In this article, we will take a look at the 5 most profitable large cap stocks to buy. To read our analysis of the recent trends, and market activity, you can go to the 14 Most Profitable Large Cap Stocks to Buy.
5. Toyota Motor Corporation (NYSE:TM)
Net Profit TTM: $26.96 billion
Number of Hedge Fund Holders: 15
Founded in 1937 and headquartered in Toyota City, Japan, Toyota Motor Corporation (NYSE:TM) is a global automotive industry leader manufacturing vehicles in 27 countries or regions and marketing the company’s products in over 170 countries and regions.
On October 26, Toyota Motor Corporation (NYSE:TM) released its financial results for six months ended September 30, 2023. Its revenue went up by 24% y-o-y to ¥22 trillion, while its net income surged by 117% y-o-y to ¥2.6 trillion.
As of Q3 2023, 15 hedge funds owned shares of Toyota Motor Corporation (NYSE:TM), valued at $1.1 billion. Ken Fisher’s Fisher Asset Management was the largest shareholder with ownership of 6.04 million shares valued at $1.1 billion.
Like other stocks such as Amazon.com, Inc. (NASDAQ:AMZN), NVIDIA Corporation (NASDAQ:NVDA), and Microsoft Corporation (NASDAQ:MSFT), Toyota Motor Corporation (NYSE:TM) is among the 14 most profitable large cap stocks to buy.
4. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Net Profit TTM: $30.13 billion
Number of Hedge Fund Holders: 107
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), based in Hsinchu, Taiwan, is a leading semiconductor foundry operator. It serves more than 500 customers and manufactures over 12,300 products for various applications including smartphones, high performance computing, the Internet of Things (IoT), automotive, and digital consumer electronics.
On October 19, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) released its financial results for Q3 2023. Its revenue declined by 11% y-o-y to $17.3 billion, while net income shrunk by 25% y-o-y to $6.7 billion.
Following the earnings release, Needham analyst Charles Shi reiterated a ‘Buy’ rating for Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) shares with an unchanged price target of $115 which represents a potential upside of 19.57% based on the share price on December 5.
Wedgewood Partners, an investment management company, made the following comments about Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its “Wedgewood Partners Large Cap Focused Growth Fund” Q3 2023 investor letter:
“The Company [Taiwan Semiconductor Manufacturing] is lapping revenue growth of over +40% (compared to 2022) during every quarter of 2023, so it is more instructive to look at the health of the 5 business through the lens of a multi-year timeframe. Most of the Company’s customers have seen near-term weakness in demand due to pandemic normalization. However, we think the longer-term trend of more silicon per device is still very much intact, and the Company is well-positioned to serve this, given its commanding market share in leading edge capacity. The Company’s aggressive investment in leading-edge equipment combined with tight development with fabless IC designers, plus the embrace of open development libraries, should continue to foster a superior competitive position and attractive long-term growth.”
3. Johnson & Johnson (NYSE:JNJ)
Net Profit TTM: $34.62 billion
Number of Hedge Fund Holders: 84
Johnson & Johnson (NYSE:JNJ) is one of the largest healthcare companies in the world with a history dating back to more than 135 years. It focuses on the research and development, manufacture, and sale of a broad range of products in the healthcare field across pharmaceuticals, and medical devices.
Johnson & Johnson (NYSE:JNJ) completed the spinoff of its Consumer Health division during the third quarter through an initial public offering of the division as Kenvue Inc. (NYSE:KVUE). The company generated cash proceeds of $13.2 billion through a debt offering and IPO of Kenvue. It retained 9.5% stake in Kenvue.
As of Q3 2023, 84 hedge funds owned shares of Johnson & Johnson (NYSE:JNJ), valued at $4.1 billion. Notable investors included Fisher Asset Management, Bridgewater Associates, and D E Shaw, among others.
Like other stocks such as Amazon.com, Inc. (NASDAQ:AMZN), NVIDIA Corporation (NASDAQ:NVDA), and Microsoft Corporation (NASDAQ:MSFT), Johnson & Johnson (NYSE:JNJ) is among the 14 most profitable large cap stocks to buy.
2. Exxon Mobil Corporation (NYSE:XOM)
Net Profit TTM: $41.13 billion
Number of Hedge Fund Holders: 79
Irving, Texas-based Exxon Mobil Corporation (NYSE:XOM) is one of the largest publicly traded international energy and petrochemical companies. It is one of the largest integrated fuels, lubricants, and chemical companies in the world.
On October 11, Exxon Mobil Corporation (NYSE:XOM) announced a definitive agreement to acquire Pioneer Natural Resources (NYSE:PXD) in an all-stock transaction valued at $59.5 billion. The acquisition is expected to transform the company’s upstream portfolio with significant additions to its Permian footprint.
Exxon Mobil Corporation (NYSE:XOM) has been a consistent component of hedge fund portfolios. As of Q3 2023, its shares were held by 79 of the 910 hedge funds tracked by Insider Monkey, valued at $4.5 billion. Jean-Marie Eveillard’s First Eagle Investment Management was the largest shareholder on record with ownership of 13.2 million shares valued at $1.6 billion.
1. Microsoft Corporation (NASDAQ:MSFT)
Net Profit TTM: $77.10 billion
Number of Hedge Fund Holders: 306
Redmond, Washington-based Microsoft Corporation (NASDAQ:MSFT) is a leading technology company with products include operating systems, cross-device productivity applications, server applications, business solution applications, desktop and server management tools, software development tools, and video games.
Microsoft Corporation (NASDAQ:MSFT) is among the leaders in the AI race following its partnership with OpenAI, the creator of Chat GPT – an artificial intelligence powered chatbot. The company is using its AI capabilities to improve its existing products and services including Bing Search, Cloud, as well as its Office Suite.
In its Baron Technology Fund Q3 2023 investor letter, Baron Funds, an investment management company, made the following comments about Microsoft Corporation (NASDAQ:MSFT):
“Looking at the big picture, Microsoft continues to execute at a high level, navigating a challenging macro backdrop while aggressively investing in long-term growth, and we remain confident that Microsoft is well positioned to leverage AI over the medium to long term as it infuses Open AI and other generative AI technologies across its entire product portfolio.”
As of Q3 2023, Microsoft Corporation (NASDAQ:MSFT) ranks highest on our list of 14 most profitable large cap stocks to buy in terms of hedge fund sentiment. It was the most sought-after stock among the 910 hedge funds tracked by Insider Monkey as 306 of these hedge funds held its shares valued at $72 billion.
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