In this article, we will take a look at the 10 Best Stocks To Invest In According to Billionaires.
Billionaires and top hedge fund managers typically dominate the stock market, focusing on leading companies with strong track records and exceptional performance. They usually don’t waste time with underperformers—they target the market’s elite.
The Stock Market Rally
Before diving into the top stock picks among billionaires, reviewing how the market has performed so far this year is essential. On September 18, the Federal Reserve cut its policy rate by 50 basis points, lowering it to 4.75%–5.00% from 5.25%–5.50%. This move fueled a market rally, pushing stocks to a new intraday record high, and marking the 39th all-time high of 2024—the first since mid-July. Minneapolis Fed president Neel Kashkari acknowledged that while the rate cut was unusual historically, shifting the policy focus from controlling high inflation to addressing a weakening labor market was necessary. Here are some comments:
“Right now, we still have a strong, healthy labor market. But I want to keep it a strong, healthy labor market, and a lot of the recent inflation data is coming in looking very positive that we’re on our way back to 2%. So I don’t think you’re going to find anybody at the Federal Reserve who declares mission accomplished, but we are paying attention to what risks are most likely to materialize in the near future.”
Market expectations point to an equal probability of the Federal Open Market Committee (FOMC) cutting rates by either a quarter- or half-percentage point at its November meeting, with a higher chance of the larger reduction in December. Overall, markets are signaling the Fed’s intent to bring rates to a “neutral” level that neither stimulates nor restricts economic growth.
What the Top Dogs of Wall Street are Saying About the Market
For nearly two years, bulls have dominated Wall Street, driven by a resilient U.S. economy and growing enthusiasm around artificial intelligence (AI). This momentum has propelled the Dow Jones Industrial Average, the S&P 500, and the tech-heavy Nasdaq Composite to multiple record highs in 2024. Despite the surge, not everyone seems hopeful about the market, with some of the most influential billionaire investors, including Warren Buffett of Berkshire Hathaway, signaling caution. Buffett, known for his long-term optimism, has been a net seller of stocks for seven straight quarters.
On the other hand, billionaire investor Ray Dalio recently raised concerns about the “enormous amount of debt” burdening the U.S. economy. He cautions that neither former President Donald Trump nor Vice President Kamala Harris is likely to focus on addressing debt sustainability in the upcoming presidential election, suggesting that the pressure from the $35.3 trillion national debt will persist, regardless of the election outcome.
With that, let’s take a look at the 10 Best Stocks To Invest In According to Billionaires.
A portfolio manager holding a laptop and looking over a stock market ticker.
Our Methodology
In this article, we analyzed Insider Monkey’s exclusive database of billionaire stock holdings to select the 10 stocks with the highest number of billionaire investors. These billionaires are founders or managers of some of the world’s leading hedge funds and companies.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Stocks To Invest In According to Billionaires
10. Thermo Fisher Scientific Inc. (NYSE:TMO)
Number of Billionaire Investors: 23
Thermo Fisher Scientific Inc. (NYSE:TMO) is a leading American biotech and life sciences company, providing a wide array of products and services. Since its formation, Thermo Fisher Scientific Inc. (NYSE:TMO) has experienced substantial growth, driven primarily by a series of strategic acquisitions, including the likes of Life Technologies and Affymetrix. Notable billionaires with stakes in TMO include Ken Fisher, Ken Griffin, and Israel Englander.
In Q2 2024, the company reported $10.5 billion in revenue, reflecting a slight 1.3% decline year-over-year, though it still surpassed analysts’ expectations by $23.4 million. Thermo Fisher’s operating cash flow increased to $1.96 billion from $1.54 billion in the previous year, and free cash flow rose to $1.7 billion, up from $1.26 billion.
On September 20, Morgan Stanley raised the TMO stock’s price target to $680 from $655, maintaining an Overweight rating. The analyst highlighted the company’s consistent long-term growth outlook and reiterated 2024 guidance, which provides confidence in its sector performance through 2025.
As of Q2 2024, Thermo Fisher Scientific Inc. (NYSE:TMO) was held in 108 hedge fund portfolios, down slightly from 110 in the previous quarter, with stakes valued at over $8.56 billion. Ken Fisher’s Fisher Asset Management remained the company’s largest shareholder in the period. Overall, 23 billionaires held stakes in the biotech company.
Polen Focus Growth Strategy stated the following regarding Thermo Fisher Scientific Inc. (NYSE:TMO) in its first quarter 2024 investor letter:
“We increased our positions in Thermo Fisher Scientific Inc. (NYSE:TMO), Visa, Zoetis, Nike, and Abbott Labs. Each of these companies is durable and available at attractive valuations, in our view, for the growth we see ahead. In fact, in the case of ThermoFisher, Nike, and Abbott Labs, we expect accelerating earnings growth in the back half of 2024 after more difficult earnings growth periods pass for each of these companies. ThermoFisher and Abbott will finally wind down most of their COVID-19 testing and vaccine-related efforts due to a lack of demand, so these should no longer be revenue growth headwinds.”
9. Mastercard Incorporated (NYSE:MA)
Number of Billionaire Investors: 23
Mastercard Incorporated (NYSE:MA) is a global leader in payment technology, serving a broad spectrum of clients, including consumers, small and medium businesses, government agencies, large enterprises, banks, and credit unions.
The company recently announced a quarterly cash dividend of $0.66 per share, marking a notable development for shareholders. In addition, Mastercard Incorporated (NYSE:MA) made a strategic move by acquiring Recorded Future, a global leader in threat intelligence, for $2.65 billion. With Recorded Future generating over $300 million in revenue, this acquisition is expected to boost Mastercard’s growth and broaden its service offerings. Following this announcement, Baird reaffirmed its Outperform rating for MA and maintained a price target of $545.
The payments giant also posted strong second-quarter financial results, with net revenues climbing 13% and adjusted earnings surging 24%. This growth was fueled by increased consumer spending, cross-border transaction volumes, and expansion in value-added services.
According to Insider Monkey’s database, 23 billionaires hold stakes in Mastercard Incorporated (NYSE:MA), including prominent investors like Ken Fisher and Warren Buffett.
Here’s what L1 Capital International Fund mentioned about Mastercard Incorporated (NYSE:MA) in its Q2 2024 investor letter:
“The share prices of Mastercard Incorporated (NYSE:MA) and Visa, both long term Fund investments, have both drifted down over recent months. There have been no dramatic developments, but there has been a general slight softening in the rate of growth of consumer spending in the U.S. and globally, a court decision rejecting Mastercard and Visa’s proposed settlement of a long-lasting dispute with U.S. merchants as well as other modest adverse regulatory developments. We continue to view Mastercard and Visa as two of the highest quality businesses in the world, and both are well placed to continue to deliver attractive, risk adjusted returns to shareholders over time.”
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