Ken Fisher Stock Portfolio: Top 10 Stock Picks

In this article, we discuss the top 10 stock picks from the Ken Fisher portfolio.

Fisher Asset Management founder Ken Fisher believes the Federal Reserve’s actions will not help control inflation but also stressed that the U.S. economy is unlikely to plunge into recession, given that loan growth is “robust.” He told Fox Business on November 3: 

“I don’t believe what the Fed is doing right now actually kills inflation. I don’t believe, as I have said before, that the Fed can kneecap the economy by raising rates the way it is because right now the banks’ loan base cost them almost nothing. When the Fed raises short rates it increases the incentive for banks to make short-term loans because the spread gets bigger.”

Ken Fisher recently pointed out some positive fundamentals that investors might be missing due to the uncertainty and short-term headwinds blanketing the stock market currently. In addition to strong bank loan growth, unemployment remains low in the United States, and travel is exceptionally robust and increasing. Historically, these factors are inconsistent with the beginnings of recessions, as per Fisher. Some of the top holdings in the Ken Fisher portfolio include Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN). 

Our Methodology 

We selected the top 10 stocks from the Ken Fisher portfolio as of the end of the third quarter of 2022 for this analysis. The stocks are arranged according to the hedge fund’s stake value in each holding. Insider Monkey’s database of 895 elite hedge funds tracked as of the end of the second quarter of 2022 was used to assess the hedge fund sentiment around the securities. 

Ken Fisher Stock Portfolio: Top Stock Picks

10. Meta Platforms, Inc. (NASDAQ:META)

Number of Hedge Fund Holders: 184

Fisher Asset Management’s Stake Value: $1,604,616,000

Securities filings for the third quarter of 2022 reveal that Fisher Asset Management held 11.8 million shares of Meta Platforms, Inc. (NASDAQ:META), worth $1.60 billion and representing 1.2% of the total 13F portfolio. Ken Fisher strengthened his hold on Meta Platforms, Inc. by 3% in the September quarter. The stock has been part of the Fisher portfolio since the first quarter of 2014. 

On November 15, Meta Platforms, Inc. filed to exchange up to $2.75 billion of 3.500% senior notes due 2027. The filing also suggests an offering to exchange $3 billion of 3.850% senior notes due 2032, $2.75 billion of 4.450% senior notes due 2052, and $1.5 billion of 4.650% senior notes due 2062. 

Canaccord analyst Maria Ripps on November 10 reiterated a Buy rating on Meta Platforms, Inc. but lowered the price target on the shares to $170 from $200. The analyst said she trimmed her price target to factor in the latest multiple compression and views the layoffs and hiring freeze announcements as incrementally optimistic, particularly due to the ongoing macro uncertainty and the industry-wide weakness in digital advertising.

According to Insider Monkey’s data, 184 hedge funds were long Meta Platforms, Inc. at the end of Q2 2022, compared to 200 funds in the prior quarter. Boykin Curry’s Eagle Capital Management is a prominent position holder in the company, with 7.3 million shares worth $1.17 billion. 

Like Apple Inc., Microsoft Corporation, and Amazon.com, Inc., Meta Platforms, Inc. is also backed by Ken Fisher. 

ClearBridge Investments made the following comment about Meta Platforms, Inc. in its Q3 2022 investor letter:

“Meta Platforms, Inc., one of two overweights among the mega cap stocks, underperformed in the third quarter (-15.9%) and is the Strategy’s largest detractor year to date. Meta has also trailed mega cap advertising peer Alphabet, which we don’t own, as revenue growth has slowed due to tough comparables to a strong e-commerce environment in early 2021, negative impacts from Apple’s privacy changes and rising expenses.

While we have trimmed our position close to 20%, we remain invested as we do not think the stocks’ valuation at about 13x consensus 2023 earnings appropriately reflects its long-term earnings and free cash flow generation potential. Despite current revenue headwinds, we believe Meta is well-positioned to navigate industry wide changes to advertising targeting and its transition to the Reels short-form video format will monetize in the coming years, helping to re-accelerate revenue growth.

We also welcome Meta’s implementation of cost-cutting measures, which should help uncover the company’s high underlying profitability. Lastly, we see Meta’s investments in augmented reality as a call option for long-duration investors.”

9. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)

Number of Hedge Fund Holders: 72

Fisher Asset Management’s Stake Value: $1,722,650,000

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) manufactures and sells integrated circuits and other semiconductor devices in Taiwan, China, Europe, the Middle East, Africa, Japan, the United States, and internationally. Ken Fisher, as of Q3 2022, owns over 25 million shares of Taiwan Semiconductor Manufacturing Company Limited worth $1.7 billion, representing 1.29% of his total 13F portfolio. 

On November 10, Taiwan Semiconductor Manufacturing Company Limited shares climbed approximately 5% as the company said its October sales rose 56% year-over-year. For the month ending October 2022, the company generated NT$210.3 billion in revenue, up from NT$134.5 billion in the same period a year ago. 

Goldman Sachs analyst Bruce Lu downgraded Taiwan Semiconductor Manufacturing Company Limited on October 13 to Buy from Conviction Buy with a price target of $89, down from $126. The analyst noted that the company’s management has turned “more conservative”, given an impact from demand weakness, especially for its N7 nodes. Taiwan Semiconductor Manufacturing Company Limited management has also guided down 2022 capex to $36 billion from nearly $40 billion, partially due to uncertain demand, the analyst told investors.

According to Insider Monkey’s data, 72 hedge funds were long Taiwan Semiconductor Manufacturing Company Limited at the end of Q2 2022, compared to 81 funds in the prior quarter. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is the largest stakeholder of the company, with 14.6 million shares worth $1.19 billion. 

Baron Funds made the following comment about Taiwan Semiconductor Manufacturing Company Limited in its Q3 2022 investor letter:

“Semiconductor giant Taiwan Semiconductor Manufacturing Company Limited detracted from performance due to the global macroeconomic slowdown and softening demand for consumer electronics. We retain conviction that Taiwan Semi’s technological leadership, pricing power, and exposure to secular growth markets, including high-performance computing, automotive, and IoT, will allow the company to deliver strong revenue growth over the next several years.”

8. Salesforce, Inc. (NYSE:CRM)

Number of Hedge Fund Holders: 116

Fisher Asset Management’s Stake Value: $1,830,503,000

Salesforce, Inc. (NYSE:CRM), a California-based customer relationship management technology company, is one of the top picks from the Ken Fisher stock portfolio. Fisher owns 12.7 million shares of Salesforce, Inc. worth $1.8 billion as of Q3 2022, representing 1.37% of the total 13F securities. 

Mizuho analyst Gregg Moskowitz on November 15 maintained a Buy recommendation on Salesforce, Inc. but trimmed the price target on the shares to $225 from $235. Macro and geopolitical factors have continued to hammer the software sector, and many investors “understandably remain cautious about increasing their software exposure at this time,” the analyst told investors in a research note.

According to Insider Monkey’s Q2 data, 116 hedge funds were long Salesforce, Inc., compared to 114 funds in the prior quarter. Harris Associates held a prominent stake in the company, comprising more than 5 million shares worth $829 million. 

ClearBridge Investments made the following comment about Salesforce, Inc. in its Q3 2022 investor letter:

“Software has been a solid long-term performer for the Strategy and a key point of differentiation versus the benchmark. But even recurring revenue businesses enabling digital transformation are not immune from the vagaries of the COVID-19 recovery. Salesforce, Inc. (-12.8%) has detracted from results due to slowing revenue growth driven by a combination of factors, including pull-forward of enterprise digitization demand during COVID-19, some operational missteps, and lengthening sales cycles.

We believe the company still has ample room for revenue growth across its various platforms and should benefit from budget consolidation as customers seek control over tech spending in a weakening economy. We also see significant room for margin expansion. While we have trimmed our Salesforce (CRM) exposure, we maintain confidence that the stock will re-rate to a level that reflects its growth potential.”

7. ASML Holding N.V. (NASDAQ:ASML)

Number of Hedge Fund Holders: 47

Fisher Asset Management’s Stake Value: $1,949,619,000

ASML Holding N.V. (NASDAQ:ASML) is a Netherlands-based company that develops, produces, markets, and services advanced semiconductor equipment systems for memory and logic chipmakers. In Q3 2022, Ken Fisher owned 4.7 million shares of ASML Holding N.V. worth approximately $2 billion, representing 1.46% of the total 13F securities. Ken Fisher boosted his stake in the company by 3% in the third quarter. 

On November 10, ASML Holding N.V. stock gained 14% as the company reported that it would launch a $12 billion share repurchase program and lifted its revenue forecast for 2025, sparking a rally in other semiconductor equipment stocks as well. The company also paid a €1.37 per share interim dividend on November 14. 

Credit Suisse analyst Adithya Metuku on November 14 raised the price target on ASML Holding N.V. to EUR 745 from EUR 732 and kept an Outperform rating on the shares.

According to the second quarter database of Insider Monkey, 47 hedge funds were long ASML Holding N.V., compared to 46 funds in the preceding quarter. Arrowstreet Capital held a significant position in the company, with 726,787 shares worth about $346 million. 

Here is what Baron Opportunity Fund has to say about ASML Holding N.V. in its Q2 2022 investor letter:

“ASML Holding N.V. designs and manufactures semiconductor production equipment. It specializes in photolithography equipment, where light sources are used to photo-reactively create patterns on wafers that become printed circuits. ASML is the dominant leader across all types of lithography but, most importantly, is the only company selling equipment for extreme ultra-violet (EUV) lithography, the latest generation technology.

Indeed, because of the stalling out of Moore’s Law, advanced lithography of larger and multi-patterned silicon chips has been critical for leading-edge chip manufacturing and continued improvement in semiconductor chip performance over time. The company is well positioned to continue growing above industry rates as it rapidly adds capacity across its entire business to meet rising industry demand, especially from leading-edge customers continuing to invest to stay ahead of their competitors and drive chip performance forward.

Additionally, the introduction of high-NA EUV technology in the middle of the decade will add another leg to the growth opportunity.”

6. American Express Company (NYSE:AXP)

Number of Hedge Fund Holders: 67

Fisher Asset Management’s Stake Value: $2,028,883,000

American Express Company (NYSE:AXP) is an American multinational firm that provides credit card products and travel-related services worldwide. As per the 13F filings for the third quarter of 2022, Ken Fisher owns over 15 million shares of American Express Company worth $2 billion, representing 1.52% of the total portfolio. 

On October 21, American Express Company reported a Q3 GAAP EPS of $2.47, beating market estimates by $0.06. The revenue of $13.56 billion climbed 24.1% year-over-year, falling short of Wall Street consensus by $20 million. Based on the company’s performance to date, it still expects full-year 2022 revenue growth of 23% to 25%, compared to a 25.24% consensus. American Express Company now forecasts to clock in ahead of its original full-year EPS guidance range of $9.25 to $9.65, versus a $9.84 consensus.

Wells Fargo analyst Donald Fandetti on October 24 reiterated an Overweight rating on American Express Company but slashed the price target on the shares to $170 from $180 following the Q3 results. Increased funding costs have had a fairly neutral effect so far, though over time it will become a moderate headwind, the analyst contended.

According to Insider Monkey’s data, 67 hedge funds were bullish on American Express Company at the end of Q2 2022, compared to 69 funds in the preceding quarter. Warren Buffett’s Berkshire Hathaway is the biggest position holder in the company. 

In addition to Apple Inc., Microsoft Corporation, and Amazon.com, Inc., American Express Company is one of the top picks of Ken Fisher as of Q3 2022. 

In its Q2 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and American Express Company was one of them. Here is what the fund said:

“In financials, American Express Company 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.”

5. The Home Depot, Inc. (NYSE:HD)

Number of Hedge Fund Holders: 80

Fisher Asset Management’s Stake Value: $2,253,772,000

The Home Depot, Inc. (NYSE:HD), an American home improvement retailer, is one of the top stock picks from the Ken Fisher portfolio. In Q3 2022, Fisher owned more than 8 million shares of The Home Depot, Inc., worth $2.25 billion and representing 1.68% of the total 13F securities. 

On November 15, The Home Depot, Inc. reported a Q3 GAAP EPS of $4.24 and a revenue of $38.87 billion, topping analysts’ estimates by $0.13 and $910 million, respectively. For FY 2022, The Home Depot, Inc. reported total sales growth and comparable sales growth of approximately 3% and an operating margin of 15.4%. 

JPMorgan analyst Christopher Horvers on November 15 maintained an Overweight rating on The Home Depot, Inc. but lowered the price target on the shares to $300 from $347. In 2023, the analyst believes housing names “should see a greater degree of lagged negative revisions.”

According to Insider Monkey’s data, 80 hedge funds were bullish on The Home Depot, Inc. at the end of the second quarter of 2022, compared to 75 funds in the prior quarter. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital held a notable position in the company, comprising 1.76 million shares worth $484.5 million. 

Here is what Diamond Hill Capital specifically said about The Home Depot, Inc. in its Q2 2022 investor letter:

“The Home Depot, Inc. is a high-quality operator in the home improvement industry. Macroeconomic concerns, particularly the rise in mortgage rates, caused the share price to pull back and trade at a greater discount to our estimate of intrinsic value. We believe Home Depot is well positioned to continue gaining share due to its premium real estate locations, strong operations and recent investments in its supply chain. We like Home Depot’s exposure to the professional customer and believe in its ability to take market share in this segment as we believe home improvement spending has the potential to remain resilient in upcoming years.”

4. Alphabet Inc. (NASDAQ:GOOG)

Number of Hedge Fund Holders: 153

Fisher Asset Management’s Stake Value: $4,062,723,000

Alphabet Inc. (NASDAQ:GOOG) is one of the top holdings in the Ken Fisher stock portfolio. Ken Fisher strengthened his position in Alphabet Inc. by a whopping 1929% in the third quarter of 2022, holding 42.5 million shares worth over $4 billion, representing 3.04% of the total portfolio. 

On November 15, Morgan Stanley analyst Brian Nowak reiterated an Overweight rating on Alphabet Inc. but trimmed the price target on the shares to $120 from $125. Indicators of a soft ad market continued to grow through Q3 earnings season as 14 out of the 19 companies he covers in the space either missed Q3 ad revenue forecasts or guided to slower than anticipated forward growth, the analyst told investors. 

According to Insider Monkey’s data, Alphabet Inc. was part of 153 hedge fund portfolios at the end of June 2022, compared to 160 funds in the prior quarter. Chris Hohn’s TCI Fund Management held a notable stake in the company, with 2.5 million shares worth $5.4 billion. 

Here is what Mayar Capital has to say about Alphabet Inc. in its Q3 2022 investor letter:

“In early January this year – which admittedly feels like eons ago – US President Joe Biden was pushing Americans to take up the government’s offer of free COVID tests to help tackle the surging omicron variant. How did Biden respond when citizens asked about the availability of these tests?

“Google it!”

This advice, undoubtedly well-meant, was roundly scoffed at by the press, however. It seemed too obvious to be very helpful.

Anyway, the anecdote serves to introduce you to one of our largest holdings, Alphabet; the parent company of Google. Note that first, Alphabet’s original and core product – its search engine – has entered our common vocabulary as a verb. ‘Googling’ something has the same meaning as ‘researching’ or ‘finding an answer to’ something. Second, the reason Biden’s advice was met with such opprobrium was because Googling something has become almost second nature to us now.

These two observations reveal a lot about Google’s strength in the search engine market, in which it has a share of over 90 percent. Because internet search is almost the prototypical network, Google has benefitted from – and we think is also protected by – the huge competitive advantage its scale brings – both to those asking the questions and those providing the answers. The Google search platform becomes increasingly useful to anyone seeking information as a greater volume of stuff becomes available. This starts a virtuous cycle that results in a colossal market share for Google itself. In the language of business strategists, Google benefits from vast network effects.

Because Google’s search results are viewed by billions of eyeballs every day, its search page ‘real estate’ is understandably very valuable to those with goods and services to sell. Advertising revenues from this ‘real estate’ as well as that from its other properties such as Mail, Maps, and so on, totaled almost USD 150b in 2021; amounting to almost 58% of the company’s revenues. Ad sales on YouTube, also owned by Alphabet, brought in another USD 28b. With the secular shift of the advertising spend to digital channels – over which Alphabet has a tight grip – we estimate the company has a share of around 40% of the digital advertising market and is probably the most valuable advertising property in the world…” (Click here to see the full text)

3. Amazon.com, Inc. (NASDAQ:AMZN)

Number of Hedge Fund Holders: 252

Fisher Asset Management’s Stake Value: $5,638,171,000

Amazon.com, Inc. is one of the largest stock picks of Ken Fisher as of Q3 2022. The billionaire owns close to 50 million Amazon.com, Inc. shares worth $5.6 billion, representing 4.22% of the total 13F securities. Ken Fisher boosted his Amazon.com, Inc. stake by 3% during the September quarter. 

On November 14, after reports that Amazon.com, Inc. plans to lay off about 10,000 employees, JMP Securities analyst Nicholas Jones said that he is “not surprised by the announcement given last week’s news of Amazon reviewing cost-cutting options aimed at unprofitable areas of the company.” Higher capital costs and weak consumer goods sales have impacted Amazon.com, Inc.’s e-commerce business, the analyst added. Further, AWS has seen softness as well, as monitored in Q3 results and insinuated in Q4 guidance. The analyst does not view the news as momentous, and maintained an Outperform rating and a $140 price target on Amazon.com, Inc..

According to Insider Monkey’s Q2 data, 252 hedge funds were long Amazon.com, Inc., compared to 272 funds in the prior quarter. Jaime Sterne’s Skye Global Management is a prominent stakeholder of the company, with 15.4 million shares worth $1.6 billion. 

Alger Capital made the following comment about Amazon.com, Inc. in its Q3 2022 investor letter:

“Amazon.com, Inc. is a well-known online retailer and cloud computing leader. The company’s amazon web services business provides utility-scale cloud offerings that facilitate corporate America’s transition to digital systems. Shares outperformed during the quarter as investors were encouraged by strong second-quarter performance despite a challenging macroeconomic environment. Moreover, the company’s retail segment was resilient and avoided discounting inventory like some major retailers did. Revenues for the company’s cloud computing segment, amazon web services (AWS), grew faster than analysts’ estimates during the quarter due to continuing corporate demand for digitization. As a result, management provided better-than-expected forward guidance.”

2. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 258

Fisher Asset Management’s Stake Value: $6,758,014,000

Ken Fisher strengthened his hold on Microsoft Corporation by 2% in the third quarter of 2022. He owns more than 29 million shares of Microsoft Corporation worth $6.75 billion, representing 5.06% of the total 13F holdings. 

On November 2, Macquarie analyst Sarah Hindlian-Bowler initiated coverage of Microsoft Corporation with a Neutral rating and a $234 price target. The analyst sees short-term headwinds for Microsoft Corporation from weakness in the macro environment, cloud pull-in from COVID, softer PC sales, rising energy costs, and low consumer purchasing power. 

According to Insider Monkey’s Q2 data, 258 hedge funds were bullish on Microsoft Corporation, compared to 259 funds in the prior quarter. Chris Hohn’s TCI Fund Management held a significant position in the company, comprising 19.6 million shares worth over $5 billion. 

In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Microsoft Corporation was one of them. Here is what the fund said:

“Shares of Microsoft Corporation, a leading global provider of software solutions, declined 16.6% in the quarter along with the broader software group as well as due to growing concerns of a potential macro-driven slowdown. This is despite the company posting strong quarterly financial results and successfully absorbing headwinds from the war in Ukraine. The company had 21% revenue growth, 23% operating income growth, and 35% growth in Microsoft Cloud (all year-over-year in constant currency), which now represents 47% of total revenues. (read more…)

1. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 128

Fisher Asset Management’s Stake Value: $8,178,151,000

Apple Inc. is the largest holding in the Ken Fisher stock portfolio. Fisher Asset Management owns more than 59 million shares of Apple Inc. worth over $8 billion as of Q3 2022, representing 6.13% of the total 13F securities. 

On November 14, JPMorgan analyst Samik Chatterjee said that the impact of supply chain constraints faced by Apple Inc. at its assembly facility in China is difficult to quantify. However, he trimmed his iPhone shipment target for the December quarter to 74 million from 82 million, and now forecasts fiscal Q1 iPhone and total revenues to plummet year-over-year. The analyst believes the “limited impact on demand” for the iPhone 14 product cycle through fiscal 2023 and the chance to address the shortage in the March quarter “might give long-term investors several attractive buying opportunities into the shares through to the year-end.” The analyst reiterated an Overweight rating on Apple Inc. with a $200 price target.

According to Insider Monkey’s data, 128 hedge funds were bullish on Apple Inc. at the end of the second quarter of 2022, compared to 131 funds in the prior quarter. 

Here is what Wedgewood Partners specifically said about Apple Inc. in its Q3 2022 investor letter:

“Apple Inc. grew revenues +5% (foreign exchange adjusted and excluding Russia) driven by record iPhone revenues that were up about +3% on an exceptional year ago comparison of +50%. Apple’s installed base is over 1.8 billion devices which helps drive a software and services business that has generated almost $80 billion of revenue over the past 4 quarters. As we have highlighted in the past, Apple’s relentless focus on the development and integration between hardware (especially ICs) as well as software, continues to add significant value for customers of its products and services. We expect this favorable competitive dynamic to continue for the foreseeable future.”

You can also take a look at 10 Most Promising Gene Therapy Companies and 10 Best 52-Week Low Stocks To Buy. 

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This article is originally published at Insider Monkey.