In this article, we discuss the 3 stocks that Warren Buffett is buying on the dip. If you want to see more stocks in this selection, click Warren Buffett is Buying the Dip on These 5 Stocks.
3. Paramount Global (NASDAQ:PARA)
Number of Hedge Fund Holders: 42
YTD Percentage Decline in Share Price as of August 18: 20.04%
Paramount Global (NASDAQ:PARA) was incorporated in 1986 and is headquartered in New York, operating as a subsidiary of National Amusements, Inc. Paramount Global (NASDAQ:PARA) is a media and entertainment company, broadcasting news and public affairs, sports, and entertainment programs. Warren Buffett purchased almost 69 million Paramount Global (NASDAQ:PARA) shares in Q1 2022, worth $2.60 billion. In Q2, Buffett increased his stake by 14% to 78.4 million shares. The stock has plummeted about 20% year to date as of August 18.
On August 5, Morgan Stanley analyst Benjamin Swinburne lowered the price target on Paramount Global (NASDAQ:PARA) to $20 from $22 after the company’s “broadly in-line” Q2 results, with Paramount Plus net ads coming in ahead of estimates but being offset by weaker ad revenues. However, the macro ad slowdown and higher investment in streaming pushed the analyst to slash his second half outlook and maintain an Underweight rating on Paramount Global (NASDAQ:PARA) shares.
According to the June quarter hedge fund data compiled by Insider Monkey, Paramount Global (NASDAQ:PARA) was part of 42 public stock portfolios, up from 40 funds in the prior quarter. John W. Rogers’ Ariel Investments is a notable stakeholder of the company, with 6.13 million shares worth $151.4 million.
2. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 128
YTD Percentage Decline in Share Price as of August 18: 4.16%
Apple Inc. (NASDAQ:AAPL) became a part of the Berkshire portfolio in Q1 2016. In Q2 2022, Buffett’s hedge fund owned 894.80 million shares worth $122.3 billion, representing 40.76% of the total 13F securities. Although the stock has declined over 4% year to date as of August 18, Buffett acquired about 5 million new shares in Apple Inc. (NASDAQ:AAPL) during Q2.
Wedbush analyst Daniel Ives on August 17 raised the price target on Apple Inc. (NASDAQ:AAPL) to $220 from $200 and kept an Outperform rating on the shares. He has closely been monitoring Apple Inc. (NASDAQ:AAPL)’s Asia supply chain over the last few weeks as the company is in the final stages for its iPhone 14 release in mid-September. The analyst thinks the initial order for 90 million iPhone 14 units will remain intact despite the macro headwinds. This indicates the underlying demand for Apple Inc. (NASDAQ:AAPL) products, which is a positive catalyst for ASPs heading into fiscal 2023.
According to Insider Monkey’s Q2 data, 128 hedge funds were long Apple Inc. (NASDAQ:AAPL), compared to 131 funds in the preceding quarter. Ken Fisher’s Fisher Asset Management held a sizeable position in the company, consisting of 65.6 million shares worth about $9 billion.
Here is what Wedgewood Partners has to say about Apple Inc. (NASDAQ:AAPL) in its Q2 2022 investor letter:
“Apple grew revenues +9%, driven by +17% growth in the Services segment. While iPhone revenues grew a modest +5%, it was on an exceptional year ago comparison of +66%. iPhone continues to capture most industry smartphone profits by focusing on high-end price tiers. Apple is taking nearly two-thirds of the revenue share in the premium ($400 and above) smartphone segment. Further, most of the growth was driven by expansion in the “ultra-premium” price tier of $1000 or more per unit.[1] As we have highlighted in the past, Apple’s relentless focus on the development and integration between hardware (especially integrated circuits) and 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.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 252
YTD Percentage Decline in Share Price as of August 18: 16.34%
Amazon.com, Inc. (NASDAQ:AMZN) stock has dropped more than 16% year to date as of August 18, and it is one of the most prominent stocks that Warren Buffett bought on the dip in the June quarter. Berkshire Hathaway strengthened its Amazon.com, Inc. (NASDAQ:AMZN) stake by 1900% in Q2 2022. The hedge fund owned 10.6 million shares worth $1.13 billion, which accounts for 0.37% of the total portfolio.
Amazon.com, Inc. (NASDAQ:AMZN) reported its Q2 results on July 28, posting a loss per share of $0.20, missing consensus estimates by $0.32. The revenue of $121.23 billion gained 7.21% on a year over year basis, outperforming Wall Street forecasts by $2.09 billion.
In light of headlines that Amazon.com, Inc. (NASDAQ:AMZN) will charge an incremental 35 cent per item fee on Fulfilled By Amazon items sold in the United States and Canada beginning in mid-October, Morgan Stanley analyst Brian Nowak said that this fee is a result of Amazon.com, Inc. (NASDAQ:AMZN) increasing FBA fees by about 5% earlier in the year. He estimated the 35c fee will boost EBIT notably and called the move a “positive signal” about Amazon.com, Inc. (NASDAQ:AMZN)’s “confidence in the health of its U.S. seller offering and its consumer”. He maintained an Overweight rating and a $175 price target on Amazon.com, Inc. (NASDAQ:AMZN) shares on August 17.
According to Insider Monkey’s Q2 data, 252 hedge funds were bullish on Amazon.com, Inc. (NASDAQ:AMZN), compared to 271 funds in the last quarter. Skye Global Management is a prominent position holder in the company, with 15.4 million shares worth $1.6 billion.
Here is what Alphyn Capital has to say about Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2022 investor letter:
“It is interesting to see how sentiment on Amazon went from positive to negative in one quarter, as it transpired that it too was not as immune to post-covid slowdowns as some, myself included, had expected. However, I feel confident that Amazon, as the apex predator in the e-commerce space, will navigate market softness better than most other retailers. Moreover, once it finishes with its current capex cycle, it will continue to improve margins. Andy Jassy is reportedly spending one-third of his time focused on capacity and supply issues in the retail division.”
You can also take a look at 10 Stocks to Watch as Cathie Wood’s Fund Starts to Rebound and Top 10 Stock Picks of Citadel’s Wellington Fund.
