In this article, we discuss the 14 money making stocks to invest in.
Investors are eager to pour their money into the United States stock market once more as growth returns after a macro slow down over the past two years. The prospects of a looser monetary policy in the next year have served to propel major indexes of the market to swing upwards in recent months. The S&P 500 is up more than 24%, the NASDAQ Composite is up over 44%, while the Dow Jones has registered gains of around 14%. Double digits growth for all three indexes in 2023 is a remarkable turnaround from 2022.
Some of the major reasons for this include slowing inflation, steady consumer spending, a resilient labor market, and expert predictions about a soft landing for the economy. All three benchmark indexes of the market have posted nine consecutive weeks of gains at the end of the year, with the tech-heavy NASDAQ shining bright. Despite layoffs in the tech sector, this is the best performance for the growth index since 2020.
Big tech firms that dominate the NASDAQ, like Microsoft Corporation (NASDAQ:MSFT), NVIDIA Corporation (NASDAQ:NVDA), and Apple Inc. (NASDAQ:AAPL), have performed exceptionally well this year. The stocks of these firms are up 57%, 245%, and 54% this year. As the momentum shifts towards growth, the Treasury Yields are falling. After reaching a record near 5% over the past few months, the 10-year bond yield has ended 2023 at 4% and is expected to fall further in the new year.
However, investors should be wary of geopolitical tensions in Ukraine and the Middle East, US tension with China, and the performance of the US dollar index as the head into 2024. The worst may already be over though, and investors can take heart from this and invest in money making companies that have an established history of excellence. One of these firms, as mentioned above, is Apple Inc.. Tim Cook, the CEO of the firm, recently highlighted some of the achievements of his firm moving forward during the Q3 earnings call.
“Since we introduced Apple Pay almost a decade ago, customers have been loving how easy it is to make purchases online, in apps and in stores. We’re also pleased to see Apple Card build on the success of Apple Pay. Designed with our users’ financial health in mind, Apple Card has become one of the most successful credit card programs in the U.S. with award-winning customer satisfaction. And this spring, we introduced a new high-yield savings account for Apple Card customers, which has become incredibly popular, with customers already making more than $10 billion in deposits. Meanwhile, Apple TV+ continues to provide a spectacular showcase of imaginative storytelling. Recently, fans welcomed new series like Hijack and Silo as well as returning fan favorites like Foundation and The Afterparty.
In the few years since its launch, Apple TV+ has earned more than 1,500 nominations and 370 wins. That includes the 54 Emmy Award nominations across 13 titles that Apple TV+ received last month. It’s also been an exciting time for sports on Apple TV+. Soccer legend Lionel Messi made his debut with Major League Soccer last month, and fans all over the world tuned in with MLS Season Pass. We are excited about our MLS partnership, and we’re thrilled to see Messi suiting up with Inter Miami. And just in time for summer concert season, Apple Music launched new discovery features celebrating live music, including venue guides in Apple Maps and set lists from tours of major artists. These new features and others join a lineup of updates coming later this year to make Services more powerful, more useful and more fun than ever.”
Our Methodology
These companies with ROE greater than 30% and ROI greater than 25% were selected and shortlisted based on their market capitalizations. They were then ranked according to hedge fund sentiment. Data from around 900 elite hedge funds tracked by Insider Monkey in the third quarter of 2023 was used to identify the number of hedge funds that hold stakes in each company. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
An overhead view of a bustling stock exchange, with brokers and traders exchanging stocks.
Money Making Stocks To Invest In
14. Airbnb, Inc. (NASDAQ:ABNB)
Number of Hedge Fund Holders: 44
ROE as of December 30: 74%
ROI as of December 30: 47%
Airbnb, Inc. (NASDAQ:ABNB) operates a platform that enables hosts to offer stays and experiences to guests worldwide. On October 31, Mizuho analyst James Lee maintained a Neutral rating on Airbnb, Inc. stock and lowered the price target to $130 from $150.
Among the hedge funds being tracked by Insider Monkey, Florida-based Citadel Investment Group is a leading shareholder in Airbnb, Inc. with 3 million shares worth more than $422 million.
Just like Microsoft Corporation, NVIDIA Corporation, and Apple Inc., Airbnb, Inc. is one of the best money making stocks to invest in.
In its Q3 2023 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and Airbnb, Inc. was one of them. Here is what the fund said:
“Top contributors to performance for the quarter included global online travel marketplace Airbnb, Inc.. Airbnb again defied fears about weaker travel demand as it experienced continued recovery in cross-border and urban nights and resilient pricing trends, though travel volumes remain mixed.”
13. Novo Nordisk A/S (NYSE:NVO)
Number of Hedge Fund Holders: 51
ROE as of December 30: 93%
ROI as of December 30: 67%
Novo Nordisk A/S (NYSE:NVO) is a healthcare firm based in Denmark. On December 5, investment advisory JPMorgan maintained an Overweight rating on Novo Nordisk A/S stock and raised the price target to DKK 850 from DKK 800.
At the end of the third quarter of 2023, 51 hedge funds in the database of Insider Monkey held stakes worth $2.2 billion in Novo Nordisk A/S, compared to 43 in the previous quarter worth $778 million.
In its Q3 2023 investor letter, Polen Capital highlighted a few stocks and Novo Nordisk A/S was one of them. Here is what the fund said:
“We added new positions in Eli Lilly and Novo Nordisk A/S in the third quarter. We have been monitoring Lilly and Novo Nordisk for some time, and new clinical results from a recent drug trial give us confidence in the large upside potential for GLP-1s. These results from a Novo Nordisk study showed impressive cardiovascular outcomes for its GLP-1, Wegovy. This study of over 17,000 overweight or obese people with established cardiovascular disease (but without diabetes) showed that Wegovy reduced the likelihood of major adverse cardiovascular events (heart attack, stroke, sudden cardiac death) by over 20% for up to five years. This large and well-controlled trial helps to demonstrate that the weight loss benefits of GLP-1s (likely similar for Mounjaro and Wegovy) lead to better health outcomes for patients and likely save the healthcare system significant amounts of money over the long term. In our view, this makes it very unlikely that payors and governments will deny patient access and reimbursement for these drugs for the long haul (hence the positive stock price moves for Lilly and Novo when the data was released mid-quarter).
We have started with a small 1% position in Lilly, but when paired with our new holding in Novo Nordisk at 2% (NVO is slightly larger as its valuation is lower), it represents a 3% combined position in the two companies we expect to maintain a duopoly in this large drug class over the next several years.
Novo Nordisk has a long history as the leader in diabetes pharmaceuticals. It is much more narrowly focused on diabetes than Lilly with its GLP-1 drugs, Ozempic and Wegovy (Wegovy is the same drug as Ozempic but uses a different name for obesity), driving most of the company’s revenue and earnings growth. The cardiovascular outcomes trial mentioned above is a big positive for Novo. It establishes the duopoly with Lilly in insulin management for Type 2 diabetics and weight loss for the huge number of overweight and obese people across the globe.
Novo has more legacy diabetes products that its newer drugs will cannibalize, but our research indicates that we can expect high-teens earnings per share growth from Novo over the next five years. In addition, both Novo and Lilly have next-generation diabetes and weight loss drugs in development that appear even more effective than the current offerings while also offering new treatment modalities, such as oral drugs versus today’s auto injectables.”
12. ASML Holding N.V. (NASDAQ:ASML)
Number of Hedge Fund Holders: 57
ROE as of December 30: 79%
ROI as of December 30: 46%
ASML Holding N.V. (NASDAQ:ASML) makes and sells advanced semiconductor equipment systems. On November 30, investment advisory JPMorgan maintained an Overweight rating on ASML Holding N.V. stock and raised the price target to EUR 800 from EUR 690.
Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in ASML Holding N.V. with 4.8 million shares worth more than $2.8 billion.
11. Lockheed Martin Corporation (NYSE:LMT)
Number of Hedge Fund Holders: 60
ROE as of December 30: 65%
ROI as of December 30: 26%
Lockheed Martin Corporation (NYSE:LMT) operates as a security and aerospace firm. On October 18, investment advisory Argus maintained a Buy rating on Lockheed Martin Corporation stock with a price target of $510.
Among the hedge funds being tracked by Insider Monkey, Chicago-based firm Citadel Investment Group is a leading shareholder in Lockheed Martin Corporation with 693,300 shares worth more than $283 million.
10. Cisco Systems, Inc. (NASDAQ:CSCO)
Number of Hedge Fund Holders: 64
ROE as of December 30: 31%
ROI as of December 30: 25%
Cisco Systems, Inc. (NASDAQ:CSCO) makes and sells networking and other products. On November 16, investment advisory Evercore maintained an In Line rating on Cisco Systems, Inc. stock and lowered the price target to $55 from $63.
At the end of the third quarter of 2023, 64 hedge funds in the database of Insider Monkey held stakes worth $1.6 billion in Cisco Systems, Inc., compared to 55 in the previous quarter worth $1.4 billion.
Here is what Oakmark Funds has to say about Cisco Systems, Inc. in its Q3 2023 investor letter:
“Cisco Systems, Inc. is the leading networking solutions company. Networking equipment becomes more important as businesses modernize their IT infrastructure, and Cisco is well positioned to capture this demand given its broad portfolio and highly effective go-to-market strategy. Cisco is transitioning away from selling mainly transactional hardware and toward selling more software and subscriptions. This shift is expected to accelerate revenue growth, improve operating margins and build recurring revenue. Despite these notable business improvements, Cisco still trades near a trough valuation relative to the S&P 500 Index. More recently, Cisco announced its intention to acquire Splunk, a leader in security and observability, adding to its already strong position in the increasingly important security market. At a low-teens multiple of our estimate of normalized earnings, Cisco is trading comfortably below our estimate of intrinsic value.”
9. PDD Holdings Inc. (NASDAQ:PDD)
Number of Hedge Fund Holders: 66
ROE as of December 30: 34%
ROI as of December 30: 28%
PDD Holdings Inc. (NASDAQ:PDD) is a Shanghai-based company that owns and operates an ecommerce platform. On November 1, investment advisory UBS assumed coverage of PDD Holdings Inc. stock with a Buy rating and a price target of $137.
At the end of the second quarter of 2023, 66 hedge funds in the database of Insider Monkey held stakes worth $4.3 billion in PDD Holdings Inc., compared to 67 in the preceding quarter worth $2.6 billion.
8. The Home Depot, Inc. (NYSE:HD)
Number of Hedge Fund Holders: 76
ROE as of December 30: 1,151%
ROI as of December 30: 32%
The Home Depot, Inc. (NYSE:HD) is a home improvement retailer. On December 8, Truist analyst Scot Ciccarelli maintained a Buy rating on The Home Depot, Inc. stock and raised the price target to $356 from $340.
Among the hedge funds being tracked by Insider Monkey, Florida-based investment firm Citadel Investment Group is a leading shareholder in The Home Depot, Inc. with 1.9 million shares worth more than $591 million.
In its Q3 2023 investor letter, Madison Investments, an asset management firm, highlighted a few stocks and The Home Depot, Inc. was one of them. Here is what the fund said:
“We updated the sustainable scorecard for The Home Depot, Inc. and maintained our Above Average Rating. Home Depot’s corporate responsibilities focus on three pillars: focusing on its people, operating sustainably, and strengthening its communities. Home Depot continues to focus on its people by investing billions of dollars in wages, training, and benefit enhancement. The company’s environmental targets include the reduction of direct (Scope 1) and indirect (Scope 2) emissions by 42% by 2030, as well as a 25% decrease in emissions related to the “use of products sold” (Scope 3 emissions). Both targets are from a 2020 base year.
Separately, The Home Depot Foundation announced that it will invest $6 million in skilled trades training to address the 400,000 job openings across the construction industry. This grant launches a new program that will provide free, skilled trades training and scholarships for veterans and military families.”
7. Booking Holdings Inc. (NASDAQ:BKNG)
Number of Hedge Fund Holders: 81
ROE as of December 30: 348%
ROI as of December 30: 45%
Booking Holdings Inc. (NASDAQ:BKNG) provides travel and restaurant online reservation and related services worldwide. On December 20, investment advisory Citi maintained a Buy rating on Booking Holdings Inc. stock and raised the price target to $4,100 from $3,425.
At the end of the third quarter of 2023, 81 hedge funds in the database of Insider Monkey held stakes worth $5.8 billion in Booking Holdings Inc., compared to 78 in the preceding quarter worth $6.5 billion.
In its Q3 2023 investor letter, Ensemble Capital Management, an asset management firm, highlighted a few stocks and Booking Holdings Inc. was one of them. Here is what the fund said:
“Booking Holdings Inc. (+14.21%): Despite macroeconomic worries and inflation eating into global consumers’ ability to spend, households around the world continue to prioritize travel. While so called “revenge travel,” or increased travel spending after being stuck inside during COVID, has likely run its course, global hotel room nights have only recently returned to pre-COVID trends. As COVID has mostly ceased to have an impact on travel, other than in Asia where China’s extended lockdown means a recovery is still ongoing, growth going forward is likely to be more modest. But during COVID, Booking stayed on offense and has been taking market share. Notably, the company’s alternative accommodations offering has grown substantially and in recent quarters has grown faster than Airbnb.”
6. Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 112
ROE as of December 30: 35%
ROI as of December 30: 26%
Adobe Inc. (NASDAQ:ADBE) operates as a diversified software company worldwide. On November 14, investment advisory Evercore maintained an Outperform rating on Adobe Inc. stock and raised the price target to $700 from $605.
Among the hedge funds being tracked by Insider Monkey, Texas-based investment firm Fisher Asset Management is a leading shareholder in Adobe Inc. with 4.5 million shares worth more than $2.3 billion.
Alongside Microsoft Corporation, NVIDIA Corporation, and Apple Inc., Adobe Inc. is one of the best money making stocks to invest in.
In its Q3 2023 investor letter, Polen Capital, an asset management firm, highlighted a few stocks and Adobe Inc. was one of them. Here is what the fund said:
“Both Alphabet and Adobe’s businesses continue to perform well. With respect to Adobe, the most recent quarter delivered more of the same with constant currency revenue growing 13%, margin expansion, and over 2% of shares outstanding repurchased for non-GAAP earnings growth of over 20%. We believe its approach to GenAI through Firefly, which guarantees safe content because it trains on Adobe Stock, will continue to be attractive to enterprises. The counter to GenAI, and something we are keeping an eye on with Alphabet and Adobe, is that it requires heavy investment. While both businesses can leverage their scale and manage costs in other areas, we expect the investment in future growth through GenAI will weigh on company-wide margins over the near term.”
5. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 134
ROE as of December 30: 171%
ROI as of December 30: 57%
Apple Inc. is a consumer electronics firm. On November 16, Tigress Financial analyst Ivan Feinseth maintained a Strong Buy rating on Apple Inc. stock and raised the price target to $240 from $225.
At the end of the third quarter of 2023, 134 hedge funds in the database of Insider Monkey held stakes worth $179 billion in Apple Inc., compared to 135 in the previous quarter worth $194 billion.
In its Q3 2023 investor letter, Baron Funds highlighted a few stocks and Apple Inc. was one of them. Here is what the fund said:
“After a strong start to the year, shares of Apple Inc. partially retraced their gains this quarter. Mixed second calendar quarter financial results, with iPhone, iPad, and Wearables revenue coming in just shy of consensus expectations, coupled with elevated investor concerns about the macro economy and potential weakness in consumer spending later this year, pressured shares. Despite these quarterly fluctuations in product sales, we are encouraged by several long-term trends, including: (1) revenue from higher-margin services like the App Store, iCloud, and Apple Pay, which are growing faster than the overall business, driving better revenue visibility and higher free-cash-flow (FCF) margins; (2) continued gains in global market share in smartphones, wearables, and other hardware categories; and (3) consistent returns of capital to shareholders via share repurchases and dividends. On top of these trends in the core business, Apple is thoughtfully investing in new categories like augmented reality, search, financial services, and streaming media content. We took advantage of weakness in the quarter to add to our position in Apple.”
4. Mastercard Incorporated (NYSE:MA)
Number of Hedge Fund Holders: 140
ROE as of December 30: 172%
ROI as of December 30: 53%
Mastercard Incorporated (NYSE:MA) is a technology company that provides transaction processing and other payment-related products and services in the United States and internationally. At the end of the third quarter of 2023, 140 hedge funds in the database of Insider Monkey held stakes worth $15 billion in Mastercard Incorporated, compared to 139 in the preceding quarter worth $14 billion.
3. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 157
ROE as of December 30: 45%
ROI as of December 30: 28%
Visa Inc. (NYSE:V) is a California-based payments technology firm. On December 18, investment advisory Barclays maintained a Buy rating on Visa Inc. stock and raised the price target to $304 from $278.
At the end of the third quarter of 2023, 167 hedge funds in the database of Insider Monkey held stakes worth $24.4 billion in Visa Inc., compared to 171 in the preceding quarter worth $24.9 billion.
In its Q3 2023 investor letter, Ensemble Capital Management, an asset management firm, highlighted a few stocks and Visa Inc. was one of them. Here is what the fund said:
“Mastercard is a company that pretty much everyone has heard of. In fact, when we meet with Ensemble’s clients, we occasionally tell them that we’re nearly certain that they are carrying a Mastercard in their wallet or purse as we speak, and if not, they are carrying a Visa Inc.. Most people carry both.
People carry Mastercard and Visa because they are accepted nearly everywhere in developed markets. And they are accepted in most emerging economies, at least at locations where higher income people spend money. As a shopper you can show up at a bodega in Peru, a high end hotel in Tokyo, a truck stop in Alabama, or an ice cream cart in Milan, show them a piece of plastic and they’ll let you walk away with goods and services without any worry that they aren’t going to get paid…” (Click here to read the full text)
2. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 180
ROE as of December 30: 69%
ROI as of December 30: 44%
NVIDIA Corporation provides graphics, computing and networking solutions. On November 13, investment advisory Wolfe maintained an Outperform rating on NVIDIA Corporation stock with a price target of $630.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in NVIDIA Corporation with 20 million shares worth more than $8.8 billion.
In its Q3 2023 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and NVIDIA Corporation was one of them. Here is what the fund said:
“At the portfolio level, the positive fundamental trends we noticed in the second quarter continued into the third quarter as well – many of our companies are reporting stability or slight improvement in business trends. Weighted average 2023 revenue growth expectations for the portfolio were up 3.8% during the third quarter or up 0.8% if we exclude NVIDIA. We wrote at length about NVIDIA earlier this year, but it is worth mentioning that the company has continued to exceed its own projections and the Street’s most optimistic expectations. After raising its revenue and EPS guidance for 2023 by 40% and 69%, respectively, following its last quarter, NVIDIA increased it further by 26% and 35%, respectively, after reporting the most recent one. Consensus expectations now call for revenues to grow 94% this year, while earnings per share are expected to increase by 192%. You may have seen these kinds of growth rates before, but we doubt you saw them from a company generating $50 billion in revenues. The skeptics who continue to question and doubt the accelerating demand for Generative artificial intelligence forgot to tell NVIDIA about it. But we digress…back to the portfolio…profit expectations have risen even faster than revenues and were up 11% during the third quarter (or up 7.8% ex-NVIDIA) with margin expectations up 149bps (107bps ex-NVIDIA). So, broadly speaking, our companies are seeing improvement in overall business trends, which flow through to their bottom lines, driving higher margins. We are also starting to see the benefits of leaner cost structures and more disciplined capital allocation compared to two or three years ago when capital was both cheaper and more readily available.”
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 306
ROE as of December 30: 39%
ROI as of December 30: 26%
Microsoft Corporation is a Washington-based technology company. On November 16, investment advisory Jefferies maintained a Buy rating on Microsoft Corporation stock with a price target of $400.
Among the hedge funds being tracked by Insider Monkey, Texas-based investment firm Fisher Asset Management is a leading shareholder in Microsoft Corporation with 24 million shares worth more than $7.8 billion.
In its Q3 2023 investor letter, Jackson Peak Capital, an investment management firm, highlighted a few stocks and Microsoft Corporation was one of them. Here is what the fund said:
“The Microsoft Corporation/Activision Blizzard, Inc. (NASDAQ:ATVI) merger arbitrage came to a successful conclusion with the court denying the FTC’s preliminary injunction request. The deal subsequently received approval from the UK CMA and closed in October. The ATVI position was an example of “staying around the hoop” of a significant arb opportunity. At first, the position led to a small loss in Q2 when the UK CMA initially blocked the deal in April, but we stayed close to the case, analyzed the FTC trial and scaled up the ATVI position as it became apparent FTC had a weak case, meaning the probability of the deal going through was mispriced by the market since the companies would likely find a solution to work with the UK CMA (only global regulator who had an issue) if the FTC lost.”
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This article is originally published at Insider Monkey.
