Goldman Sachs’ Top Fund Manager Stock Picks: 25 Best Overweight Stocks

22. Kenvue Inc. (NYSE:KVUE)

Number of Hedge Fund Holders In Q2 2024: 58

Overweight Percentage: 0.09%

Kenvue Inc. (NYSE:KVUE) is a sizeable health and well being firm that sells well known products such as Tylenol, Nicorette, Neutrogena, Band-Aid, and others. Consequently, the firm has a sizeable moat in the industry not only because of brand recognition but also because of margins achieved through economies of scale. As of Q2, Kenvue Inc. (NYSE:KVUE) had cash and equivalents of $1 billion and gross and operating margins of 60% and 17.8%. It is a former J&J business, and the shares are up 7.8% year to date courtesy of a massive 14.8% jump in August. This came on the back of strong second quarter earnings, with Kenvue Inc. (NYSE:KVUE)’s EPS and revenue of $0.32 and $4 billion beating Wall Street estimates of $0.28 and $3.93 billion. Management also reiterated a high end full year sales growth guidance of 3%, and Kenvue Inc. (NYSE:KVUE)’s stock was also helped by the fact that August start was also marked by investor worries of a recession which saw consumer staples stocks hold their ground when compared to high growth stocks. Looking ahead, could see additional tailwinds if beauty spending kicks up in a growing economy.

Oakmark Funds mentioned Kenvue Inc. (NYSE:KVUE) in its Q2 2024 investor letter. Here is what the fund said:

“Kenvue became the largest standalone consumer health company following its split-o from Johnson & Johnson in May 2023. The company’s highly recognizable brands, such as Neutrogena, Listerine, Tylenol and Band-Aid, have been market share leaders in their respective categories for generations. However, Kenvue’s rst year as a public company was clouded by litigation and market share losses in certain categories. As a result, Kenvue now trades for just 16.5x trailing earnings, a substantial discount to the market and other consumer health and packaged goods companies. We see an opportunity for the company to improve eciency and re-invest the cost savings into increased product development and marketing, which should help improve its growth and brand equity.