Ken Fisher Stock Portfolio: Top 10 Stock Picks

Published on November 15, 2022 at 6:43 pm by Hamna Asim in Hedge Funds, News

In this article, we discuss the top 10 stock picks from the Ken Fisher portfolio. If you want to see more stocks in this selection, check out Ken Fisher Stock Portfolio: Top 5 Stock Picks.

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. (NASDAQ:META) 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. (NASDAQ:META) 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. (NASDAQ:META) 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. (NASDAQ:META) 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. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN), Meta Platforms, Inc. (NASDAQ:META) is also backed by Ken Fisher.

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

“Meta Platforms, Inc. (NASDAQ:META), 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 (NYSE:TSM) worth $1.7 billion, representing 1.29% of his total 13F portfolio.

On November 10, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) 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 (NYSE:TSM) 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 (NYSE:TSM) 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 (NYSE:TSM) 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 (NYSE:TSM) in its Q3 2022 investor letter:

“Semiconductor giant Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) 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. (NYSE:CRM) 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. (NYSE:CRM) 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. (NYSE:CRM), 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. (NYSE:CRM) 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. (NYSE:CRM) (-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. (NASDAQ:ASML) 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. (NASDAQ:ASML) 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. (NASDAQ:ASML) 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. (NASDAQ:ASML), 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. (NASDAQ:ASML) 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 (NYSE:AXP) worth $2 billion, representing 1.52% of the total portfolio.

On October 21, American Express Company (NYSE:AXP) 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 (NYSE:AXP) 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 (NYSE:AXP) 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 (NYSE:AXP) 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. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN), American Express Company (NYSE:AXP) 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 (NYSE:AXP) was one of them. Here is what the fund said:

“In financials, American Express Company (NYSE:AXP) 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.”

Click to continue reading and see Ken Fisher Stock Portfolio: Top 5 Stock Picks.

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Published on December 13, 2024 at by Inan Dogan, PhD

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