Ken Fisher Stock Portfolio: Top 5 Stock Picks

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

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. (NYSE:HD), worth $2.25 billion and representing 1.68% of the total 13F securities. 

On November 15, The Home Depot, Inc. (NYSE:HD) 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. (NYSE:HD) 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. (NYSE:HD) 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. (NYSE:HD) 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. (NYSE:HD) in its Q2 2022 investor letter:

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

On November 14, after reports that Amazon.com, Inc. (NASDAQ:AMZN) 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. (NASDAQ:AMZN)’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. (NASDAQ:AMZN).

According to Insider Monkey’s Q2 data, 252 hedge funds were long Amazon.com, Inc. (NASDAQ:AMZN), 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. (NASDAQ:AMZN) in its Q3 2022 investor letter:

“Amazon.com, Inc. (NASDAQ:AMZN) 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 (NASDAQ:MSFT) by 2% in the third quarter of 2022. He owns more than 29 million shares of Microsoft Corporation (NASDAQ:MSFT) 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 (NASDAQ:MSFT) with a Neutral rating and a $234 price target. The analyst sees short-term headwinds for Microsoft Corporation (NASDAQ:MSFT) 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 (NASDAQ:MSFT), 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 (NASDAQ:MSFT) was one of them. Here is what the fund said:

“Shares of Microsoft Corporation (NASDAQ:MSFT), 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. (NASDAQ:AAPL) is the largest holding in the Ken Fisher stock portfolio. Fisher Asset Management owns more than 59 million shares of Apple Inc. (NASDAQ:AAPL) 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. (NASDAQ:AAPL) 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. (NASDAQ:AAPL) with a $200 price target.

According to Insider Monkey’s data, 128 hedge funds were bullish on Apple Inc. (NASDAQ:AAPL) 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. (NASDAQ:AAPL) in its Q3 2022 investor letter:

“Apple Inc. (NASDAQ:AAPL) 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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