In this article, we discuss the 5 safe blue chip stocks to buy in June. If you want to read our detailed analysis of the current market situation and blue chip stocks, go directly to 10 Safe Blue Chip Stocks to Buy in June.
5. American Express Company (NYSE:AXP)
Number of Hedge Fund Holders: 69
Share Price (as of June 9): $160.98
American Express Company (NYSE:AXP) deals in the provision of credit cards, payment solutions, and travel-related services worldwide. In its Q1 results, the firm disclosed EPS of $2.73, exceeding analysts’ forecasts by $0.26. Revenue of $11.74 billion for the quarter outperformed Street estimates by roughly $76 million and grew 29.47% in comparison to the same period over last year.
Edward Jones analyst Kyle Sanders on June 6 upgraded American Express Company (NYSE:AXP) to ‘Buy’ from ‘Hold’. He noted that the firm’s “loyal base” of affluent customers will be less affected by the current inflationary environment, enabling AXP to post strong spending trends relative to its credit card peers. Sanders also sees the firm highlighting “robust” new account growth, on the back of its efforts to strengthen its product offerings and attract younger customers.
A detailed study of the 912 hedge funds in the first quarter database of Insider Monkey showed that 69 hedge funds were long American Express Company (NYSE:AXP), with collective stakes worth $33.18 billion. This shows a positive trend from the previous quarter where 64 hedge funds were bullish on the company shares. Berkshire Hathaway held a $28.35 billion position in American Express Company (NYSE:AXP) during the first quarter, which represented 7.79% of Warren Buffett’s entire portfolio and established him as the firm’s largest shareholder.
Here is what ClearBridge Investments had to say about the recent performance of American Express Company (NYSE:AXP) in its Q2 2021 investor letter:
“In financials, American Express has done an excellent job demonstrating the resiliency of its franchise in the midst of a global pandemic that drove a 60% decline in its core travel and entertainment business. The company’s spend-centric model has been helped by fiscal stimulus ensuring a flush consumer, while management continues to execute well by adding millions of new consumer and small and medium business accounts, which should benefit the franchise over the medium to long term. We remain optimistic regarding the company’s prospects as travel and entertainment activity rebounds, adding to our position in the quarter.”
4. AbbVie Inc. (NYSE:ABBV)
Number of Hedge Fund Holders: 76
Share Price (as of June 9): $145.43
AbbVie Inc. (NYSE:ABBV) is a biopharmaceutical firm based in Illinois, which boasts a healthy portfolio of revenue-generating drugs, and many innovative therapies in its future pipeline. The company doles out a 3.88% dividend to shareholders as well, and has gained 25.11% in the last 12 months as of June 9.
On May 2, Wells Fargo analyst Mohit Bansal kept an ‘Overweight’ rating on AbbVie Inc. (NYSE:ABBV) shares, and increased the price target to $200 from $165. He notes that right now is the time to own ABBV shares, given they are at least 35% undervalued considering the firm’s long-term growth potential. Bansal rates AbbVie as his top pick in the sector. In early June, clinical trials showed that the Imbruvica drug, developed by AbbVie Inc. (NYSE:ABBV) in collaboration with Johnson & Johnson (NYSE:JNJ), reduced the risk of disease progression or death by 25% in patients with rare lymphoma cancer.
In the first quarter, AbbVie Inc. (NYSE:ABBV) posted earnings per share of $3.16, outperforming estimates by $0.02. Quarterly revenue was recorded at $13.5 billion, up 4.66% from the year-ago quarter but falling short of analysts’ expectations by $74.9 million.
Arrowstreet Capital, with 4.65 million shares worth $754.2 million, was the biggest shareholder of AbbVie Inc. (NYSE:ABBV) in the first quarter. In total, 76 hedge funds reported bullish bets on the company shares, with a collective price tag of $3.66 billion.
Here is what Miller Howard Investments had to say about AbbVie Inc. (NYSE:ABBV) in its Q3 2021 investor letter:
“While optimistic about a recovery, we continue to balance our cyclical holdings with dividend-payers in stable, less economically-sensitive industries. We hold three pharmaceutical companies, (which includes) AbbVie (ABBV). All three have strong cash flows and balance sheets, making their high dividends reasonably safe. The investment controversy surrounding these pharma companies is whether they can develop or acquire new products to replace their current blockbuster drugs. The low valuations on these stocks reflects what we believe to be undue pessimism by investors on the prospects for new drugs.”
3. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders: 99
Share Price (as of June 9): $34.51
Bank of America Corporation (NYSE:BAC) is a bank holding company based in North Carolina which offers financial services to clients across the United States. With a market cap of $278 billion, it ranks as one of the best blue chip stocks to buy in the banking sector. The company pays a dividend yield of 2.43% as of June 9, and has increased its payout to shareholders for 8 years in a row.
On May 3, Oppenheimer analyst Chris Kotowski maintained an ‘Outperform’ rating on Bank of America Corporation (NYSE:BAC) shares with a revised price target of $50, down from $52. He notes that banks tend to do well when interest rates rise, and that they should remain “solidly profitable with their dividends intact” in the current market situation. The analyst urged investors to benefit from the recent share price weakness and buy Bank of America Corporation (NYSE:BAC) stock.
For the quarter ending March, Bank of America Corporation (NYSE:BAC) reported earnings per share of $0.80, beating estimates by $0.06. The company’s revenue of $23.23 billion for the quarter was also above consensus estimates by $135.8 million.
Investors were seen buying up on Bank of America Corporation (NYSE:BAC) stock. At the end of the first quarter, 99 hedge funds were bullish on the company shares, up from 84 in the quarter before. Warren Buffett’s Berkshire Hathaway was the leading shareholder of Bank of America Corporation (NYSE:BAC) in the first quarter, with a gigantic $41.6 billion stake.
Miller Value Partners, an investment firm, mentioned Bank of America Corporation (NYSE:BAC) in its Q1 2022 investor letter. Here’s what the fund said:
“There are many times when volatility and beta give false signals. Banks outperformed in the post-tech bubble bear market of the early 2000s. At the market peak prior to the financial crisis (when risk was the highest in those names!), Bank of America (NYSE:BAC) had a 0.9x beta (based on the trailing 5 years) suggesting its “risk” was below the market’s. Wrong! It massively underperformed in the financial crisis. Realized beta over the 5 years from the pre-crisis’ 2006 peak measured 2.3x.
A much better indicator of actual risk, both before and after the financial crisis, was the quality of the balance sheet and risk-taking appetite. Beta is backwards looking and non-stationary. Relying on it underestimated risk going into the financial crisis and overestimated coming out of it (its beta has continued to fall over the past decade).
We care greatly about risk. We spend a significant amount of time thinking about the risks to our investments. We measure risk as permanent impairment of capital, which means the prices and values don’t bounce back. Business fundamentals determine risk.”
2. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 110
Share Price (as of June 9): $125.31
JPMorgan Chase & Co. (NYSE:JPM) is up next on our list of safe blue chip stocks to buy in June. It is the largest bank in the United States, and the world’s largest bank by market capitalization with a $368 billion value. It offers a 3.19% yield to shareholders as of June 9, and has increased its dividend payments for 9 years in a row.
On May 24, BMO Capital analyst James Fotheringham reiterated a ‘Market Perform’ rating on JPMorgan Chase & Co. (NYSE:JPM) shares and bumped the price target to $156 from $150. The analyst sees the firm as a long-term market share winner among global banks, but notes some headwinds offsetting the near-term benefits of rising interest rates and growing credit demand.
Hedge fund sentiment around JPMorgan Chase & Co. (NYSE:JPM) was positive at the end of the first quarter, where a total of 110 hedge funds owned positions in the banking firm, in contrast to 107 hedge funds in the previous quarter. Billionaire Ken Fisher’s Fisher Asset Management was the biggest shareholder of JPMorgan Chase & Co. (NYSE:JPM) in the first quarter of 2022, with a position consisting of 7.76 million shares valued at $1.05 billion.
Investment firm ClearBridge Investments talked about JPMorgan Chase & Co. (NYSE:JPM) in its Q4 2021 investor letter. Here’s what the fund had to say:
“Our energy and financials holdings kept pace in the 2021 rally. In financials, JPMorgan benefited from strong economic growth, a rise in Treasury yields, and a benign credit environment.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 271
Share Price (as of June 9): $116.15
Amazon.com, Inc. (NASDAQ:AMZN) is perhaps the safest, most sought-after blue chip stock in the market. On June 6, the company’s previously announced 20:1 stock split came into effect, pricing the shares down from above $2000 to $120. As of June 9, Amazon.com, Inc. (NASDAQ:AMZN) shares are priced at $116.15. This opens the door for retail investors to purchase shares of the biggest e-commerce player in the United States.
On June 6, MKM Partners analyst Rohit Kulkarni maintained a ‘Buy’ rating on Amazon.com, Inc. (NASDAQ:AMZN) shares, and set a price target of $180, roughly in-line with his previous target of $3,625. He thinks Amazon is the best “safe haven” internet stock within the current economic climate, and sees it as the most diversified internet company in the world. Recent media reports have stated that Amazon.com, Inc. (NASDAQ:AMZN) is building a local advertising business, in hopes of competing with the hefty ad revenues drawn by Alphabet Inc. (NASDAQ:GOOG) and Meta Platforms Inc. (NASDAQ:FB).
271 hedge funds held positions in Amazon.com, Inc. (NASDAQ:AMZN) at the end of the first quarter, with an aggregate value of more than $48 billion. This made it the most popular stock in the Q1 database of Insider Monkey.
Investment firm Polen Capital talked about Amazon.com, Inc. (NASDAQ:AMZN) in its Q1 2022 investor letter. Here’s what the fund said:
“Amazon has done a terrific job managing through the pandemic, in our view. Many companies struggled to pivot their business model during COVID-19, which represented an existential threat. Amazon had the opposite problem – a surge in demand. The company leaned into this by entering an extremely heavy investment cycle, doubling its fulfillment network and headcount over the past two years. To put this into context, Amazon added 273,000 employees in the last half of 2021 on top of over 400,000 employees the prior year. The company has also made significant Capital Expenditures, adding IT infrastructure for AWS and transportation capacity during this period. This all took place in the face of inflation related to wage increases and higher pricing from third-party carriers supporting the company’s fulfillment network. These heavy investments paid off—AWS grew 40% year over year, reached a $71B annual run rate, and total company revenue posted a two-year annual compounded growth rate of 25%. We believe this heavy investment cycle, like Amazon’s previous ones, will continue to support ongoing growth and will further separate Amazon from its competition while also providing the ability to increase margins through economies of scale. With respect to the margins specifically, AWS and Advertising – two fast-growing businesses – continue to contribute greater operating earnings to the overall business. We believe management has done an excellent job managing through this period and that the company is even stronger today than when COVID-19 first began to spread around the world.”
You can also take a look at 10 Best Gold Stocks To Buy Now and 10 Best Tech Stocks To Invest in Now.
