In this article, we will take a look at the 5 stocks that will always grow. To see more such companies, go directly to 12 Stocks That Will Always Grow.
5. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 111
UnitedHealth Group Incorporated (NYSE:UNH) has become a giant in the healthcare and insurance sector in the US. Over the past few years, UnitedHealth Group Incorporated (NYSE:UNH) has bought several smaller players and increased its dominance in the sector. UnitedHealth Group Incorporated (NYSE:UNH) has the biggest chunk of the health insurance market in the US.
In May 2023 Ana Gupte, principal at AG Health Advisors., said, according to CNBC, that if they were to pick “one stock, only one stock to buy, I’d buy UnitedHealth.”
The analyst also noted that UnitedHealth Group Incorporated (NYSE:UNH) has become “immune” to economic cycles due to its diverse business model.
“It makes it very attractive from an economic cycle and a macro environment perspective,” Gupte added.
UnitedHealth Group Incorporated (NYSE:UNH) is also a strong dividend-paying stock.
As of the end of the second quarter of 2023, 111 hedge funds tracked by Insider Monkey were long UnitedHealth Group Incorporated (NYSE:UNH).
Mairs & Power Growth Fund made the following comment about UnitedHealth Group Incorporated (NYSE:UNH) in its second quarter 2023 investor letter:
“Notable detractors to performance in the first half were US Bank (USB), Charles Schwab (SCHW), and UnitedHealth Group Incorporated (NYSE:UNH), which were down 22.09%, 31.65%, and 8.65%, respectively. Another detractor from relative performance was UnitedHealth Group, which was down 8.65%. However, we have a positive long-term view of the company, headquartered in Minnesota, and especially its potential when it comes to harnessing its vast amounts of patient data via AI. Additionally, its Optum unit, which provides technology and data-driven care delivery, has AI-enabled tools that can help healthcare providers drive more efficient and accurate care to patients.”
4. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 204
Alphabet Inc. (NASDAQ:GOOG) shares will always grow because the company has a diverse business model, spanning advertising, Cloud, AI, and other innovative technologies like self-driving cars. Currently, Alphabet Inc. (NASDAQ:GOOG) dominates the search engine market, with a 93% market share. Its closest competitor (Bing) has just 3% market share. It’ll take years if not decades for other companies to catch-up. Alphabet Inc. (NASDAQ:GOOG) also owns YouTube, which is the go-to video platform for billions of people. Alphabet Inc. (NASDAQ:GOOG)’s Cloud and AI businesses will offset the threats the company faces from competitors in the search business.
As of the end of the second quarter of 2023, 204 hedge funds out of the 910 funds in Insider Monkey’s database were long Alphabet Inc. (NASDAQ:GOOG). The biggest stakeholder of Alphabet Inc. (NASDAQ:GOOG) was Natixis Global Asset Management’s Harris Associates which owns a $3.2 billion stake in the company.
Giverny Capital Asset Management made the following comment about Alphabet Inc. (NASDAQ:GOOG) in its second quarter 2023 investor letter:
“I have believed for a while that we’re better served with a lower weight to the tech giants – we own Alphabet Inc. (NASDAQ:GOOG) (8.1% of our model portfolio at the end of June) and Meta (5.2%) for a 13.3% exposure, or about half the Index’s weight in the giants. And while Alphabet’s 36% return for the first half and Meta’s 138% return were gratefully received, I’m pleased to report that if we strip out that contribution to our overall return, the other 23 stocks we own, constituting 85% of our portfolio (with cash making up the balance), were up 10.2% on a weighted basis.
GCAM owns two of the seven tech mega caps in Alphabet and Meta, and they enjoyed similar rises. As mentioned, Alphabet A&C shares rose 36% while Meta rose 138%. Together, they added 2.38 percentage points to the overall Index return, meaning these seven tech giants cumulatively generated 12.4 percentage points of return, or roughly three-quarters of the Index’s return.
Alphabet and Meta combined sport a $2.25 trillion market cap and between them should generate roughly $120 billion of pretax profit this year. That’s a multiple of 19 times pretax profit, a substantial discount to Microsoft and Apple, and an even larger discount to Amazon, Nvidia and Tesla.”
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 225
Meta Platforms, Inc. (NASDAQ:META) has almost half of the world population hooked on its platforms – Facebook, Instagram, Messenger, WhatsApp and now Threads It remains the market leader in the social media industry, which will only grow despite massive changes in user behavior.
Wedbush Securities Managing Director Scott Devitt recently started covering Meta Platforms, Inc. (NASDAQ:META) and set a $350 price target. The analyst believes AI will be one of the boosters for Meta Platforms, Inc. (NASDAQ:META) in the future.
As of the end of the second quarter of 2023, 225 hedge funds tracked by Insider Monkey were long Meta Platforms, Inc. (NASDAQ:META).
Giverny Capital Asset Management made the following comment about Meta Platforms, Inc. (NASDAQ:META) in its second quarter 2023 investor letter:
“I have believed for a while that we’re better served with a lower weight to the tech giants – we own Alphabet (8.1% of our model portfolio at the end of June) and Meta Platforms, Inc. (NASDAQ:META) (5.2%) for a 13.3% exposure, or about half the Index’s weight in the giants. And while Alphabet’s 36% return for the first half and Meta’s 138% return were gratefully received, I’m pleased to report that if we strip out that contribution to our overall return, the other 23 stocks we own, constituting 85% of our portfolio (with cash making up the balance), were up 10.2% on a weighted basis.
GCAM owns two of the seven tech mega caps in Alphabet and Meta, and they enjoyed similar rises. As mentioned, Alphabet A&C shares rose 36% while Meta rose 138%. Together, they added 2.38 percentage points to the overall Index return, meaning these seven tech giants cumulatively generated 12.4 percentage points of return, or roughly three-quarters of the Index’s return.
Alphabet and Meta combined sport a $2.25 trillion market cap and between them should generate roughly $120 billion of pretax profit this year. That’s a multiple of 19 times pretax profit, a substantial discount to Microsoft and Apple, and an even larger discount to Amazon, Nvidia and Tesla.”
2. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 243
Amazon.com, Inc. (NASDAQ:AMZN) is the biggest ecommerce retailer. Out of every $5 spent on ecommerce, $2 go to Amazon.com, Inc. (NASDAQ:AMZN), according to data by Insider Intelligence. With a 40% market share, Amazon.com, Inc. (NASDAQ:AMZN) has almost no major rival.
Amazon.com, Inc. (NASDAQ:AMZN) also leads the Cloud industry with its AWS business, which is offering new products and services to allow businesses to develop and deploy applications for AI and machine learning. Amazon.com, Inc. (NASDAQ:AMZN) enjoys a market share of about 32%-34% in the Cloud market, while its competitor MSFT only has a 23% market share.
Mairs & Power Growth Fund made the following comment about Amazon.com, Inc. (NASDAQ:AMZN) in its second quarter 2023 investor letter:
“Regarding stock selection in the first half, Nvidia (NVDA) was a massive outperformer, up 189.54%. Amazon.com, Inc. (NASDAQ:AMZN) and Microsoft were also positive contributors, up 55.19% and 42.66%, respectively. All three stocks benefited from a renewed interest in growth stocks by investors in the first half of the year.
Amazon had an impressive first half of the year as well with growth out of its retail segment but slightly slower growth in its cloud business. Customers optimized workloads for existing capacity they were already paying for rather than adding incremental capacity in the current environment. We remain very excited about the opportunity for the company to reduce the labor needs of its retail segment through the use of technology and automation in the future.”
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 289
Office. Operating system. Cloud computing. Xbox. And now AI. Microsoft Corporation (NASDAQ:MSFT) is literally everywhere and it’s evident how MSFT shares will keep growing in the years to come. Microsoft Corporation (NASDAQ:MSFT) is the second biggest player in the Cloud market, second only to Amazon, and continuously gaining. A 2021 study showed Microsoft Corporation (NASDAQ:MSFT) having a whopping 85% market share of the office productivity market. Microsoft Corporation (NASDAQ:MSFT) is bundling software and has become a one-stop shop for all things work productivity through Teams, Office, Skype, LinkedIn and other tools and platforms. Microsoft Corporation (NASDAQ:MSFT) is also expected to gain final approvals to buy Activision. And in the AI race Microsoft Corporation (NASDAQ:MSFT) is the frontrunner due to its huge investments in OpenAI. Microsoft Corporation (NASDAQ:MSFT) Bing search product is also expected to gain market share in the future.
Mairs & Power Growth Fund made the following comment about Microsoft Corporation (NASDAQ:MSFT) in its second quarter 2023 investor letter:
“Regarding stock selection in the first half, Nvidia (NVDA) was a massive outperformer, up 189.54%. Amazon and Microsoft Corporation (NASDAQ:MSFT) were also positive contributors, up 55.19% and 42.66%, respectively. All three stocks benefited from a renewed interest in growth stocks by investors in the first half of the year.
Microsoft (MSFT) was another positive contributor to performance in the first half. The company continued to take share in cloud computing. Its strong relationships with customers, as well as knowledge of their businesses, differentiates its offering, which is also helped by leading investments in AI. We expect the company will continue to integrate AI tools into most of its productivity suite of software in the not-too-distant future. This should help with employee productivity and the labor constraints of most of its customers.”
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