In this article, we discuss the 5 stocks to consider in the portfolio of Barack Obama. If you want to read our detailed analysis of these stocks, go directly to Obama Stock Portfolio: 10 Stocks to Consider.
5. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 138
Apple Inc. (NASDAQ:AAPL) recently unveiled new generations of two important products, the MacBook and AirPods, at an event in California. However, since the event did not feature a “new” product, as had been rumored, the share price of the firm only climbed around 1% after the reveal. However, Apple has other plans for growth too. It had announced earlier that it would add more shops inside Target stores before the holiday season rolls around in an attempt to sell more products during the busy time.
JPMorgan analyst Samik Chatterjee has an Overweight rating on Apple Inc. (NASDAQ:AAPL) stock with a price target of $180. The analyst believes the company will deliver a “solid” earnings beat in the fourth quarter based on sales of the new iPhone.
At the end of the second quarter of 2021, 138 hedge funds in the database of Insider Monkey held stakes worth $145 billion in Apple Inc. (NASDAQ:AAPL), up from 127 in the preceding quarter worth $131 billion.
In its Q1 2021 investor letter, Distillate Capital, an asset management firm, highlighted a few stocks and Apple Inc. (NASDAQ:AAPL) was one of them. Here is what the fund said:
“Apple is an even more notable situation and one that highlights our free cash valuation methodology and bears further discussion given its Q3 ‘20 sale from our strategy. For an extended period, Apple was extraordinarily inexpensive on a free cash flow basis and was the largest position in our strategy, exceeding 5% of the portfolio.”
4. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 190
Alphabet Inc. (NASDAQ:GOOGL) provides online advertising services. It is headquartered in California. The company is one of the biggest diversified technology firms in the world. GOOGL is the Class A stock of the firm. The company recently revealed new flagship Pixel smartphones with new silicon chips, aiming to rival competitors like Apple in the phone business.
On September 13, investment advisory Goldman Sachs initiated coverage of Alphabet Inc. (NASDAQ:GOOGL) stock with a Buy rating and a price target of $3,350, highlighting that the internet market segment still provided firms with opportunities for strong growth.
At the end of the second quarter of 2021, 190 hedge funds in the database of Insider Monkey held stakes worth $26 billion in Alphabet Inc. (NASDAQ:GOOGL), up from 185 in the preceding quarter worth $24 billion.
3. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 238
Microsoft Corporation (NASDAQ:MSFT) operates as a diversified technology company. Wedbush analyst Daniel Ives recently kept an Outperform rating on the stock and raised the price target to $375 from $350, underlining that the cloud business of the firm was growing and the fundamentals appeared solid as ever.
Microsoft Corporation (NASDAQ:MSFT) was also recently named among a list of tech companies by Morgan Stanley that are expected to navigate supply chain issues and chip shortages better than peers to deliver impressive earnings for the third quarter.
Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Microsoft Corporation (NASDAQ:MSFT) with 24.8 million shares worth more than $6.7 billion.
In its Q1 2021 investor letter, Polen Capital, an investment management firm, highlighted a few stocks and Microsoft Corporation (NASDAQ:MSFT) was one of them. Here is what the fund said:
“We have written extensively about Microsoft in recent commentaries. It was our leading contributor last year and one of our largest weightings within the Portfolio. It continues to experience business momentum through several dominant, essential, and competitively advantaged businesses, like Office 365 and Azure. The markets it competes for are enormous, which gives the company the ability to compound at scale. In the past quarter alone, the company generated over $40 billion in revenue, representing a 17% growth rate. The inherent operating leverage in Microsoft’s business model continues and led to 34% earnings growth this past quarter. Despite the broad rotation we saw in the first quarter and Microsoft’s robust performance in 2020, we think its business fundamentals continue to exhibit strength, and the stock continues to reflect the fundamentals.”
2. Facebook, Inc. (NASDAQ:FB)
Number of Hedge Fund Holders: 266
There have been numerous reports that Facebook, Inc. (NASDAQ:FB), one of the biggest firms in the world, plans to change its name to distance the social media aspect of the business from other projects it is pursuing. Mark Zuckerberg, the founder of the firm, is presently holding discussions over the rebranding which could happen as early as this month.
Evercore ISI analyst Mark Mahaney has an Outperform rating on Facebook, Inc. (NASDAQ:FB) stock with a price target of $450. The analyst believes that there is some reason to be cautious over the stock amid tough competition in the months ahead.
At the end of the second quarter of 2021, 266 hedge funds in the database of Insider Monkey held stakes worth $42 billion in Facebook, Inc. (NASDAQ:FB), up from 257 in the preceding quarter worth $40 billion.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Facebook, Inc. (NASDAQ:FB) was one of them. Here is what the fund said:
“We continued to keep our learnings from 2020 in mind during the quarter as we sought to increase the up capture of the portfolio. We also made adjustments to the portfolio’s top 10 holdings to increase the participation of select stocks, including Facebook, while trimming our weighting to stable names, which now represent 47% of the portfolio. Our repositioning has been encouraging so far with the portfolio performing better on up days in the market while maintaining good down capture during more turbulent sessions.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 271
Credit Suisse analyst Stephen Ju recently maintained an Outperform rating on Amazon.com, Inc. (NASDAQ:AMZN) stock but lowered the price target to $4,200 from $4,700 ahead of the third quarter results of the firm. The analyst believes wage pressures and new hiring would weigh on the firm in the near term.
Amazon.com, Inc. (NASDAQ:AMZN) had earlier announced that it would be hiring 150,000 additional staff over the holiday season to keep up with demand.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Amazon.com, Inc. (NASDAQ:AMZN) with 3.8 million shares worth more than $13 billion.
In its Q1 2021 investor letter, Hayden Capital, an asset management firm, highlighted a few stocks and Amazon.com, Inc. (NASDAQ:AMZN) was one of them. Here is what the fund said:
“Amazon (AMZN):We sold our last remaining stake in Amazon this quarter. Amazon was our longest-running investment holding, after having originally purchasing it at the inception of Hayden in 2014, at a price of ~$317.
I gave some details of how Amazon has progressed over these past 6.5 years in last year’s Q2 2020 letter, which partners can find here (LINK). The company has executed amazingly well over this tenure, with revenues up ~3.3x and since our initial purchase, and reported operating income up ~30x over that period.
Generally, I believe there are three reasons to sell an investment:1) we recognize our initial thesis is wrong (sell out as quick as possible), 2) we have a significantly higher returning opportunity to redeploy the capital into (sell-down to fund the new investment), or 3) the company is maturing and hitting the top part of it’s S-curve / business lifecycle, so the business has fewer places to reinvest its capital internally. As such, the future returns will likely be lower than the past. This investment thus becomes a “source of capital” in the future, as we fund earlier-stage investment opportunities.
In the case of Amazon, we decided to sell due to the third scenario. I’m sure Amazon will continue to generate value for shareholders and continue to keep pace with the broader technology sector. However, I’m just not confident it’s as attractive an investment as when we first invested.
With ~51% of US households having an Amazon Prime account (and with very low churn), each of these households continuing to increase their annual spend with Amazon, and few / no real competitors in sight, Amazon is a dominant force that will only continue to accrue value as consumers continue to move from offline to online purchases for their everyday needs. Likewise, the “cash-flow machine” of Amazon Web Services is in a similar position of strength, with AWS now having ~32% market share and continuing to grow at +30% y/y. Because of this, I think Amazon is probably one of the safest investments in the technology sector today.
So why did we decide to sell the investment then? Simply put, Amazon is …”read the entire letter here]
You can also take a peek at 12 Best Big Tech Stocks to Buy Right Now and 10 Stocks That Just Received Sell Rating from Analysts.
