In this article, we will discuss the 5 best stocks to buy right now. If you want to explore similar stocks, you can also take a look at 10 Best Stocks To Buy Right Now.
5. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 153
Alphabet Inc. (NASDAQ:GOOG) is one of the most innovative companies in the world and is constantly releasing new products and services. The stock is currently trading at a PE multiple of 18x and is offering an optimal buying opportunity for investors. The company has a trailing twelve-month operating margin of 29.65% and an ROE of 29.22%. In addition to being profitable and efficient at making profits for shareholders, Alphabet Inc. (NASDAQ:GOOG) also has a strong cash position. The company has free cash flows of $65 billion.
On October 25, KeyBanc analyst Justin Patterson revised his price target on Alphabet Inc. (NASDAQ:GOOG) to $120 from $125 and reiterated an Overweight rating on the shares. This October, Deutsche Bank analyst Benjamin Black adjusted his price target on Alphabet Inc. (NASDAQ:GOOG) to $130 from $135 and maintained a Buy rating on the shares.
At the end of Q2 2022, 153 hedge funds were bullish on Alphabet Inc. (NASDAQ:GOOG) and held stakes worth $22.29 billion in the company. As of June 30, TCI Fund Management is the most prominent investor in Alphabet Inc. (NASDAQ:GOOG) and has stakes worth $5.4 billion in the company.
Here is what Ensemble Capital Management had to say about Alphabet Inc. (NASDAQ:GOOG) in its third-quarter 2022 investor letter:
“Alphabet Inc. (NASDAQ:GOOG) (-12.2%): While Google’s advertising business has been far more resilient than the overall online ad industry, second quarter results showed slowing demand. After starting the year hiring at a 20% annualized growth rate, Google has greatly slowed hiring as online advertising demand has slowed abruptly.”
4. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 166
Visa Inc. is a leading provider of payment solutions, with products that are used by consumers, businesses, and governments around the world. The stock is trading at a PE multiple of 28x and is offering a forward dividend yield of 0.79%, as of October 25. Visa Inc. (NYSE:V) has a trailing twelve-month operating margin of 67.48% and free cash flows of $16 billion.
This October, Jefferies analyst Trevor Williams revised his price target on Visa Inc. (NYSE:V) to $220 from $250 and maintained a Buy rating on the shares. On October 13, Deutsche Bank analyst Bryan Keane adjusted his price target on Visa Inc. (NYSE:V) to $260 from $270 and reiterated a Buy rating on the shares.
At the close of Q2 2022, 166 hedge funds were long Visa Inc. (NYSE:V) and held stakes worth $24 billion in the company. This is compared to 159 positions in the previous quarter with stakes of $28 billion.
As of June 30, TCI Fund Management is the top shareholder in Visa Inc. (NYSE:V) and has stakes worth $3.92 billion in the company.
Here is what Wedgewood Partners had to say about Visa Inc. (NYSE:V) in its third-quarter 2022 investor letter:
“Visa Inc. (NYSE:V) continues to report strong double-digit growth in payment volumes throughout the first two months of the calendar third quarter. The stock suffered after concerns about potential adverse legislation related to its credit card routing practices began to surface. Similar legislation related to the Company’s debit routing practices was passed into law back in 2010. Not unlike the previous legislation, the Company’s value proposition to merchants, consumers and bank-issuing customers and acquirers is robust enough to help blunt the potential effects the legislation might have in the near term. Over a multiyear time horizon, it would be quite difficult for any currently non-existent or even sub-scale credit routing network to add the value that Visa (or MasterCard) can already add today.”
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 184
Shares of Meta Platforms, Inc. (NASDAQ:META) have pulled back in 2022 and are offering investors the opportunity to cash in on the weakness. As of October 25, the stock is trading at a PE multiple of 10x and is one of the best undervalued stocks to buy right now. The company is profitable and has a strong cash position. Meta Platforms, Inc. (NASDAQ:META) has a trailing twelve-month operating margin of 33.40% and free cash flows of $35.8 billion.
On October 21, Deutsche Bank analyst Benjamin Black revised his price target on Meta Platforms, Inc. (NASDAQ:META) to $170 from $200 and reiterated a Buy rating on the shares. On October 25, Jefferies analyst Brent Thill adjusted his price target on Meta Platforms, Inc. (NASDAQ:META) to $200 from $225 and maintained a Buy rating on the shares.
At the end of Q2 2022, 184 hedge funds disclosed ownership of stakes in Meta Platforms, Inc. (NASDAQ:META). The total value of these stakes amounted to $18.19 billion. As of June 30, Fisher Asset Management is the leading shareholder in Meta Platforms, Inc. (NASDAQ:META) and has stakes worth $1.86 billion in the company.
Here is what Giverny Capital had to say about Meta Platforms, Inc. (NASDAQ:META) in its third-quarter 2022 investor letter:
“Our worst performers for the year-to-date have been painful. Meta Platforms, Inc. (NASDAQ:META) is down roughly 60%, and Carmax, Eurofins Scientific, Coherent and Ciena have lost about half their value. I’m wearing a dunce cap for Meta, as the changes Apple made to privacy tracking severely impacted Meta’s effectiveness at targeting ads to the right consumers. However, despite being compared recently to AOL by one analyst, Meta continues to capture enormous amounts of consumer attention: roughly 2.9 billion people use one of its sites every day. I believe it has a very long runway on monetizing those eyeballs, especially outside North America. For all its problems with ad tracking, and despite heavy investment in the so called metaverse, Meta should earn about $10 per share in 2022 and more next year. The stock, at $136 on September 30, reflects pessimism that Meta will ever recover. We’re holding because we think that Meta has the resources to improve its advertising efficiency, and that it eventually will.”
2. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 252
Amazon.com, Inc. (NASDAQ:AMZN) is a clear leader in e-commerce and has a proven track record of continuous innovation and growth. The company is one of the most trusted brands in the world and has built a loyal customer base. The company has a diversified business model with multiple revenue streams, including e-commerce, cloud computing, and digital content.
On October 24, MKM Partners analyst Rohit Kulkarni revised his price target on Amazon.com, Inc. (NASDAQ:AMZN) to $165 from $170 and maintained a Buy rating on the shares. This October, JPMorgan analyst Doug Anmuth adjusted his price target on Amazon.com, Inc. (NASDAQ:AMZN) to $175 from $185 and reiterated an Overweight rating on the shares.
At the end of Q2 2022, 252 hedge funds were bullish on Amazon.com, Inc. (NASDAQ:AMZN) and held stakes worth $30 billion in the company. Of those, Fisher Asset Management was the largest shareholder and had stakes of over $5 billion in the company.
Here is what Lakehouse Capital had to say about Amazon.com, Inc. (NASDAQ:AMZN) in its second-quarter 2022 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN) proved resilient in the face of ongoing macro pressures and delivered a strong quarterly result along with “better-than-feared” guidance for the third quarter. Net sales increased 7% year-on-year (10% constant currency) to $121.2 billion, while operating profit declined 57% to $3.3 billion. The drop in operating profit was attributable not only to external macro factors, such as elevated shipping and fuel costs, but also lower productivity and efficiency costs as a result of some overcapacity on the back of its recent investment cycle. It was pleasing to see that the company has begun to make progress on the more controllable costs, particularly productivity and staffing, with headcount, for example, down almost 100,000 over the quarter. We continue to believe Amazon is well positioned to manage these short-term issues and remains on track to deliver significant profit improvements over the next twelve months.
Management also confirmed that they have not seen any deterioration in Prime membership growth or retention following the 17% increase in Prime fees put through earlier in the year. This is not surprising to us, as in our view, the price increase was more than justified given the tremendous amount of customer value that has been added since the last price increase was implemented back in 2018, which includes the doubling of its fulfilment network and workforce, significant expansion of free same-day delivery and considerable investments in video and music content. Ultimately, we remain positive about Amazon’s future and believe that the company’s scale and market leadership will continue to drive growth for many years to come.”
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 258
Microsoft Corporation (NASDAQ:MSFT) is trading at a PE multiple of 25x and is yielding 1.12% to investors, as of October 25. The company is profitable and efficient at making profits for investors. Microsoft Corporation (NASDAQ:MSFT) has a trailing twelve-month operating margin of 42% and an ROE of 47.15%. Moreover, the company has a strong cash position and has free cash flows of $65 billion.
On October 20, UBS analyst Karl Keirstead revised his price target on Microsoft Corporation (NASDAQ:MSFT) to $300 from $330 and maintained a Buy rating on the shares. This October, Piper Sandler analyst Brent Bracelin adjusted his price target on Microsoft Corporation (NASDAQ:MSFT) to $275 from $312 and reiterated an Overweight rating on the shares.
At the close of Q2 2022, 258 hedge funds were long Microsoft Corporation (NASDAQ:MSFT) and held stakes worth $56 billion in the company. Of those, Fisher Asset Management was the top investor in the company and disclosed stakes of $7.36 billion.
Here is what Lakehouse Capital had to say about Microsoft Corporation (NASDAQ:MSFT) in its September 2022 investor letter:
“During the month, the Fund initiated a new position in Microsoft Corporation (NASDAQ:MSFT), a name that is no doubt familiar to our investors. The company was founded by Bill Gates and Paul Allen in a friend’s garage in 1975 and began dominating the operating system market with MS-DOS by the mid-1980s. The company has come a long way since then and is now widely considered the most critical and indispensable IT mega-vendor for businesses globally. In addition to its well-known Windows operating systems and Office productivity suite, the company has a broad portfolio of strategic products, including a rapidly growing public cloud business in Azure and a sizeable gaming presence.
Microsoft’s foundational products, Office365 and Windows365, are ubiquitous and highly penetrated with circa 90% and 80% market share, respectively. These solutions are deeply ingrained in commercial and personal use globally and across all industry sectors. They serve as stable, high-margin cash flow generators for Microsoft whilst they expand and invest in other growth areas of the business. One particular growth area, which is the most exciting part of Microsoft’s business in our view, is their public cloud service, Azure.
Azure has grown at a rapid clip over the past decade to cement itself as the second-largest cloud service provider globally, behind Amazon Web Services. The business benefits from strong secular tailwinds as cloud adoption continues unabated and there is considerable runway ahead – it’s currently estimated that less than 20% of global IT spend is currently in the cloud. Research indicates that 80% of enterprises use Azure and its market share has grown to 21%, up from 13% five years ago. The mission-critical nature of the product, which is similar to many of Microsoft’s other solutions, is incredibly attractive as it leads to sticky, recurring revenue streams. Something we love to see…” (Click here to read the full text)
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