In this piece, we will take a look at the 10 large stocks by market capitalization to buy according to Claes Fornell’s CSat Investment.
Csat Investment Advisory LP is an American investment firm based in Michigan. It is headed by Dr. Claes Fornell, who is known for his unique approach to investment. Dr. Fornell has decades of research experience and he is one of the more unique hedge fund investors out there who use this prowess to invest in the stock market.
His investment firm, which conducts its business as ACSI Funds with the ticker BATS:ASCI, sifts out the companies to invest in by favoring firms that top customer satisfaction surveys. This approach also falls in line with Dr. Fornell’s research history, since he has spent his academic time developing methods to achieve high returns alongside lower risk. ASCI Funds uses a technology that is proprietary to Dr. Fornell, and he holds a patent for it in the United States. This technology is now used as an economic indicator, which uses three metrics (satisfaction, expectations, and idealism) to generate a score for each company.
As of the third quarter of this year, CSat Investment’s portfolio was worth $119 million, showing little changes in value over the previous quarter. It invests in hundreds of firms out there, and its three largest investments are in Cupertino, California technology giant Apple Inc. (NASDAQ:AAPL), search engine provider Alphabet Inc. (NASDAQ:GOOG), and Southwest Airlines Co. (NYSE:LUV). Cumulatively, the trio represents roughly 11% of the firm’s total portfolio.
Our Methodology
To pick out the top ten investments of CSat Investment, we took a look at the investment firm’s portfolio for Q3 2021 and then determined the market capitalization of the companies. This enabled us to identify the firms with the largest market value. Once this was done, we analyzed the companies by looking at their quarterly reports, analyst ratings, investor letters, and hedge fund sentiment through a poll of 867 hedge funds conducted by Insider Monkey for the third quarter of this year.
With this context in mind, let’s now take a look at our list of the 10 large stocks by market capitalization to buy according to Claes Fornell’s CSat Investment.
10 Large-Cap Stocks to Buy According to Claes Fornell’s CSat Investment
10. Cisco Systems, Inc. (NASDAQ:CSCO)
CSat Investment’s Stake Value: $936,000
Percentage of CSat Investment’s 13F Portfolio: 0.78%
Number of Hedge Fund Holders: 63
Market Capitalization as of 12/3/21: $237 billion
Cisco Systems, Inc. (NASDAQ:CSCO) is an American manufacturer of networking equipment that provides several devices to enable its customers to connect with each other and to the Internet. Among the equipment that it provides are WiFi routers, ethernet switches, and network security products.
Dr. Fornell’s investment firm owned 18,102 Cisco Systems, Inc. shares as of the third quarter of this year. This stake was worth $936,000 and it represented 0.78% of the investment firm’s portfolio. Similarly, during the same time period, 63 of the 867 hedge funds polled by Insider Monkey held the networking and security firm’s shares.
For its first fiscal quarter, Cisco Systems, Inc. brought in $12.9 billion in revenue and $0.82 in non-GAAP EPS, in a mixed bag performance which saw it miss revenue and beat EPS analyst estimates. Morgan Stanley maintained a $59 price target for the company in October 2021.
As of market close on Friday, December 3, 2021, Cisco Systems, Inc. had a market capitalization of $237 billion. The company’s largest investor is Ken Fisher’s Fisher Asset Management who owns 22.8 million shares worth $1.2 billion.
In a Q1 2021 investor letter, ClearBridge Investments mentioned Cisco Systems, Inc. and outlined that:
“Also in IT, we added Cisco Systems, which provides IT and networking services in the form of network security, software development and cloud computing. Cisco continues to derive over 50% of its sales from on-premise deployments of its products of enterprise and small and midsize customers, while recurring revenues from software are becoming a larger part of the mix. Return-to-office enterprise spending should offer upside to its core campus business. Cisco was an early technology leader in sustainability over two decades ago, through its Internet-connecting capabilities which supported live concerts in partnership with the United Nations Development Program to raise awareness and funds to fight poverty. Cisco has very strong environmental standards (including driving lower energy consumption in IT departments through new product innovations and a longstanding goal to reduce emissions and reliance on non-renewable energy sources). Its data privacy and supply chain management policies are best in class.”
Cisco Systems, Inc. joins Alphabet Inc., Apple Inc., and Southwest Airlines Co. in the list of Mr. Fornell’s top stocks.
9. Oracle Corporation (NYSE:ORCL)
CSat Investment’s Stake Value: $935,000
Percentage of CSat Investment’s 13F Portfolio: 0.78%
Number of Hedge Fund Holders: 56
Market Capitalization as of 12/3/21: $241 billion
Oracle Corporation (NYSE:ORCL) is an American software firm that provides products for both enterprises and consumers. It offers an internet browser, a cloud computing platform, data warehousing, and transaction processing services among others.
As Q3 2021 came to an end, Dr. Fornell’s CSat Investment owned a stake of $935,000 in Oracle Corporation via 13,330 shares. The stake represented 0.78% of its portfolio. A Q3 2021 Insider Monkey survey found out that 56 of 867 hedge funds owned Oracle Corporation shares.
Oracle Corporation’s largest investor is Jean-Marie Eveillard’s First Eagle Investment Management who owns 26 million shares that are worth $2.2 billion. As of 3rd December 2021, the company has a market capitalization of $241 billion.
For its Q1, Oracle Corporation brought in $9.7 billion in revenue and $1.03 in non-GAAP EPS, allowing it to beat analyst estimates for EPS only. Credit Suisse set a $110 price target for the company in November 2021, stating that it should do well in the software market.
Oracle Corporation was mentioned by First Eagle Investment Management in its Q3 2021 investor letter. Here is what the firm said:
“Leading contributors in the First Eagle Global Fund this quarter included Oracle Corporation. Oracle continues to make progress reinventing itself for the cloud-computing environment. Impressively, it has affected this turnaround primarily through organic research & development and smaller, well-priced acquisitions rather than expensive, headline-grabbing mergers. Results in recent quarters have suggested Oracle’s subscription-based model is gaining traction, and we believe the company will be a strong competitor in the huge addressable public cloud market. With a high level of insider ownership and a strong balance sheet, Oracle has been a strong cash flow generator and has historically returned excess cash to shareholders in the form of dividends and share buybacks.”
8. The Walt Disney Company (NYSE:DIS)
CSat Investment’s Stake Value: $1.9 million
Percentage of CSat Investment’s 13F Portfolio: 1.66%
Number of Hedge Fund Holders: 101
Market Capitalization as of 12/3/21: $265 billion
The Walt Disney Company (NYSE:DIS) is an entertainment provider that is best known for its television studios and its theme parks. Its parks are globally renowned for their unique features and the company is an iconic American brand.
The Walt Disney Company brought in $18 billion in revenue and $0.37 in non-GAAP EPS for its fourth fiscal quarter, missing analyst estimates for both. Loop Capital reduced its price target to $190 from $205 in November 2021, outlining that a larger content portfolio will affect profitability but increase its subscription base.
CSat Investment owned 10,728 The Walt Disney Company shares during the third quarter of 2021. These were worth $1.9 million and represented 1.66% of its portfolio. 101 of the 867 hedge funds polled by Insider Monkey owned the company’s shares during the same time period.
The Walt Disney Company market capitalization stood at $265 billion as of Friday, December 3rd, 2021.
In addition to Southwest Airlines Co., Alphabet Inc. and Apple Inc., The Walt Disney Company is one of the notable stocks in CSat’s portfolio.
The Walt Disney Company’s largest investor is Ken Fisher’s Fisher Asset Management, which owns 11 million shares worth $1.8 billion. It was mentioned by RiverPark Funds in a Q2 2021 investor letter which outlined that:
“DIS shares declined for the quarter, taking a pause after a big fourth quarter and first quarter stock price advance, as Disney+ subscriber numbers were disappointing to investors. Disney+, the company’s DTC streaming business, had blown past previous subscriber projections, having gone from zero to 104 million in 17 months, but investors were now expecting 109 million subscribers. Management still expects significant continued growth to 230-260 million subscribers in 2024.
DIS is blessed with a deep library of unique content that includes both live sports (providing large, non-time shifted audiences) and incomparable brands including Disney, Marvel, Pixar and Lucasfilm, as well as the ABC network. The company also has a wealth of upcoming new content, expecting over 100 original titles per year, including two new Star Wars spin-off series, 10 Star Wars films, 10 Marvel films, 15 Disney and Pixar films and 15 Disney and Pixar series.
Now that the disruption in its theme park, cruise and theatrical businesses appears to be coming to an end, we believe that Disney is among the best-positioned media companies in the new landscape to combine multi-channel and DTC distribution. We also note that DIS has an extremely strong balance sheet and a growing pool of free cash flow to be used both to return to shareholders and to invest in future opportunities.”
7. Netflix, Inc. (NASDAQ:NFLX)
CSat Investment’s Stake Value: $2.1 million
Percentage of CSat Investment’s 13F Portfolio: 1.8%
Number of Hedge Fund Holders: 106
Market Capitalization as of 12/3/21: $266 billion
Netflix, Inc. (NASDAQ:NFLX) is an online television and film streaming services, provider. It offers customers content through its website, and in addition to sourcing productions from others, it has also developed its own capabilities over the years.
Mr. Fornell’s investment firm held 4,141 Netflix, Inc. shares worth $2.1 million and constituting 1.8% of its portfolio during Q3 2021. During the same time period, 106 of the 867 hedge funds polled by Insider Monkey had holdings in the streaming provider.
Netflix, Inc. had a market capitalization of $266 billion as of December 3rd, 2021.
Keybanc raised the company’s price target to $725 from $690 in November 2021, sharing its belief that the company should grow strongly when compared to its peers. Netflix, Inc. brought in $7.4 billion in revenue and $3.19 in GAAP EPS for its Q3, beating analyst estimates for EPS.
Netflix, Inc.’s largest shareholder is Ken Fisher’s Fisher Asset Management, which owns 4 million shares worth $2.5 billion.
Ensemble Capital mentioned the company in its Q3 2021 investor letter, stating that:
“Netflix stock had a disappointing first half of 2021 performance, treading water while the S&P 500 rallied, after a very strong 67% return in 2020. It benefited from the global pandemic in 2020, signing on 36.6 million new subscribers vs the typical 25 million or so it typically does. Total subscribers exceeded 200 million, up 22% over the previous year. However, in the first half of 2021, new subscriber additions slowed substantially, totaling only 5.5 million due to slower new content additions impacted by production delays, a resumption of outdoor activity as people everywhere adjusted to living with COVID, and the impact of a “pull-forward effect” on subscriber growth in last year’s very strong results. The third quarter saw new content velocity start to pick up, which is usually what drives new subscribers to the service, with expectations of an even stronger content slate going into the final quarter of the year, causing the stock to increase 15% in the quarter.”
6. JPMorgan Chase & Co. (NYSE:JPM)
CSat Investment’s Stake Value: $1 million
Percentage of CSat Investment’s 13F Portfolio: 0.88%
Number of Hedge Fund Holders: 101
Market Capitalization as of 12/3/21: $467 billion
JPMorgan Chase & Co. is a financial services company that offers consumer banking, wealth management, commercial banking, and investment banking services. It is one of the largest banks in the world.
During Q3 2021, CSat Investment owned 6,909 JPMorgan Chase & Co. shares. These were worth $1 million and made up 0.88% of its portfolio. Of the 867 hedge funds surveyed by Insider Monkey for the same time period, 101 had holdings in the bank.
JPMorgan Chase & Co. is a part of Mr. Fornell’s favorite stocks, with others being Southwest Airlines Co., Alphabet Inc., and Apple Inc..
For its Q3, JPMorgan Chase & Co. raked in $29.9 billion through revenue and $3.74 through GAAP EPS, beating analyst estimates for EPS only. Its price target was raised to $210 from $200 by Wells Fargo in October 2021, which outlined that the bank has sound fundamentals.
JPMorgan Chase & Co. was worth $467 billion in market value as of the market close on Friday, 3rd December 2021.
JPMorgan Chase & Co.’s largest investor is Ken Fisher’s Fisher Asset Management who owns 7 million shares worth $1.1 billion.
5. Berkshire Hathaway Inc. (NYSE:BRK-A)
CSat Investment’s Stake Value: $2.2 million
Percentage of CSat Investment’s 13F Portfolio: 1.88%
Number of Hedge Fund Holders: 106
Market Capitalization as of 12/3/21: $621 billion
Berkshire Hathaway Inc. (NYSE:BRK-A) is the world’s largest financial services firm that has listed its shares on the public market. It also has the most expensive stock in the world, with a price of $420,700 for a share as of December 2. With a portfolio worth $293 billion as of Q3 2021, Berkshire Hathaway Inc. owns several companies and has minority stakes in others.
Mr. Fornell’s investment firm held 8,775 Berkshire Hathaway Inc. shares during Q3 2021, which were worth $2.2 million and represented 1.88% of its portfolio.
Berkshire Hathaway Inc. brought in $10 billion in net earnings for Q3, in a drastic annual drop of more than $20 billion. Its Class A shares earned $6,882 per share during the same quarter. Keefe Bruyette highlighted this in a November 2021 note but kept the company’s price target unchanged at $485,000.
Berkshire Hathaway Inc.’s market value as of Friday, December 3rd, 2021 was $621 billion. Its largest investor by the third quarter was Michael Larson managing the Bill & Melinda Gates Foundation Trust who owned 38 million shares worth $10.5 billion.
In a Q3 2021 investor letter, Black Bear Value partners mentioned Berkshire Hathaway Inc., stating that:
“Please see Q1 letter for our Berkshire on a Napkin investment exercise. We have written on it extensively and will save your eyeballs from extraneous reading. Berkshire is very cheap for owning such high-quality businesses and will continue to grind higher and compound value for us.”
4. Amazon.com, Inc. (NASDAQ:AMZN)
CSat Investment’s Stake Value: $3 million
Percentage of CSat Investment’s 13F Portfolio: 2.58%
Number of Hedge Fund Holders: 242
Market Capitalization as of 12/3/21: $1.7 trillion
Amazon.com, Inc. (NASDAQ:AMZN) is an online retailer based out of the United States. Its platform allows sellers and merchants to connect with their customers. The company has also expanded into other areas such as data centers, consumer electronics, and satellite internet.
CSat Investment owned a $3 million stake in Amazon.com, Inc. that made up 2.58% of its portfolio by Q3 2021 end. This was through 994 shares. 242 of the 867 hedge funds polled by Insider Monkey during the same period held the company’s shares.
For its third fiscal quarter, Amazon.com, Inc. brought in $110 billion in revenue and $6.12 in GAAP EPS, missing estimates for both. In a December 2021 note, UBS set a $4,700 price target and a Buy rating for the retailer, stating that, its retail and cloud divisions are among the strongest in the market.
As of December 3rd, 2021, Amazon.com, Inc.’s market value was $1.7 trillion.
Ken Fisher’s Fisher Asset Management is Amazon.com, Inc.’s largest investor according to Insider Monkey’s research. It owns 1.9 million shares worth $6 billion.
In a Q3 2021 investor letter, Madison Funds mentioned Amazon.com, Inc. and stated that:
“We did add a modest new position weight to the portfolio in the quarter in Amazon.com, Inc. stock (AMZN). We acknowledge that many aspects of Amazon’s merit as an investment are well appreciated. However, our work leads us to conclude that shares are attractive. Leadership positions in both e-commerce and cloud computing provide the company with significant durable competitive advantages in industries that we think can produce above average growth over the next decade. Over the past year, AMZN shares have trailed the market as investors debate near-term growth prospects following the pandemic-induced e-commerce demand. Additionally, margins have been depressed due to Amazon’s unprecedented increases in spending to build out fulfillment and in-house logistics capabilities – Amazon will build out more square footage this year and last than it did cumulatively over the previous 10 years, more than doubling its in-house delivery capacity. We like the investments Amazon is making and believe they will further advantage the company relative to other retailers, making it nearly impossible for competitors to match the same level of delivery speed and convenience. With its large and frequently engaged customer base, Amazon has multiple mechanisms to make money, including selling advertising and enhanced subscription services. Within the cloud business, we forecast Amazon Web Services (AWS) leveraging its strengths in Infrastructure-as-a-service (IaaS) to move into higher value segments of cloud computing (such as platform-as-a-service: PaaS), allowing the company to continue outgrowing the overall IT sector with strong profitability. While Amazon shares have performed extremely well over the long-term, we think near-term concerns about whether Amazon will earn a return on its accelerated investments provide an opportunity now for investors willing to look through the investment period. Our view is that the investments likely earn strong returns and extend Amazon’s competitive advantages and above average growth.”
3. Alphabet Inc. (NASDAQ:GOOG)
CSat Investment’s Stake Value: $3.6 million
Percentage of CSat Investment’s 13F Portfolio: 3.04%
Number of Hedge Fund Holders: 156
Market Capitalization as of 12/3/21: $1.89 trillion
Alphabet Inc. is the holding company for the search engine giant Google. In addition to Google, it also has other services such as YouTube, Cloud and Other Bets.
Mr. Fornell’s CSat Investments owned 1,752 Alphabet Inc. shares worth $3.6 million and constituting 3.04% of its portfolio during the third quarter of this year. Additionally, during Q3 2021, 156 of the 867 hedge funds polled by Insider Monkey held stakes in the company.
Alphabet Inc. brought in $65 billion in revenue and $27.99 in GAAP EPS during its Q3, beating analyst estimates for both. Tigress Financial raised its price target to $3,540 from $3,185 in December 2021, outlining that investments in artificial intelligence spell a positive future for the company.
In its Q3 2021 investor letter, Oakmark Funds mentioned Alphabet Inc.. Here is what the fund said:
“Alphabet, a U.S. communication services provider, was once again a top contributor for the quarter, solidifying its rank as a top contributing stock for the one-year period. The company’s financial results repeatedly exceeded expectations. In particular, its revenue grew faster than expected and its margin trends improved across all segments. In addition, management has executed $24.4 billion of stock repurchases so far in 2021. After further examination, we recently increased our estimate of Alphabet’s intrinsic value based on the company’s better than expected operating leverage and its notable efficiency improvements. As a result, we continue to believe that Alphabet is trading at a significant discount to its intrinsic value.”
2. Microsoft Corporation (NASDAQ:MSFT)
CSat Investment’s Stake Value: $1.1 million
Percentage of CSat Investment’s 13F Portfolio: 0.95%
Number of Hedge Fund Holders: 250
Market Capitalization as of 12/3/21: $2.4 trillion
Microsoft Corporation (NASDAQ:MSFT) is an American technology firm that is best known for its Windows operating system. One of the pioneering technology companies, Microsoft has diversified its businesses over the years to now cover notebooks, gaming consoles, and cloud computing among others.
Microsoft Corporation brought in $45 billion in revenue and $2.27 in non-GAAP EPS for its first fiscal quarter, pleasing Wall Street by beating estimates for both. Credit Suisse set a $400 price target for the Windows maker in November 2021, sharing that it will deliver strong results in the upcoming years.
During Q3 2021, Mr. Fornell’s investment firm owned 4,807 Microsoft Corporation shares which were worth $1.3 million and made up 0.95% of its portfolio. During the same time period, 250 of the 867 hedge funds surveyed by Insider Monkey had holdings in the technology firm.
Microsoft Corporation was worth $2.4 trillion in market capitalization as of the close of trading on Friday, December 3, 2021.
Microsoft Corporation’s largest shareholder is Ken Fisher’s Fisher Asset Management who owns 25 million shares worth $7 billion.
In its Q1 2021 investor letter, Polen Capital, mentioned Microsoft Corporation (NASDAQ:MSFT) outlining that:
“We have written extensively about Microsoft in recent commentaries. It was our leading contributor last year and one of our largest weightings within the Portfolio. It continues to experience business momentum through several dominant, essential, and competitively advantaged businesses, like Office 365 and Azure. The markets it competes for are enormous, which gives the company the ability to compound at scale. In the past quarter alone, the company generated over $40 billion in revenue, representing a 17% growth rate. The inherent operating leverage in Microsoft’s business model continues and led to 34% earnings growth this past quarter. Despite the broad rotation we saw in the first quarter and Microsoft’s robust performance in 2020, we think its business fundamentals continue to exhibit strength, and the stock continues to reflect the fundamentals.”
1. Apple Inc. (NASDAQ:AAPL)
CSat Investment’s Stake Value: $5.8 million
Percentage of CSat Investment’s 13F Portfolio: 4.92%
Number of Hedge Fund Holders: 120
Market Capitalization as of 12/3/21: $2.7 trillion
Apple Inc. is one of the largest consumer electronics companies in the world that is known for its iconic product design and closed ecosystem. Made famous by the mercurial approach of its late co-founder Mr. Steve Jobs, Apple’s products target the smartphone, wearable, and personal computing industries.
CSat Investment owned 47,965 Apple Inc. shares during the third quarter of this year. These were worth $5.8 million and represented 4.92% of its portfolio. 120 of the 867 hedge funds polled by Insider Monkey for Q3 2021 owned the company’s shares.
For its fourth fiscal quarter, Apple Inc. posted $83 billion in revenue and $1.24 in GAAP EPS, missing analyst estimates for revenue and meeting them for EPS. Its price target was raised to $200 from $185 by Wedbush in November 2021, with the firm believing that Apple Inc. will touch $3 trillion in market capitalization in 2022.
Apple Inc. was worth $2.7 trillion in market capitalization by the close of trading on Friday, December 3rd, 2021. The company’s largest shareholder is Warren Buffett’s Berkshire Hathaway who owns a whopping 887 million shares worth an equally staggering $125 billion.
Distillate Capital mentioned Apple Inc. in its Q1 2021 investor letter. Here is what the fund said:
“Apple is an even more notable situation and one that highlights our free cash valuation methodology and bears further discussion given its Q3 ‘20 sale from our strategy. For an extended period, Apple was extraordinarily inexpensive on a free cash flow basis and was the largest position in our strategy, exceeding 5% of the portfolio.”
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This article is originally published at Insider Monkey.
