Growth Stock Portfolio: 5 Stock Picks By Warren Buffett

3. Moody’s Corporation (NYSE:MCO)

Number of Hedge Fund Holders: 48

P/E Ratio as of November 9: 31.92

Moody’s Corporation (NYSE:MCO) is a New York-based integrated risk assessment firm. It operates in two segments – Moody’s Investors Service and Moody’s Analytics. It is one of the best growth stocks according to Warren Buffett. The Berkshire portfolio has 24.6 million shares of Moody’s Corporation (NYSE:MCO) as of Q2 2022, worth $6.70 billion. 

On November 7, Atlantic Equities analyst Simon Clinch raised the price target on Moody’s Corporation (NYSE:MCO) to $292 from $290 and kept a Neutral rating on the shares following the Q3 results. Moody’s Corporation (NYSE:MCO) is largely exposed to the difficult fundamentals in global debt issuance, the analyst told investors in a research note.

According to Insider Monkey’s data, 48 hedge funds were bullish on Moody’s Corporation (NYSE:MCO) at the end of June 2022, compared to 56 funds in the earlier quarter. Chris Hohn’s TCI Fund Management is one of the leading position holders in the company, with 8.2 million shares worth $2.24 billion. 

Here is what Qualivian Investment Partners has to say about Moody’s Corporation (NYSE:MCO) in its Q2 2021 investor letter:

“Moody’s: Revenue, operating profit margins, and EPS all exceeded expectations, and annual guidance for these items (and for free cash flow) was raised. In MIS (Moody’s Investors Service) which houses the traditional ratings business, the outlook for debt issuance was raised for the remainder of the year, while MA (Moody’s Analytics) also came in ahead of expectations. The company leveraged strong revenue growth with strong operating profit margin improvement of 200 bps, with EPS coming in $0.22 ahead of consensus estimates. Management alluded to having interesting opportunities in their M&A pipeline, which we will have to assess when the time comes, but Moody’s management team has been very effective at allocating capital in the past toward value-creating bolt-on acquisitions, especially in their Moody’s Analytics business, a key growth driver for the company.”