In this article, we discuss the 5 best video conferencing stocks to buy. If you want to read our detailed analysis of the video technology industry, go directly to the 10 Best Video Conferencing Stocks To Buy.
05. Verizon Communications Inc. (NYSE:VZ)
Number of Hedge Fund Holders as of Q2, 2022: 58
Verizon Communications Inc. (NYSE:VZ) offers communications, technology, information, and entertainment products and services. It is one of the best video conferencing stocks to buy. On October 6, Oppenheimer analyst Timothy Horan upgraded Verizon Communications Inc. (NYSE:VZ) to Outperform from Perform and assigned a $50 price target to the stock. According to the analyst, although the near-term trends seem volatile, the company is well-positioned to achieve gradual stabilization-to-growth of the subscriber base. Horan expects a stronger free cash flow of more than 15% per year for the company, as it passes peak investment and leverage.
On September 6, Verizon Communications Inc. (NYSE:VZ) announced a 2% growth in dividends, which takes its quarterly dividend to $0.6525 per share. This was the company’s 16th consecutive year of dividend growth.
Among the hedge funds being tracked by Insider Monkey, Washington-based firm Fisher Asset Management is a leading shareholder in Verizon Communications Inc. (NYSE:VZ), with 17 million shares worth more than $879.8 million. According to Insider Monkey’s Q2 data, Verizon Communications Inc. (NYSE:VZ) was found in the public stock portfolios of 58 hedge funds, with collective stakes in the company worth $2.29 billion.
Here is what Mawer Investment Management has to say about Verizon Communications Inc. (NYSE:VZ) in its Q3 2022 investor letter:
“There are a few other segments of our portfolios that displayed weakness in the quarter. Cable and telecommunication companies have been an area that has lagged the broader market as their worlds are increasingly colliding. Companies such as Verizon (NYSE:VZ) has been impacted as wireless operator is spending heavily to attract internet subscribers with fixed wired access and the cable companies are trying to build wireless businesses.”
04. Cisco Systems, Inc. (NASDAQ:CSCO)
Number of Hedge Fund Holders as of Q2, 2022: 63
Cisco Systems, Inc. (NASDAQ:CSCO) is a communications products manufacturer and designer that sells its products all over the world. Cisco Systems, Inc. (NASDAQ:CSCO) is a giant as far as free cash flows are concerned. The company generated $13 billion in free cash flow in its fiscal year 2022, which will help it carry out its main growth plan of acquiring businesses to expand its brand and market position. Additionally, the company’s balance sheet is a fortress because it has $19 billion in cash, which is a lot more than its $10 billion in debt.
Cisco Systems, Inc. (NASDAQ:CSCO) currently pays a quarterly dividend of $0.38 per share for a dividend yield of 3.68%, as of October 18. The company has been raising its dividends consistently for the past 11 years. At the end of the second quarter of 2022, 63 hedge funds in the database of Insider Monkey held stakes worth $1.9 billion in Cisco Systems, Inc. (NASDAQ:CSCO), compared to 66 the preceding quarter worth $1.7 billion.
In its Q1 2022 investor letter, Carillon Towers Advisers, an asset management firm, highlighted a few stocks and Cisco Systems, Inc. (NASDAQ:CSCO) was one of them. Here is what the fund said:
“Cisco Systems (NASDAQ:CSCO) traded lower as investors weighed how supply chain concerns would impact sales growth. The company has been upgrading its switching and routing offerings, which should lead to strong demand as on-site locations upgrade infrastructure.”
03. Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders as of Q2, 2022: 92
Adobe Inc. (NASDAQ:ADBE) is a leading digital media and digital marketing solutions company based in California. Adobe Connect is a video conferencing tool that it launched back in 2014. Adobe Connect is a suite of software for remote training, web conferencing, presentation, and desktop sharing.
Adobe Inc. (NASDAQ:ADBE) is expanding its current product line and introducing cloud-based services. Adobe Inc. (NASDAQ:ADBE) has agreed to pay $20 billion to acquire its rival Figma in an effort to further solidify its dominance in the market. The strategic purchase will provide Adobe Inc. (NASDAQ:ADBE) access to Figma’s $16.5 billion total addressable market by 2025. On October 19, RBC Capital analyst Matthew Swanson lowered his price target on Adobe Inc. (NASDAQ:ADBE) to $395 from $425 but kept an Outperform rating on the shares.
As of Q2 2022, Adobe Inc. (NASDAQ:ADBE) shares were held by 92 out of 895 hedge funds tracked by Insider Monkey with a total value of $7.5 billion. Its largest shareholder was Fisher Asset Management, owning nearly 6.2 million shares valued at $2.3 billion.
Here is what Akre Capital Management has to say about Adobe Inc. (NASDAQ:ADBE) in its Q3 2022 investor letter:
“The five largest detractors from performance this quarter includes Adobe. Adobe announced a planned acquisition that was not only very expensive, but also highlighted an architectural vulnerability in the core software franchises, the import of which we continue to assess.”
02. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders as of Q2, 2022: 191
Alphabet Inc. (NASDAQ:GOOGL) is one of the largest internet companies globally. The company also has a video conferencing platform called Google Meet, which qualifies it to be among the best video conferencing stocks. Alphabet ranks second in our list of best video conferencing stocks to buy. On October 11, Credit Suisse analyst Stephen Ju lowered his price target on Alphabet to $134 from $140 and kept an Outperform rating on the shares ahead of quarterly results.
At the end of the second quarter of 2022, 191 hedge funds in the database of Insider Monkey held stakes worth $22 billion in Alphabet Inc. (NASDAQ:GOOGL), compared to 205 in the preceding quarter worth more than $28 billion.
Here is what Merion Road Capital specifically said about Alphabet Inc. (NASDAQ:GOOG) in its Q3 2022 investor letter:
“Portfolio returns continued to get dragged down by some of our core holdings in large-cap technology like Alphabet Inc. (NASDAQ:GOOG). The market positioning and long-term opportunity set for these companies has not changed. Current prices obviously reflect increased macroeconomic risks and risk-free rates/premium. But it’s hard to argue that these risks are not reflected in the price or that GOOG should be disproportionately hurt by rising rates when it is trading at a mid-teen multiple of free cash flow. In any case, GOOG is a secular winner when we look beyond a few months or years.”
01. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders as of Q2, 2022: 258
Microsoft Corporation (NASDAQ: MSFT) has been a player in the video conferencing market since 2006 through Skype. However, the company also has another platform called Teams which was created as a tool for office communication. Wells Fargo analyst Michael Turrin holds an Overweight rating and a price target of $315 on the shares.
On September 20, Microsoft Corporation (NASDAQ:MSFT) declared a $0.68 per share quarterly dividend, a 10.0% increase from its prior dividend of $0.62. The dividend is payable on December 8, to shareholders of record as of November 17.
Here is what Lakehouse Capital specifically said about Microsoft Corporation (NASDAQ:MSFT) in its September 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)
You can also take a look at Warren Buffett’s 10 Favorite Dividend Stocks for the Rest of 2022 and 10 Small-Cap Stocks that Pay Dividends.
