In this article, we discuss 10 Best Stocks to Buy Now According to Billionaire Bill Gates.
We all know Bill Gates, the tech billionaire and a famous philanthropist. He gained popularity after co-founding the famous tech company Microsoft Corporation (NASDAQ:MSFT). Its main product, Windows, is now used in almost every country. Microsoft soon expanded to release a suite of products for everyday use, both for Businesses and Consumers. Microsoft is the reason Bill Gates accumulated his wealth and started investing a lot of it through the Bill & Melinda Gates Foundation Trust.
The foundation was founded in 2000 and soon grew in value as it acquired high-growth companies. The foundation’s stated goals are to improve healthcare and eliminate extreme poverty across the world, as well as to extend educational opportunities and access to information technology. For this purpose, the foundation has a charitable wing which seeks to work for the betterment of human lives in third-world countries.
The investment wing of the Bill & Melinda Gates Foundation is headed by Michael Larson and has over $17.6 Billion in assets under his management, down from $19.7 Billion in the last quarter. There is very little known about Larson’s investment philosophy except for the fact that he has a conservative mandate. He is very risk averse and makes safe bets. An impressive feature of the fund managed by Larson is how infrequently it changes. Of the many 15 stocks listed in the foundation’s trust, 10 of them were also part of the portfolio ten years ago. Michael Larson has so far done a great job in managing the portfolio and has delivered an average annual return of 11%.
In June, the fund got a huge boost when Warren Buffet announced that he was going to donate $3 Billion to the trust. This was made in the form of 11 million class B shares of Berkshire Hathaway Inc. This, combined with the large number of shares already held by the foundation meant that now as of Q2 2022, over 50% of the fund’s portfolio is invested in Berkshire Hathaway Inc. (NYSE:BRK-B).
According to Gates, the best investment he has ever made was in health. Bill Gates is well known for his efforts against polio, and the Bill & Melinda Gates Foundation has helped people all over the world fight diseases.
It wouldn’t be wrong to say that Bill & Melinda Gates Foundation Trust’s investments are not entirely focused on generating financial returns but are also focused on creating a positive social impact. The fund’s investment accelerates growth and stimulates private sector innovation and investment, giving the companies additional tools to effect change and improve lives. If you are an investor whose goals align with the Bill & Melinda Gates Foundation, then you should definitely consider investing in the trust’s portfolio companies.
Although the portfolio of Bill & Melinda Gates Foundation Trust is relatively conservative, stocks can be volatile, particularly given current market conditions. If the economy slows more than expected, stocks can fall even more. Nevertheless, there are likely good opportunities for long term investors to invest in quality stocks given current valuations.
Methodology
We’ve listed the top 10 stock picks in Bill Gates’s portfolio by using data from Bill & Melinda Gates Foundation Trust’s Q2 portfolio. We’ve mentioned the fund’s stake value in the stocks, the percentage of the hedge fund’s portfolio that the stocks take up and the number of total hedge funds in our database invested in the stocks. All the data comes from the second quarter of 2022.
10 Best Stocks to Buy Now According to Billionaire Bill Gates
10. Crown Castle Inc. (NYSE:CCI)
Bill & Melinda Gates Foundation Trust’s Stake Value: $239 million
Percentage of Bill & Melinda Gates Foundation Trust’s Portfolio: 1.35%
Number of Hedge Fund Holders: 48
Number 10 on our list of 10 Best Stocks to Buy Now According to Billionaire Bill Gates is Crown Castle Inc. (NYSE:CCI), which is a real estate investment trust company. The company provides access to wireless infrastructure through long-term contracts and carries out this work with the help of towers and fibers.
Analyst Ric Prentiss lowered his price target on Crown Castle Inc. (NYSE:CCI) to $201 from $206 while maintaining an outperform rating on the shares. Prentiss continues to believe that the company will continue on its tower growth for the next several years. Although shares are down 19% year to date, Crown Castle Inc. (NYSE:CCI) stock has done well in terms of the last ten years given the growth in demand for wireless infrastructure. Renaissance Technologies owned almost $95 million worth of the stock at the end of Q2.
Alongside Caterpillar Inc. (NYSE:CAT), Waste Management, Inc. (NYSE:WM), and Berkshire Hathaway Inc. (NYSE:BRK-B), Crown Castle Inc. (NYSE:CCI) is one of Bill & Melinda Gates Foundation Trust’s top holdings as of Q2 2022.
9. Microsoft Corporation (NASDAQ:MSFT)
Bill & Melinda Gates Foundation Trust’s Stake Value: $242 million
Percentage of Bill & Melinda Gates Foundation Trust’s Portfolio: 1.37%
Number of Hedge Fund Holders: 258
Founded in 1975, Microsoft Corporation (NASDAQ:MSFT) is an American multinational technology corporation that operates within the information technology sector. Microsoft (NASDAQ:MSFT) primarily produces and sells personal computing devices, software, cloud system, and services. More recently, the company has also expanded its investments into metaverse.
Microsoft Corporation (NASDAQ:MSFT) recorded revenue of $51.73 billion in Q2 2022, a year-on-year growth of 12.24%. According to Microsoft’s CFO Amy Hoods, strong bookings growth (due to long-term azure commitments) resulted in excellent commercial execution, which increased Microsoft’s cloud revenue.
Microsoft Corporation (NASDAQ:MSFT) constitutes 1.37% of the total holding of Bill & Melinda Gates Foundation Trust’s Portfolio and was held by 258 hedge fund holders in our database at the end of Q2 2022 and is therefore included in our list of 10 Best Stocks to Buy Now According to Billionaire Bill Gates. Fisher Asset Management is the stock’s leading holder as of Q2 2022, owning Microsoft Corporation (NASDAQ:MSFT) shares worth over $7.3 billion.
8. Deere & Company (NYSE:DE)
Bill & Melinda Gates Foundation Trust’s Stake Value: $269 million
Percentage of Bill & Melinda Gates Foundation Trust’s Portfolio: 1.52%
Number of Hedge Fund Holders: 54
Deere & Company (NYSE:DE), distinguished for its famous green tractors, is one of the oldest manufacturing firms in the S&P 500. Providing farm equipment like tractors, harvesters, and other specialized vehicles, Deere & Company (NYSE:DE) is one of the biggest agriculture machinery manufacturers in the world.
Deere & Company (NYSE:DE) is investing billions of dollars into technology that the company believes will make farming as efficient as it has ever been. At the beginning of this year, Deere & Company (NYSE:DE) announced that it has developed a fully autonomous tractor that will assist in large-scale farming, and is set to release it in the upcoming months. In addition, the company will also come out with sprayers that can detect weeds from crops.
Deere & Company (NYSE:DE) constitutes 1.52% of the total holding of Bill & Melinda Gates Foundation Trust’s Portfolio and was held by 54 hedge fund holders in our database at the end of Q2 2022. First Eagle Investment Management is the stock’s leading holder as of Q2 2022, owning Deere & Company (NYSE:DE) shares worth over $294 million.
7. Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF)
Bill & Melinda Gates Foundation Trust’s Stake Value: $343 million
Percentage of Bill & Melinda Gates Foundation Trust’s Portfolio: 1.94%
Number of Hedge Fund Holders: 6
Headquartered in Mexico City, Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF), also known as Coca-Cola FEMSA, is a Mexican multinational beverage company founded in 1993. 47.8% of Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) is owned by its parent company FEMSA.
Bill & Melinda Gates Foundation Trust is the biggest stakeholder in the company, with 6.2 million shares, worth $343 million. Following the strong Q2 2022 results, Barclays analyst Benjamin Theurer increased the firm’s price target on Coca-Cola FEMSA from $62 to $65 while maintaining an overweight rating on the stock.
Deere & Company (NYSE:DE) constitutes 1.94% of the total holding of Bill & Melinda Gates Foundation Trust’s Portfolio and was held by 6 hedge fund holders in our database at the end of Q2 2022. Renaissance Technologies is one of the stock’s leading holder as of Q2 2022, owning Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) shares worth over $89 million.
6. Walmart Inc. (NYSE:WMT)
Bill & Melinda Gates Foundation Trust’s Stake Value: $367 million
Percentage of Bill & Melinda Gates Foundation Trust’s Portfolio: 2.07%
Number of Hedge Fund Holders: 67
Walmart Inc. (NYSE:WMT) is an American multinational retail company that runs chains of hypermarkets, grocery stores, and department stores that sell items at discounted prices, all from the United States. Headquartered in Bentonville, Arkansas, Walmart Inc. (NYSE:WMT) has more than 10,500 stores and clubs in 24 countries.
In Q2 of FY 2023, Walmart Inc. (NYSE:WMT) reported revenue of $152.86 billion, with a year-over-year growth of 3.83%. This included the net sales of Walmart International which were $24.4 billion, an increase of 5.7% from last year. Normalized EPS of Walmart Inc. (NYSE:WMT) in Q2 of FY 2023 was reported at $1.77, surpassing the estimates by $0.17.
Morgan Stanley’s analyst Simeon Gutman recently raised his price target on Walmart Inc. (NYSE:WMT) to $150 from $145 and kept an overweight rating on the shares. Gutman expects Walmart to stabilize from recent margin choppiness in the second half of the fiscal year 2023.
Walmart Inc. (NYSE:WMT) constitutes 2.07% of the total holding of Bill & Melinda Gates Foundation Trust’s Portfolio and was held by 67 hedge fund holders in our database at the end of Q2 2022 and is therefore included in our list of 10 Best Stocks to Buy Now According to Billionaire Bill Gates. GQG Partners is the stock’s leading holder as of Q2 2022, owning Walmart Inc. (NYSE:WMT) shares worth over $1.1 billion.
Like Walmart Inc. (NYSE:WMT), Caterpillar Inc. (NYSE:CAT), Waste Management, Inc. (NYSE:WM), and Berkshire Hathaway Inc. (NYSE:BRK-B) are among Bill & Melinda Gates Foundation Trust’s top holdings as of Q2 2022.
5. Ecolab Inc. (NYSE:ECL)
Bill & Melinda Gates Foundation Trust’s Stake Value: $671 million
Percentage of Bill & Melinda Gates Foundation Trust’s Portfolio: 3.79%
Number of Hedge Fund Holders: 43
Ecolab Inc. (NYSE:ECL) is a Minnesota-based company that specializes in technology, services, and systems that purify, treat, clean and make water hygienic to use.
Ecolab Inc. (NYSE:ECL) was discussed in the Q1 2022 investor letter of Baron Funds. Here’s what the investment management firm said:
“Lastly, we added to our position in the leading water, hygiene and infection prevention company, Ecolab Inc. (NYSE:ECL), as the stock sold off on concerns over rising raw material costs. We believe the sell-off is overdone as Ecolab’s strong competitive positioning and proven pricing power would enable it to offset the rising costs (though with a lag). We think that the company will continue benefiting from the secular growth trends towards sustainability while still having a long runway for growth with only an 8% share of its estimated $147 billion addressable market.”
Ecolab Inc. (NYSE:ECL) constitutes 3.79% of the total holding of Bill & Melinda Gates Foundation Trust’s Portfolio and was held by 43 hedge fund holders in our database at the end of Q2 2022.
4. Canadian National Railway Company (NYSE:CNI)
Bill & Melinda Gates Foundation Trust’s Stake Value: $1,156 million
Percentage of Bill & Melinda Gates Foundation Trust’s Portfolio: 6.53%
Number of Hedge Fund Holders: 41
Founded in 1919 and headquartered in Montreal, Quebec, The Canadian National Railway Company (NYSE:CNI) is a Canadian Class I freight railway. Canadian National Railway Company (NYSE:CNI) provides services to those in Canada, the Midwestern and Southern United States.
Ken Hoexter, the BofA analyst, recently upgraded Canadian National Railway Company (NYSE:CNI) from neutral to buy, with a price target of $135 from previous $128. Hoexter was previously neutral on most transport carriers, including Canadian National Railway Company (NYSE:CNI), due to the diminishing freight usage, but he said that rail service was starting to improve and that volumes had inflected positively. It was noted that for the week ending September 3, 2022, North American rail traffic was up 5.3% as compared to the same period last year.
Canadian National Railway Company (NYSE:CNI) constitutes 6.53% of the total holding of Bill & Melinda Gates Foundation Trust’s Portfolio and was held by 41 hedge fund holders in our database at the end of Q2 2022. TCI Fund Management is the stock’s leading holder as of Q2 2022, owning Canadian National Railway Company (NYSE:CNI) shares worth over $4.1 billion.
3. Caterpillar Inc. (NYSE:CAT)
Bill & Melinda Gates Foundation Trust’s Stake Value: $1,314 million
Percentage of Bill & Melinda Gates Foundation Trust’s Portfolio: 7.43%
Number of Hedge Fund Holders: 45
Caterpillar Inc. (NYSE:CAT) is the world’s largest manufacturer of construction equipment. Caterpillar Inc. (NYSE:CAT) designs, develops, engineers, manufactures, markets, and sells machinery, engines, financial products, and insurance to customers through a worldwide dealer network.
Diamond Hill Capital mentioned Caterpillar Inc. (NYSE:CAT) in its Q1 2022 investor letter. Here is what the firm has to say:
“We also initiated a position in Caterpillar Inc. (NYSE:CAT), one of the world’s leading manufacturers of construction and mining equipment. It’s a company we know well, as we have owned it in our large cap portfolio for quite some time. Recent share price weakness provided an opportunity for us to add it to our large cap concentrated portfolio at an attractive discount to our estimate of intrinsic value. We believe Caterpillar stands to benefit from increased capital investment supported by a healthier/recovering end market environment, particularly in construction and mining.”
Caterpillar Inc. (NYSE:CAT) constitutes 7.43% of the total holding of Bill & Melinda Gates Foundation Trust’s Portfolio and was held by 45 hedge fund holders in our database at the end of Q2 2022.
2. Waste Management, Inc. (NYSE:WM)
Bill & Melinda Gates Foundation Trust’s Stake Value: $2,850 million
Percentage of Bill & Melinda Gates Foundation Trust’s Portfolio: 16.12%
Number of Hedge Fund Holders: 37
Waste Management, Inc. (NYSE:WM) operates in North America and provides comprehensive waste management. It also gives access to services like disposal, garbage collection, recycling, and dumpster rental.
Diamond Hill Capital mentioned Waste Management, Inc. (NYSE:WM) in its Q1 2022 investor letter. Here is what the firm has to say:
“We also initiated a position in Waste Management (NYSE:WM), one of the largest providers of waste collection services in the US. We believe it is a high-quality business with ownership of key landfill assets that provide pricing power over the long term. Its stock was trading at a discount to our estimate of intrinsic value due to short-term market concerns over an increase in growth investments—we expect these investments to be value-creating over the long term.”
Waste Management, Inc. (NYSE:WM) constitutes 16.12% of the total holding of Bill & Melinda Gates Foundation Trust’s Portfolio and was held by 37 hedge fund holders in our database at the end of Q2 2022.
1. Berkshire Hathaway Inc. (NYSE:BRK-B)
Bill & Melinda Gates Foundation Trust’s Stake Value: $9,471 million
Percentage of Bill & Melinda Gates Foundation Trust’s Portfolio: 53.55%
Number of Hedge Fund Holders: 109
Headquartered in Omaha, Nebraska, Berkshire Hathaway Inc. (NYSE:BRK-B) is a holding company for many businesses, such as Fruit of the Loom and GEICO. Bill & Melinda Gates Foundation Trust is the biggest stakeholder in the company, with 34.6 million shares worth $9.4 billion.
Here is what Weitz Investment Management has to say about Berkshire Hathaway Inc. (NYSE:BRK-B) in its Q1 2022 investor letter:
“The quarter’s standout performers were a pair of insurers, Berkshire Hathaway (BRK-A, BRK-B)… Berkshire possess terrific management and top marks as opportunistic capital allocator.”
Berkshire Hathaway Inc. (NYSE:BRK-B) constitutes 53.55% of the total holding of Bill & Melinda Gates Foundation Trust’s Portfolio and was held by 109 hedge fund holders in our database at the end of Q2 2022 and is therefore included in our list of 5 and 10 Best Stocks to Buy Now According to Billionaire Bill Gates.
You can also take a look at 10 Best Websites To Research Stocks and 10 Dividend Stocks to Buy According to Billionaire Stanley Druckenmiller’s Duquesne Capital.
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Disclosure: None. 10 Best Stocks to Buy Now According to Billionaire Bill Gates is originally published on Insider Monkey.
