In this article, we discuss 10 best Guru stocks to buy now.
Guru ETF allows investors access to the best investments of some of the largest, most well-known hedge funds in the finance world. By replicating the strategies of top hedge funds, Guru aims to take advantage of their elite research and resources to exceed US equity benchmarks. Guru has an expense ratio of 0.75%, enabling higher cost efficiency while providing access to best hedge fund ideas.
Guru ETF was established in April 2012 and it has $45.58 million in net assets as of October 18, 2022. The portfolio has 77 holdings and a 30-day SEC yield of 0.60%. The fund distributes dividends semi-annually. Guru ETF seeks to provide investment results that track the price and yield performance, before fees and expenses, of the Solactive Guru Index. As of September 30, Guru’s 10-year annualized returns were 7.58%, compared to the benchmark return of 7.92% over the same period.
Guru invests primarily in the information technology, healthcare, consumer discretionary, industrials, communication services, and financial sectors. The best Guru stocks to buy now include Texas Pacific Land Corporation (NYSE:TPL), The Allstate Corporation (NYSE:ALL), and Bausch Health Companies Inc. (NYSE:BHC).
Our Methodology
We selected the top 10 stocks from Guru ETF’s portfolio as of October 18. The stocks are ranked according to the 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.
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Best Guru Stocks To Buy Now
10. Humana Inc. (NYSE:HUM)
Number of Hedge Fund Holders: 69
Percentage of Guru Index ETF’s Net Assets as of October 18: 1.55%
Humana Inc. (NYSE:HUM) was founded in 1961 and is headquartered in Louisville, Kentucky. It is a health and well-being company in the United States, operating through three segments – Retail, Group and Specialty, and Healthcare Services. As of October 18, Guru ETF features 1,406 shares of Humana Inc. (NYSE:HUM) and the stock represents 1.55% of the total net assets.
On September 20, RBC Capital analyst Frank Morgan raised the price target on Humana Inc. (NYSE:HUM) to $544 from $541 and maintained an Outperform rating on the shares. The analyst renewed his model after the company’s updated outlook on its Investor Day, noting that its “strong” long-term earnings targets are supported by growth in key Medicare Advantage and value-based care initiatives. Humana Inc. (NYSE:HUM)’s core Medicare Advantage franchise should see moderate growth in 2023 before exceeding market growth in 2024, the analyst told investors in a research note.
According to Insider Monkey’s data, 69 hedge funds held stakes worth $3.72 billion in Humana Inc. (NYSE:HUM) at the end of June 2022, compared to 66 funds in the prior quarter worth $3.11 billion. Ken Griffin’s Citadel Investment Group is the leading stakeholder of the company, with 1.10 million shares valued at $519 million.
Like Texas Pacific Land Corporation (NYSE:TPL), The Allstate Corporation (NYSE:ALL), and Bausch Health Companies Inc. (NYSE:BHC), Humana Inc. (NYSE:HUM) is one of the best Guru stocks to invest in.
Here is what Baron Funds specifically said about Humana Inc. (NYSE:HUM) in its Q3 2022 investor letter:
“We added to our position in Humana Inc. (NYSE:HUM), a managed health care company which we believe is benefiting from favorable secular trends, including the aging of the population, increasing adoption of Medicare Advantage over traditional Medicare, and the shift to value-based health care. Humana has two businesses, a health plan business and a health care services business. The health plan business is focused on the Medicare Advantage (MA) program, a government program under which the Center for Medicare & Medicaid Services (CMS) contracts with private sector health insurance companies to provide health insurance benefits in exchange for contractual payments from CMS. Overall Medicare enrollment is growing as the baby boomer generation ages into the Medicare program and MA is growing faster than traditional Medicare because MA companies provide additional benefits like dental, vision, and hearing coverage at no extra cost. These trends should continue to drive growth in MA enrollment for many years. Humana is a strong number two player in MA after UnitedHealth and has typically grown its MA business faster than the market.
In Humana’s health care services business, which is branded CenterWell, the company provides pharmacy services, home care services, and operates primary care clinics. Humana is one of the largest senior-focused, value-based primary care organizations and is also the largest home health organization in the country. Humana’s health care services business is higher margin and faster growing than the health plan business and should help drive margin expansion and earnings growth for the consolidated business. At a recent Investor Day, management provided a 2025 adjusted EPS growth target of $37, representing a 14% CAGR from 2022.”
9. Chesapeake Energy Corporation (NASDAQ:CHK)
Number of Hedge Fund Holders: 67
Percentage of Guru Index ETF’s Net Assets as of October 18: 1.55%
Chesapeake Energy Corporation (NASDAQ:CHK) is an Oklahoma-based independent exploration and production company, engaged in the acquisition, exploration, and development of properties for the production and exploration of oil, natural gas, and natural gas liquids in the United States. Chesapeake Energy Corporation (NASDAQ:CHK) stock represents 1.55% of the total net assets of the Guru ETF, which makes it one of the best Guru stocks to buy now.
On October 19, Jefferies analyst Lloyd Byrne initiated coverage of Chesapeake Energy Corporation (NASDAQ:CHK) with a Buy rating and a $150 price target. He believes the “Option Value” of energy is up again, supported by a restricted capital cycle. While this is most prominent in oil & gas, it is also apparent in energy transition names, as per the analyst. He believes energy’s “Option Value can stay higher for longer” without a meaningful uptick in investment across the industry, though he added that the present macro downturn is “likely to incrementally gain focus” within the group.
According to Insider Monkey’s second quarter database, 67 hedge funds were bullish on Chesapeake Energy Corporation (NASDAQ:CHK), compared to 59 funds in the prior quarter. Howard Marks’ Oaktree Capital Management is the largest stakeholder of the company, with 10.50 million shares worth $851.6 million.
Here is what ClearBridge Investments Dividend Strategy has to say about Chesapeake Energy Corporation (NYSE:CHK) in its Q1 2022 investor letter:
“In the early days of the invasion, we made two measured changes to the portfolio based on longer-term fallout we anticipated from Russia’s invasion of Ukraine. First, we initiated small positions in U.S. natural gas producers Chesapeake (NYSE:CHK).
Given its superior environmental profile compared to other fossil fuels, we have long favored natural gas in our energy holdings. Combustion of natural gas releases 50% less CO2 than coal, 25% less CO2 than gasoline and dramatically less particulate and pollution, per the U.S. Energy Information Administration. With the advances in shale production this century, the U.S. has become a natural gas powerhouse with some of the lowest-cost and largest reserves in the world. But because natural gas is difficult to ship across the ocean (it must be liquefied, which requires expensive infrastructure on both ends of the voyage), America’s gas bounty has ironically proved a burden for U.S. producers.
The surplus of natural gas in North America has resulted in low prices and weak earnings for gas-focused producers. Exports, while growing, are restrained by the high cost of building export infrastructure. Europe, in a Faustian bargain, has relied on abundant, inexpensive Russian gas transported by pipeline.
Despite the abundance of low-cost resources and a superior environmental profile, the investment case for U.S. natural gas producers was previously unfavorable due to oversupply in the domestic market.
In the days preceding the invasion, we were quick to realize the war would change global energy flows. Europe is shifting away from Russia and toward new sources of imported liquified natural gas. We purchased our stakes in Chesapeake to capitalize on these trends. The recently announced energy pact between the U.S. and Europe represents an early positive datapoint in support of this investment thesis.”
8. Snowflake Inc. (NYSE:SNOW)
Number of Hedge Fund Holders: 65
Percentage of Guru Index ETF’s Net Assets as of October 18: 1.56%
Snowflake Inc. (NYSE:SNOW) was incorporated in 2012 and is based in Bozeman, Montana. The company provides a cloud-based data platform in the United States and internationally. Guru ETF owns 4,114 shares of Snowflake Inc. (NYSE:SNOW) as of October 18, with market value exceeding $712 million. Snowflake Inc. (NYSE:SNOW) is one of the best Guru stocks to invest in.
Canaccord analyst Kingsley Crane on October 10 assumed coverage of Snowflake Inc. (NYSE:SNOW) with a Buy rating and raised the price target to $220 from $200. The company has demonstrated “a remarkable ability to grow at scale,” doubling total revenue consecutively in the last three fiscal years, noted the analyst. He added that he cannot overstate the extent to which Snowflake Inc. (NYSE:SNOW)’s “simple and flexible” consumption-based pricing model has aided swift growth. He sees its FY29 financial targets as “surprisingly reasonable” and argues that they represent upside to shares from present levels.
According to Insider Monkey’s Q2 data, 65 hedge funds were long Snowflake Inc. (NYSE:SNOW), compared to 81 funds in the earlier quarter. Brad Gerstner’s Altimeter Capital Management is the biggest position holder in the company, with 17 million shares worth $2.36 billion.
Here is what Baron Fifth Avenue Growth Fund has to say about Snowflake Inc. (NYSE:SNOW) in its Q2 2022 investor letter:
“During the quarter, we added to three of our cloud infrastructure positions – Snowflake Inc., Cloudflare, Inc., and Datadog, Inc.While investors are concerned that a weakening macroeconomic environment will be a near term headwind to growth as customers may slow down their cloud expansions, we remain focused on the long term – duration of growth, competitive advantages, and innovative capabilities and are happy to increase our positions at a more attractive price. For example, Snowflake, the leading data cloud provider, during its recent user conference, announced several new products, which significantly expand its addressable market…” (Click here to see the full text)
7. Arch Capital Group Ltd. (NASDAQ:ACGL)
Number of Hedge Fund Holders: 23
Percentage of Guru Index ETF’s Net Assets as of October 18: 1.56%
Arch Capital Group Ltd. (NASDAQ:ACGL) provides insurance, reinsurance, and mortgage insurance products worldwide. The company was incorporated in 1995 and is based in Bermuda. Guru owns 14,653 shares of Arch Capital Group Ltd. (NASDAQ:ACGL), worth $712.7 million.
On October 14, investment advisory Barclays raised the price target on Arch Capital Group Ltd. (NASDAQ:ACGL) to $55 from $53 and maintained an Overweight rating on the shares ahead of the Q3 results. Analyst Tracy Benguigui issued the ratings update.
According to Insider Monkey’s Q2 data, 23 hedge funds held stakes worth $1 billion in Arch Capital Group Ltd. (NASDAQ:ACGL), compared to 38 funds in the prior quarter worth $1.3 billion. Bob Peck and Andy Raab’s FPR Partners is the leading position holder in the company, with 10.5 million shares valued at $476.5 million.
Here is what Baron Funds specifically said about Arch Capital Group Ltd. (NASDAQ:ACGL) in its Q2 2022 investor letter:
“Arch Capital Group Ltd. (NASDAQ:ACGL)’s share price declined 6.1% in the quarter and hurt performance by 30 bps. This was as the company continued to increase premiums written while raising prices. This strong pricing is resulting in robust returns on investments with increased earnings and cash flow that the company is using to repurchase its shares. We continue to believe that Arch will continue to generate mid-teens returns on capital. Arch’s valuation remains attractive.”
6. First Horizon Corporation (NYSE:FHN)
Number of Hedge Fund Holders: 43
Percentage of Guru Index ETF’s Net Assets as of October 18: 1.57%
First Horizon Corporation (NYSE:FHN) is a Tennessee-based bank holding company for First Horizon Bank. The company operates through three segments – Regional Banking, Specialty Banking, and Corporate. Guru owns 29,811 shares of First Horizon Corporation (NYSE:FHN) as of October 18, worth more than $715 million and representing 1.57% of the total assets.
On October 18, First Horizon Corporation (NYSE:FHN) reported its financial results for the third quarter of 2022. The company announced a Q3 non-GAAP EPS of $0.44, beating market estimates by $0.01. The revenue of $875 million increased 18.6% year-over-year, topping market consensus by $55.17 million. The bank saw resilient growth in loans and net interest income during the third quarter. First Horizon Corporation (NYSE:FHN)’s merger with IberiaBank remains on track to deliver approximately $200 million in annualized net cost savings by Q4, with $184 million in savings already realized.
According to Insider Monkey’s Q2 data, 43 hedge funds were bullish on First Horizon Corporation (NYSE:FHN), compared to 44 funds in the earlier quarter. Simon Sadler’s Segantii Capital is the largest stakeholder of the company, with approximately 12 million shares worth $260 million.
In addition to Texas Pacific Land Corporation (NYSE:TPL), The Allstate Corporation (NYSE:ALL), and Bausch Health Companies Inc. (NYSE:BHC), First Horizon Corporation (NYSE:FHN) features as one of the best stocks in the Guru portfolio.
Here is what Ave Maria specifically said about First Horizon Corporation (NYSE:FHN) in its Q2 2022 investor letter:
“First Horizon Corporation (NYSE:FHN) is a leading regional bank that merged with IBERIABANK Corporation in 2020 forming a regional financial services company with 412 branches across 12 southern states. On February 28, 2022, The Toronto-Dominion Bank (TD Bank) reached an agreement with First Horizon Corporation to acquire the bank for $25 per share.”
5. The Allstate Corporation (NYSE:ALL)
Number of Hedge Fund Holders: 37
Percentage of Guru Index ETF’s Net Assets as of October 18: 1.60%
The Allstate Corporation (NYSE:ALL) is an Illinois-based company that provides property, casualty, and other insurance products in the United States and Canada. The company operates through Allstate Protection, Protection Services, Allstate Health and Benefits, and Run-off Property-Liability segments. As of October 18, Guru ETF had 5,309 shares of The Allstate Corporation (NYSE:ALL), worth over $729 million and representing 1.60% of the total net assets.
Keefe Bruyette analyst Meyer Shields on October 11 upgraded The Allstate Corporation (NYSE:ALL) to Outperform from Market Perform with a price target of $158, up from $136, ahead of the Q3 results. The commercial insurers’ core ratios should generally improve year-over-year on earned rate increases despite high loss trends, the analyst told investors.
According to Insider Monkey’s second quarter database, 37 hedge funds were long The Allstate Corporation (NYSE:ALL), compared to 44 funds in the previous quarter. Cliff Asness’ AQR Capital Management is the leading position holder in the company, with 1.72 million shares worth $215 million.
Here is what Appleseed Fund had to say about The Allstate Corporation (NYSE:ALL) in its Q2 2021 investor letter:
“Allstate is the second-largest personal insurance company in the United States with a 9.3% share in auto insurance (4th largest) and an 8.0% share in homeowner’s insurance (2nd largest). The company sells products primarily through its captive agents though this business line is shrinking as the company’s direct (Esurance.com and, more recently, Allstate.com) and independent agent businesses grow more quickly. The personal insurance industry is relatively consolidated, and competition has historically been rational, allowing Allstate to earn attractive mid-teen returns on equity in this business over the past decade. Allstate also recently announced plans to divest their low-growth, low-return life and annuity businesses. This will free up capital to reinvest into the more attractive personal insurance segment and result in improvements on consolidated returns on equity of approximately 2.5%.
Despite the attractive industry dynamics of the personal insurance business and the steps that Allstate has taken to dispose of lower return businesses, the company’s stock currently trades as if Allstate will never be able to grow its earnings. At our purchase price, Allstate’s stock was trading for less than 10.0x forward earnings estimates. While Allstate does face tough competition in the auto insurance business from GEICO and Progressive, their market position, strong brand, and increased investment into the direct insurance business should allow them to grow earnings. Overall, we believe this entry price is attractive for an industry leader in a high-return, consolidating industry. Further, downside risk management should be positively impacted by the dividend yield, a strong balance sheet, and a management team that has historically increased share repurchases when they view the stock to be trading below its intrinsic value.”
4. Bausch Health Companies Inc. (NYSE:BHC)
Number of Hedge Fund Holders: 39
Percentage of Guru Index ETF’s Net Assets as of October 18: 1.61%
Bausch Health Companies Inc. (NYSE:BHC) is a Canadian company that develops, manufactures, and markets pharmaceutical drugs, medical devices, and over-the-counter products in the therapeutic areas of eye health, gastroenterology, and dermatology. Bausch Health Companies Inc. (NYSE:BHC) is one of the best Guru stocks to buy now, with the ETF holding 108,245 shares worth $735 million, representing 1.61% of the total portfolio.
On September 9, Piper Sandler analyst David Amsellem lowered the price target on Bausch Health Companies Inc. (NYSE:BHC) to $6 from $7 and kept a Neutral rating on the shares. The analyst said that Alvogen/Norwich received tentative approval from the FDA for its generic of the 200 mg strength of Bausch Health Companies Inc. (NYSE:BHC)’s Xifaxan. Though prescription volumes for the 200 mg strength only represent 2% of overall Xifaxan volumes, the presence of a generic of this strength “could prove to be disruptive to the brand,” the analyst told investors in a research note.
According to Insider Monkey’s second quarter database, 39 hedge funds were long Bausch Health Companies Inc. (NYSE:BHC), compared to 48 funds in the prior quarter. Carl Icahn’s Icahn Capital LP is the biggest position holder in the company, with 34.7 million shares worth $290 million.
Here is what Miller Value Partners Opportunity Trust Fund has to say about Bausch Health Companies Inc. (NYSE:BHC) in its Q2 2022 investor letter:
“Bausch Health Companies Inc. (NYSE:BHC) declined during the quarter as the company consummated its Bausch+Lomb IPO at valuations far below expectations, reported disappointing Q1 2022 results, and delayed its plan to spin out its Solta (aesthetics) business due to difficult market conditions. While the company spun off 10% of Bausch+Lomb (BCLO) they retained 90% of the company which they intend to distribute once they have met their target leverage ratio of 6.5-6.7x. The future spin-off value of the Bausch+Lomb piece represents a value of $12.55 per share, 39% above where Bausch Health is currently trading. The company recently appointed John Paulsen as Chair of the Board, which should accelerate value realization.”
3. Ascendis Pharma A/S (NASDAQ:ASND)
Number of Hedge Fund Holders: 26
Percentage of Guru Index ETF’s Net Assets as of October 18: 1.72%
Ascendis Pharma A/S (NASDAQ:ASND) is a Denmark-based biopharmaceutical company, focused on developing therapeutics for unmet medical needs. Guru owns 6,966 shares of Ascendis Pharma A/S (NASDAQ:ASND) as of October 18, worth $781.5 million and representing 1.72% of the total portfolio. Ascendis Pharma A/S (NASDAQ:ASND) is one of the premier Guru stocks to buy now.
On October 10, Citi analyst David Lebowitz opened a “90-day upside Catalyst Watch” on Ascendis Pharma A/S (NASDAQ:ASND), relating to upcoming top line data for TransCon CNP for the treatment of achondroplasia from the Phase II ACcomplisH trial. The analyst believes positive data would be a “significant catalyst for shares, leading to double digit upside.”
According to Insider Monkey’s data, 26 hedge funds were bullish on Ascendis Pharma A/S (NASDAQ:ASND) at the end of the second quarter of 2022, compared to 28 funds in the last quarter. Peter Kolchinsky’s RA Capital Management is the leading position holder in the company, with 7.6 million shares worth $703.5 million.
Here is what Artisan Partners specifically said about Ascendis Pharma A/S (NASDAQ:ASND) in its Q2 2022 investor letter:
“Sales for Ascendis Pharma A/S (NASDAQ:ASND)’s recently approved pediatric growth hormone drug, Skytrofa, came in below expectations despite solid prescription volume. Patients are either on the free version of the drug, or they are finishing their current supply before starting treatment. Longer term, we are optimistic the company will convert free Skytrofa patients to the commercial reimbursed product. Furthermore, we anticipate TransCon PTH, used to treat hyperparathyroidism, will be approved and rolled out in 2023, providing another tailwind to the company’s profit cycle.”
2. Repare Therapeutics Inc. (NASDAQ:RPTX)
Number of Hedge Fund Holders: 11
Percentage of Guru Index ETF’s Net Assets as of October 18: 1.77%
Repare Therapeutics Inc. (NASDAQ:RPTX) is headquartered in Montreal, Canada, operating as a clinical-stage precision oncology company that develops therapeutics using its synthetic lethality approach in Canada and the United States. Guru ETF owns 59,021 shares of Repare Therapeutics Inc. (NASDAQ:RPTX), worth $804.45 million and representing 1.77% of the total portfolio.
On June 6, H.C. Wainwright analyst Robert Burns reiterated a Buy recommendation on Repare Therapeutics Inc. (NASDAQ:RPTX) but lowered the price target on the shares to $38 from $54. The licensing agreement with Roche provides external validation for RP-3500, the analyst told investors in a bullish thesis.
Among the hedge funds tracked by Insider Monkey, 11 funds reported owning stakes worth $273.2 million in Repare Therapeutics Inc. (NASDAQ:RPTX) at the end of Q2 2022, compared to 13 funds in the prior quarter worth $261 million. Mark Lampert’s Biotechnology Value Fund BVF Inc is the leading position holder in the company, with 8.3 million shares valued at $116 million.
1. Texas Pacific Land Corporation (NYSE:TPL)
Number of Hedge Fund Holders: 22
Percentage of Guru Index ETF’s Net Assets as of October 18: 1.87%
Texas Pacific Land Corporation (NYSE:TPL) engages in land and resource management and water services businesses. The company distributed a $3 per share quarterly dividend on September 15. Texas Pacific Land Corporation (NYSE:TPL) is the largest holding in Guru’s portfolio as of October 18. The ETF owns a stake worth $850.75 million in Texas Pacific Land Corporation (NYSE:TPL), representing 1.87% of the total holdings.
On September 9, Texas Pacific Land Corporation (NYSE:TPL) and WaterBridge announced a long-term agreement to provide full-cycle water solutions to support sustainable oil and gas development on over 64,000 acres in Loving and Reeves County in the core of the Delaware Basin.
According to Insider Monkey’s second quarter database, 22 hedge funds were long Texas Pacific Land Corporation (NYSE:TPL), compared to 19 funds in the preceding quarter. Murray Stahl’s Horizon Asset Management is the largest position holder in the company, with 1.50 million shares worth $2.24 billion.
Here is what Wedgewood Partners specifically said about Texas Pacific Land Corporation (NYSE:TPL) in its Q3 2022 investor letter:
“Texas Pacific Land Corporation (NYSE:TPL) was a top contributor to performance during the quarter. Revenue vaulted over +80% as oil and gas royalties more than doubled, plus water sales nearly doubled. Most of this was driven by higher realized prices on the production of oil and gas on the Company’s acreage. Production of oil and gas also grew +21%. The Company’s royalty interests span over 880,000 acres in West Texas. Most of this land is located in the highly productive Delaware Basin within the Permian Basin. We expect development activity will continue to grow at a rapid pace in this region, primarily driven by both domestic and multinational producers looking to maximize returns on increasingly scarce oil and gas capital expenditures. Further, as the tragic war in Ukraine has unfolded, energy security has become an increasingly important issue for countries around the globe. The production of hydrocarbons on Texas Pacific’s acreage represents a “port in the storm” for the U.S. and for allies too that are dependent on the energy of hostile countries. It is difficult to know how any specific policy will evolve but possessing a commanding acreage position in one of the most productive regions in the country puts the Company in an excellent strategic and competitively advantaged position.”
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Disclosure: None. 10 Best Guru Stocks To Buy Now is originally published on Insider Monkey.
