In this article, we discuss the top 5 stocks to buy in 2022 according to Motley Fool’s 1623 Capital. If you want to see more top stocks in the hedge fund’s portfolio, check out Top 10 Stocks to Buy in 2022 According to Motley Fool’s 1623 Capital.
5. Apple Inc. (NASDAQ:AAPL)
1623 Capital’s Stake Value: $10,657,000
Percentage of 1623 Capital’s 13F portfolio: 5.34%
Number of Hedge Fund Holders: 131
Motley Fool’s 1623 Capital owns 61,032 shares of Apple Inc. (NASDAQ:AAPL), worth $10.65 million, representing 5.34% of the total 13F portfolio. On July 5, Morgan Stanley analyst Katy Huberty revealed that Apple Inc. (NASDAQ:AAPL)’s App Store net revenue growth slowed to 2.5% year-over-year in June, down from 4% growth in May. App Store net revenue increased 5% year-over-year to $6.5 billion for the second quarter, which is about $67 million under her present prediction of 6% year-over-year growth in the quarter. The analyst reiterated an Overweight rating and a $185 price target on Apple Inc. (NASDAQ:AAPL) shares.
According to Insider Monkey’s first quarter database, 131 hedge funds were bullish on Apple Inc. (NASDAQ:AAPL) at the end of Q1 2022, compared to 134 funds in the prior quarter. Warren Buffett’s Berkshire Hathaway is the largest shareholder of the company, with approximately 891 million shares worth $155.5 billion.
Here is what Weitz Investment Management Partners III Opportunity Fund has to say about Apple Inc. (NASDAQ:AAPL) in its Q1 2022 investor letter:
“Changes to Apple’s (NASDAQ:AAPL) mobile operating system have temporarily impacted growth of Meta’s advertising business just as the company’s investments in Instagram’s “Reels” feature ramp ahead of full monetization. (Shareholders can read research analyst Jon Baker’s in-depth discussion of current events impacting Meta and reasons why we’re optimistic about the company in our recent Analyst Corner feature.) CoreCard (formerly Intelligent Systems) struggled early in the fiscal year to hire and train staff to handle growth from new and existing clients. Lately, Apple-related headlines also took a bite out of CoreCard shares, as reports suggest Apple is exploring a transition of its credit card and other financial services to internally built solutions. Such a move would create revenue headwinds for its partners, which CoreCard is widely believed to be. We are monitoring these developments and stress-testing our model accordingly.”
4. Amazon.com, Inc. (NASDAQ:AMZN)
1623 Capital’s Stake Value: $11,084,000
Percentage of 1623 Capital’s 13F portfolio: 5.55%
Number of Hedge Fund Holders: 271
Amazon.com, Inc. (NASDAQ:AMZN) is one of the top stocks to buy in 2022 according to Motley Fool’s 1623 Capital. The hedge fund owns 3,400 shares of the company as of Q1, worth over $11 million, representing 5.55% of the total 13F portfolio. Redburn analyst Alex Haissl on June 29 initiated coverage of Amazon.com, Inc. (NASDAQ:AMZN) with a Buy rating and a $270 price target, citing his view that Amazon Web Services is worth $3 trillion, or “almost 3x Amazon’s current market cap”.
According to Insider Monkey’s data, 271 hedge funds were bullish on Amazon.com, Inc. (NASDAQ:AMZN) at the end of March 2022, compared to 279 funds in the earlier quarter. Ken Fisher’s Fisher Asset Management is the largest shareholder of the company, with 2.3 million shares worth $7.70 billion.
Here is what Weitz Investment Management Partners III Opportunity Fund has to say about Amazon.com, Inc. (NASDAQ:AMZN) in its Q1 2022 investor letter:
“Amazon.com’s (NASDAQ:AMZN) stock was down modestly in the quarter, but opportunistic purchases helped the position contribute positively to the Fund. Our index short positions against ETFs tracking market indexes provided helpful ballast during the first quarter drawdown but were otherwise detractors for the fiscal year. During the quarter, we covered roughly 20% of our S&P 500 short and 50% of our Nasdaq 100 short at progressively lower prices. Among our long equities, we added materially to high-conviction holdings Amazon.com.”
3. FedEx Corporation (NYSE:FDX)
1623 Capital’s Stake Value: $11,570,000
Percentage of 1623 Capital’s 13F portfolio: 5.79%
Number of Hedge Fund Holders: 52
FedEx Corporation (NYSE:FDX) is an American multinational conglomerate that specializes in transportation, e-commerce, and related services. Motley Fool’s 1623 Capital boosted its FedEx Corporation (NYSE:FDX) by 39% in Q1 2022. The hedge fund owned 50,000 shares of the company, worth $11.5 million, representing 5.79% of the total portfolio.
On July 1, Berenberg analyst William Howard downgraded FedEx Corporation (NYSE:FDX) to Hold from Buy and lowered the price target to $275 from $333. The stock has had “something of a reprieve in the past few weeks, after the company changed its CEO and the apparent influence of an activist investor prompted some strategy changes”, the analyst told investors. However, with short-term earnings risks increasing, the shares may “pause for breath until the macroeconomic outlook becomes clearer”, said the analyst.
According to the first quarter database of Insider Monkey, 52 hedge funds were long FedEx Corporation (NYSE:FDX), compared to 64 funds in the prior quarter. Mason Hawkins’ Southeastern Asset Management is a significant shareholder of the company, with 1.38 million shares worth $321.2 million.
Here is what Artisan Value Fund has to say about FedEx Corporation (NYSE:FDX) in its Q3 2021 investor letter:
“Our weakest Q3 performers included FedEx. Shares of FedEx Corporation (NYSE:FDX), a global shipping and logistics firm, were held back by disappointing business results as labor cost headwinds and air network disruptions overshadowed solid top-line trends. We think the company should be able to overcome these near-term issues. Importantly, FedEx Corporation (NYSE:FDX) has strong pricing power as it operates in a consolidated global shipping industry. In September, the company announced it would increase its shipping rates by an average of 5.9% across most of its services, which is the first time in several years that its annual increase would exceed 5.0%. The industry’s renewed pricing discipline is a welcome change, reflecting a broader commitment to earn better returns on invested capital. FedEx Corporation (NYSE:FDX) is also closer to fully integrating TNT, a European-focused parcel company it acquired in 2016. The market is beginning to incorporate a higher probability FedEx will fully integrate TNT, which will provide a significant boost to profits. The stock now trades at a near-trough multiple of less than 12X 2022 earnings, so we added to our position on weakness.”
2. Visa Inc. (NYSE:V)
1623 Capital’s Stake Value: $11,709,000
Percentage of 1623 Capital’s 13F portfolio: 5.86%
Number of Hedge Fund Holders: 159
Visa Inc. (NYSE:V) is an American multinational financial services corporation that offers credit cards and payment systems. Securities filings for Q1 2022 reveal that Motley Fool’s 1623 Capital owned 52,800 shares of Visa Inc. (NYSE:V), worth $11.70 million, representing 5.86% of the total 13F portfolio. In Q1 2022, the hedge fund strengthened its hold on the company by 65%.
Piper Sandler analyst Christopher Donat on July 6 reiterated an Overweight rating on Visa Inc. (NYSE:V) but lowered the price target on the shares to $204 from $239. The analyst stated that his largest concern for the Q2 earnings season in the payments space is guidance for the second half of 2022. He believes that inflation and economic concerns “could disrupt discretionary spending, such as cross-border travel”.
According to Insider Monkey’s Q1 data, 159 hedge funds were bullish on Visa Inc. (NYSE:V), up from 142 funds in the prior quarter. Chris Hohn’s TCI Fund Management is the largest shareholder of the company, with approximately 20 million shares worth $4.4 billion.
Here is what Polen Global Growth Fund has to say about Visa Inc. (NYSE:V) in its Q1 2022 investor letter:
“We added to both Visa and Mastercard during the final quarters of 2021, based on the belief that both businesses were trading at attractive prices and poised to deliver double-digit returns over the next three to five years. Cross-border transactions–a highly profitable business segment for both companies–represent roughly 10% of Visa and Mastercard’s volumes and 25% of their gross revenues, so lockdowns have severely impacted this segment due to stifled travel. While it was impossible to know when people would begin traveling again, we accepted this reality with the belief that travel would eventually return. Both companies have commented that as soon as a country or geography reopens, cross-border volumes reignite, amplifying each business’s growth and profitability. We think these near- term headwinds have created an attractive long-term investment opportunity.”
1. Dollar General Corporation (NYSE:DG)
1623 Capital’s Stake Value: $12,624,000
Percentage of 1623 Capital’s 13F portfolio: 6.32%
Number of Hedge Fund Holders: 53
Dollar General Corporation (NYSE:DG) is the largest holding of Motley Fool’s 1623 Capital, with the hedge fund owning 56,702 shares of the company, worth $12.6 million, representing 6.32% of the total 13F portfolio. Dollar General Corporation (NYSE:DG) is an American discount retailer. The company declared on May 31 a $0.55 per share quarterly dividend, in line with previous. The dividend is payable on July 19, to shareholders of record on July 5.
Morgan Stanley analyst Simeon Gutman on June 16 upgraded Dollar General Corporation (NYSE:DG) to Overweight from Equal Weight, raising the price target to $250 from $225. The analyst observed that Dollar General Corporation (NYSE:DG) fits his theme of “favoring quality, defensive retailers with offensive characteristics”. He sees a favorable risk/reward skew, with 50% upside and 25% downside in his $340 bull case and $175 bear case, respectively.
According to Insider Monkey’s Q1 data, 53 hedge funds held bullish positions in Dollar General Corporation (NYSE:DG), up from 44 funds in the last quarter. William B. Gray’s Orbis Investment Management is the largest shareholder of the company, with 2.3 million shares worth $519.2 million.
Here is what LRT Capital Management has to say about Dollar General Corporation (NYSE:DG) in its Q3 2021 investor letter:
“Executive Summary
At LRT Capital Management we are continuously searching the market for great investment opportunities. Our favorite finds are companies with moats and growth opportunities that justify a higher price than what the stock is trading for. One of our holdings (approximately 1.5% of our long exposure) is Dollar General (DG), so today, we wanted to tell you a bit about this great company.
Company Overview
Dollar General is a discount retailer with the largest brick-and-mortar presence in the United States by store count. The company’s largest concentration of stores can be found in the southern, southwestern, midwestern, and eastern parts of the United States.10 Dollar General was founded in 1939 by J.L. Turner, who originally named the company “J.L. Turner and Son, Wholesale”. As the name suggests, the company began its life as a wholesaler, but quickly turned to a retailer of general store goods. By the early 1950s, the company had annual sales of $2 million per year,12 which is the equivalent of $22.95 million in 2021 dollars when adjusted for inflation.
The first Dollar General store opened on June 1st, 1955 in Springfield Kentucky. The simple concept was that no item in the store would cost more than one dollar. The company changed its name to Dollar General Corporation in 1968 when Dollar General became publicly traded. At the time of its initial public offering, the business generated more than $40 million in annual sales. The company’s common stock was publicly traded from 1968 until July 2007, when it was taken private by KKR. The company went public again in November 2009, under the ticker DG.
Today, Dollar General is an evolved, and phenomenal business with more room for growth. Annual sales reached a record $33.7 billion in fiscal year 2021 after consecutively growing the top line for many years. The company’s main products are every-day necessities and consumables purchased by lower income consumers on tight budgets…”
You can also take a look at 10 Defensive Stocks in Billionaire Ray Dalio’s Latest Portfolio and Michael Burry is Buying These 10 Stocks As Recession Fears Mount.
