundsmith LLP, with the hedge fund owning 4.58 million shares of Intuit Inc. (NASDAQ:INTU) in the third quarter, worth $2.47 billion, representing 6.83% of the total Q3 investments. Intuit Inc. (NASDAQ:INTU) is an American financial software company, headquartered in California.
Publishing its Q3 results on November 18, Intuit Inc. (NASDAQ:INTU) reported earnings per share of $1.53, exceeding estimates by $0.56. The $2.01 billion revenue was up 51.70% year-over-year, surpassing estimates by $193.42 million. The company raised its revenue guidance for 2021 by more than $1 billion, crediting the $12 billion acquisition of MailChimp on November 1. Credit Karma was acquired by Intuit Inc. (NASDAQ:INTU) in 2020, which also added $418 million to the quarterly revenue.
On November 19, Evercore ISI analyst Kirk Materne raised the price target on Intuit Inc. (NASDAQ:INTU) to $720 from $650 and kept an Outperform rating on the shares, citing the company’s Q3 financial results. The analyst stated that investors should feel confident about Intuit Inc. (NASDAQ:INTU)’s anticipated mid-to-high teens percentage revenue growth over the next several years.
Dan Loeb’s hedge fund, Third Point, is one of the largest Intuit Inc. (NASDAQ:INTU) stakeholders at the end of September 2021, with 1.10 million shares worth $593.4 million. Overall, 64 hedge funds tracked by Insider Monkey’s Q3 database were bullish on the stock.
Here is what Cooper Investors has to say about Intuit Inc. (NASDAQ:INTU) in its Q3 2021 investor letter:
“The other meaningful deal during the quarter was Intuit’s acquisition of Mailchimp for $12bn. Intuit has reinvented itself over the last decade and thrived with a leadership position in QuickBooks Online, the financial accounting software for small businesses (effectively the ‘Xero of the US’). We originally invested in Intuit in February 2020, excited by the QuickBooks prospects.
Management has executed exceptionally well on the opportunity set which has seen the shares double since our initial purchase. However, the company has now conducted two meaningful deals in Mailchimp and Credit Karma worth a combined US$20bn over the last 12 months. The investment proposition has shifted from a focus on QuickBooks to now being a financial and small business software conglomerate. We continue to very much admire the company, but with Intuit now trading on 50x forward earnings we no longer see such attractive latency on offer, nor the rewards for the level of execution risk and thus we have exited the position.”
3. IDEXX Laboratories, Inc. (NASDAQ:IDXX)
Fundsmith LLP’s Stake Value: $2,638,225,000
Percentage of Fundsmith LLP’s 13F Portfolio: 7.29%
Number of Hedge Fund Holders: 43
IDEXX Laboratories, Inc. (NASDAQ:IDXX) stock represents 7.29% of Terry Smith’s Q3 investments, with his hedge fund owning 4.2 million shares of the company, worth $2.6 billion. IDEXX Laboratories, Inc. (NASDAQ:IDXX) is a multinational American company specializing in healthcare diagnostic products and services for the animal veterinary, livestock, poultry, water testing, and dairy markets.
Morgan Stanley analyst Erin Wright initiated coverage of IDEXX Laboratories, Inc. (NASDAQ:IDXX) with an Overweight rating and a $732 price target on November 19. The analyst observed that the company should benefit from a robust diagnostics market backdrop as the world’s largest provider of pet diagnostics. IDEXX Laboratories, Inc. (NASDAQ:IDXX) also has several incremental growth drivers.
Posting its earnings for the quarter ending September 2021, IDEXX Laboratories, Inc. (NASDAQ:IDXX) reported a $2.03 EPS, exceeding estimates by $0.12. Revenue over the period jumped 12.28% year-over-year to $810.42 million, beating estimates by $12.74 million.
A total of 43 hedge funds reported owning stakes in IDEXX Laboratories, Inc. (NASDAQ:IDXX) during Q3, up from 39 funds in the prior quarter. Arrowstreet Capital is one of the leading company stakeholders, with 474,054 shares worth $294.8 million.
Here is what Carillon Tower Advisers has to say about IDEXX Laboratories, Inc. (NASDAQ:IDXX) in its Q2 2021 investor letter:
“IDEXX Laboratories develops, manufactures, and distributes products and provides services primarily for the companion animal veterinary, livestock and poultry, dairy, and water testing markets. The firm has been an impressive contributor, as it continues to benefit from its market-leading position, as well as from a steady pace of new product introductions. It also is benefitting from the uptick in pet adoptions and overall level of pet-related spending induced by the pandemic.”
2. PayPal Holdings, Inc. (NASDAQ:PYPL)
Fundsmith LLP’s Stake Value: $3,197,674,000
Percentage of Fundsmith LLP’s 13F Portfolio: 8.84%
Number of Hedge Fund Holders: 123
PayPal Holdings, Inc. (NASDAQ:PYPL), an American multinational financial technology corporation, is one of the top stock picks of Terry Smith’s Fundsmith LLP as of September 2021. Smith’s hedge fund owns a $3.19 billion position in PayPal Holdings, Inc. (NASDAQ:PYPL), which accounts for 8.84% of the total 13F portfolio. PayPal Holdings, Inc. (NASDAQ:PYPL) is one of the fintech companies that can potentially replace traditional credit card payment transactions.
BMO Capital analyst James Fotheringham on January 2 upgraded PayPal Holdings, Inc. (NASDAQ:PYPL) to Outperform from Market Perform with a price target of $224, down from $278, crediting improved stock valuation for the upgrade.
On November 18, PayPal Holdings, Inc. (NASDAQ:PYPL) posted its Q3 results. The company announced earnings per share of $1.11, exceeding estimates by $0.03.
Fisher Asset Management is one of the biggest PayPal Holdings, Inc. (NASDAQ:PYPL) stakeholders from the third quarter, with a $3.12 billion position in the company. Overall, 123 hedge funds were long PayPal Holdings, Inc. (NASDAQ:PYPL) in Q3.
Here is what Baron Opportunity Fund has to say about PayPal Holdings, Inc. (NASDAQ:PYPL) in its Q3 2021 investor letter:
“PayPal Holdings, Inc. – PayPal first caught consumers’ attention as a peer-to-peer digital payment application, particularly as a convenient and trustworthy way for eBay buyers to pay eBay sellers in the early days of online shopping. Over the years it expanded to become a near ubiquitous online retail payments platform, while also offering other shopping tools and digital services, such as digital wallet, bill pay, Buy Now-Pay Later, crypto-currency, in-store retail, and more. According to PayPal’s CEO, these new acts enabled the company to increase the TAM it “play[s] in” by “over six times in the last three years.” PayPal has 403 million active accounts today and is on its way towards its 750 million target by 2025 and 1 billion longer term, for a total TAM sized at over $1 trillion.”
1. Microsoft Corporation (NASDAQ:MSFT)
Fundsmith LLP’s Stake Value: $3,392,728,000
Percentage of Fundsmith LLP’s 13F Portfolio: 9.37%
Number of Hedge Fund Holders: 250
Microsoft Corporation (NASDAQ:MSFT) is the largest holding in Fundsmith LLP’s Q3 portfolio, with the firm owning more than 12 million Microsoft Corporation (NASDAQ:MSFT) shares, worth $3.39 billion, representing 9.37% of the total investments.
The EU approved Microsoft Corporation (NASDAQ:MSFT)’s $16 billion bid to acquire Nuance Communications, Inc. (NASDAQ:NUAN), a speech recognition and AI software company, which will be Microsoft Corporation (NASDAQ:MSFT)’s biggest acquisition after the tech giant purchased LinkedIn for $26.2 billion. The deal will help Microsoft Corporation (NASDAQ:MSFT) subsidiaries to expand their competencies into cloud services and the healthcare sector.
SMBC Nikko analyst Steve Koenig initiated coverage of Microsoft Corporation (NASDAQ:MSFT) with an Outperform rating and a $410 price target on December 21, which represents a 28% upside from existing levels. The analyst stated that Microsoft Corporation (NASDAQ:MSFT)’s cloud services are expanding, which will be a solid growth catalyst for the firm.
Microsoft Corporation (NASDAQ:MSFT) is a popular stock among the elite hedge funds tracked by Insider Monkey in Q3 2021, with 250 funds holding a bullish sentiment on the stock.
Here is what ClearBridge Sustainability Leaders Strategy has to say about Microsoft Corporation (NASDAQ:MSFT) in its Q3 2021 investor letter:
“The Strategy modestly outperformed the benchmark; consistent with our fundamental approach that seeks balanced exposure to industries and the growth and value spectrum, performance was driven by companies from diverse sectors. Microsoft, which develops software including the Windows family of products, the Microsoft Office system and the Azure cloud platform, and is a leader in data protection and customer privacy as well as human rights and diversity, contributed strongly as earnings maintained positive sentiment. Microsoft is seeing a number of businesses reach a new, higher level of engagement, adoption and momentum.”
You can also take a look at 10 Value Stocks to Buy According to Billionaire Paul Tudor Jones and 10 Tech Stocks to Buy According to Billionaire Philippe Laffont.
