In this article, we will take a look at the 5 stocks from companies generating high cash flow. To read our analysis of recent market trends, you can go to 12 Stocks from Companies Generating High Cash Flow.
5. Bank of America Corporation (NYSE:BAC)
Free Cash Flow Trailing Twelve Months: $44.6 billion
Number of Hedge Fund Holders: 90
Based in Charlotte, North Carolina-based, Bank of America Corporation (NYSE:BAC) is a leading financial services company offering full range of banking, investing, asset management and other financial and risk management products and services to nearly 69 million consumer and small business clients in the United States.
On October 18, Oppenheimer analyst Chris Kotowski raised the price target on Bank of America Corporation (NYSE:BAC) shares to $49 from $48 and maintained an ‘Outperform’ rating for the shares. The target price increase followed a strong quarterly earnings release which showed a 3% y-o-y increase in total revenue to $25.2 billion and a 10% y-o-y increase in net income to $7.8 billion.
According to the Insider Monkey data on 910 leading hedge funds, 90 hedge funds were long Bank of America Corporation (NYSE:BAC) shares as of Q2 2023. Warren Buffet’s Berkshire Hathaway was the largest hedge fund shareholder with ownership of 1.03 billion shares valued at $29.6 billion.
4. Exxon Mobil Corporation (NYSE:XOM)
Free Cash Flow Trailing Twelve Months: $46.3 billion
Number of Hedge Fund Holders: 71
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.
Exxon Mobil Corporation (NYSE:XOM) has a long history of dividend payments and has increased its annual dividends for 41 consecutive years. The company declared a cash dividend of $0.95 per share for the fourth quarter, 4% more than the previous dividend amount.
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) and Shell Plc (NYSE:SHEL) are the only two stocks on our list of 12 stocks from companies generating high cash flows that belong to the energy industry. This free cash flow generating fuel stock has been a consistent component of hedge fund portfolios. As of Q2 2023, 71 of the leading hedge funds held its shares worth $3.1 billion.
3. Microsoft Corporation (NASDAQ:MSFT)
Free Cash Flow Trailing Twelve Months: $59.5 billion
Number of Hedge Fund Holders: 300
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. Microsoft Corporation (NASDAQ:MSFT) is using its AI capabilities to improve its existing products and services including Bing Search, Cloud, as well as its Office Suite.
In its Q2 2023 investor letter, Third Point Management, a New York-based investment advisor, made the following comments about Microsoft Corporation (NASDAQ:MSFT):
“Microsoft’s introduction of its AI-assisted Office Copilot software, which could increase its revenues by as much as $25 billion or more on software sales alone. While it is impossible to quantify precisely, we are confident that from a macroeconomic standpoint, AI will have enormous impact on labor productivity, business profit margins, and individual well-being, and act as a counter to the inflationary pressures that have emerged over the last few years. We expect enterprise applications to dramatically accelerate by the early part of 2024.”
As of Q2 2023, Microsoft Corporation (NASDAQ:MSFT) ranks highest on our list of 12 stock from companies generating high cash flow in terms of hedge fund sentiment as it was the most sought-after stock among the 910 hedge funds tracked by Insider Monkey. 300 of these hedge funds held shares in the software giant, valued at $69.8 billion.
2. Alphabet Inc. (NASDAQ:GOOGL)
Free Cash Flow Trailing Twelve Months: 204
Number of Hedge Fund Holders: $71.1 billion
Alphabet Inc. (NASDAQ:GOOGL), based in Mountain View, California, is the parent company of several companies including Google, Verily Life Sciences, GV (formerly Google Ventures), Calico, and X-the moonshot factory. Majority of its revenue is generated by Google Services which comprises of ads, Android, Chrome, hardware, Gmail, Google Drive, Google Maps, Google Photos, Google Play, Search, and YouTube.
On October 24, Alphabet Inc. (NASDAQ:GOOGL) released financial results for the three months ended September 30. Its revenues increased by 11% y-o-y to $76.7 billion while net income surged by 42% y-o-y to $19.7 billion.
Following the earnings release, Oppenheimer analyst Jason Helfstein reiterated an ‘Outperform’ rating for Alphabet Inc. (NASDAQ:GOOGL) shares with a price target of $160 per share.
1. Apple Inc. (NASDAQ:AAPL)
Free Cash Flow Trailing Twelve Months: $101.0 billion
Number of Hedge Fund Holders: 135
Apple Inc. (NASDAQ:AAPL) is a leading technology company focused on the designing, manufacturing, and marketing of smartphones, personal computers, tablets, wearables, and accessories, and sells a variety of related services.
Apple Inc. (NASDAQ:AAPL) released worldwide the latest version of its flagship smartphone titled iPhone 15, on September 22 earlier this year. Sales for the models have remained strong in the early period and analysts expect positive results from the release.
On October 25, Deutsche Bank lowered the price target on Apple Inc. (NASDAQ:AAPL) shares to $200 from $210 but maintained an ‘Overweight’ rating for the shares.
As of Q2 2023, Apple Inc. (NASDAQ:AAPL) shares were held by 135 of the 910 hedge funds tracked by Insider Monkey with the total shares held by hedge funds valued at a whopping $194.0 billion. Warren Buffet’s Berkshire Hathaway was its biggest shareholder with ownership of 915.6 million shares valued at $177.6 billion.
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