In this article, we will take a look at the 10 safest stocks to buy now.
Choosing the right stocks to add to an investment portfolio can be a daunting and time-consuming endeavor, a statement that applies to even the most veteran investors involved in the market. Most beginner investors either have little knowledge and insight with regards to stock investing or are spurred by bad advice, causing them to end up with a series of losses to their account.
This becomes more evident based on the increasing number of participants within the stock market this year alone, with people looking to either safeguard their futures, or searching for opportunities for passive income. Major economic disruption throughout the world has caused a rise in inflation beyond what was predicted, exacerbated by not only the recurrent, but also the newer strains of the Covid-19 virus. According to The Guardian, the UK experienced a 2.1% rise in the consumer price index (CPI) this May, a sharp jump from just 1.5% earlier in March, 1.8% higher than what analysts were expecting. In this environment, aspiring investors, prone to stumbling in their investment journeys, should practice extreme caution, as well as carry out intensive research on the stock market.
Some of the most profitable stocks with market reliability include Amazon.com, Inc. (NASDAQ:AMZN), Facebook, Inc. (NYSE:FB), Visa, Inc. (NYSE:V), Microsoft Corporation (NASDAQ:MSFT) and Apple, Inc. (NASDAQ:AAPL), among other discussed in more detail below.
Pixabay/Public Domain
Our Methodology
Let us now analyze our list of the 10 safest stocks to buy now. The list will consist of mostly blue-chip stocks that are resilient against market volatility, have long-term growth potential, famous among elite and veteran investors, and have positive analyst ratings.
Why should we pay attention to hedge fund sentiment while choosing stocks?
Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the S&P 500 ETF (SPY). Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Safest Stocks To Buy Now
10. Salesforce.com, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 108
Salesforce.com, Inc. (NYSE:CRM) is a cloud-based software company headquartered in San Francisco, California, that provides a diverse set of services and products, including customer service, application development and analytics. The company has a market capitalization of $268.81 billion and ranks tenth on our list of the 10 safest stocks to buy now.
On September 24, RBC Capital analyst Rishi Jaluria raised his price target on Salesforce.com, Inc. (NYSE:CRM) to $325 from $310, and kept an Outperform rating on the shares of the company.
In its Q2 2021 investor letter RV Capital Management explains why it began its investment in Salesforce.com, Inc. (NYSE:CRM). Here is what the fund said:
“Part 5: A New Investment in Salesforce.com
The assertion that mega caps can also be mispriced is a good segue to our second new investment in Salesforce.com. Salesforce is one of the largest software companies in the world with a market value of around US$ 250 bn. It is best known for its customer relationship management or “CRM” solution, known as its Sales Cloud. It has three additional clouds (“Service,” “Marketing” and “Commerce”) as well as a thriving platform business with both owned and 3rd party software solutions.
I first came across Salesforce in 2013. I was invested in Bechtle, a German company that provides companies with their in-house IT. I kept hearing about a strange new concept called “the Cloud” and wanted to get up to speed on the topic in case it was a risk to Bechtle. As a result, I picked up a copy of “Behind the Cloud”. It documents how Salesforce.com pioneered cloud-based software and revolutionised the software industry.
Since then, I have followed Salesforce from a distance and visited it several times in San Francisco. I did not consider it seriously as an investment though as for much of the period, I had not yet overcome my aversion to loss-making companies.
This changed in December last year when Salesforce announced the acquisition of Slack (a former investment of the Business Owner Fund, described in my 2020 half-year letter) for US$ 27 bn. On the date of announcement, Salesforce’s market value fell by around US$ 20 bn. Effectively, the market was saying that Slack was almost worthless, which, as an enthusiastic owner of Slack, I disagreed with. Initially, I decided to keep our Slack stock and roll it into Salesforce (as part of the consideration was in Salesforce’s own stock). As Salesforce’s price fell further in the subsequent months, I bought its stock directly to make it a full-size position post the closing of the Slack acquisition…” (Click here to see the full text)
9. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders: 112
The Walt Disney Company (NYSE:DIS), more commonly known as Disney, is a multinational mass media and entertainment conglomerate. The company has a diversified interest in entertainment, operating multiple international theme parks, as well as a number of film holdings. The California-based mass media company ranks ninth on our list of the 10 safest stocks to buy now.
On September 22, Bank of America analyst Jessica Reif Ehrlich reiterated a Buy rating alongside a $223 price target on the shares of The Walt Disney Company (NYSE:DIS), noting that the headwinds faced by the company’s Disney+ will be short-lived.
At the end of the second quarter of 2021, 112 hedge funds in the database of Insider Monkey held stakes worth over $10.8 billion in The Walt Disney Company (NYSE:DIS). This is compared to 134 hedge funds in the previous quarter with stakes worth approximately $12.5 billion.
In its Q2 2021 investor letter, RiverPark Funds notes that The Walt Disney Company (NYSE:DIS) has a very strong balance sheet alongside a growing pool of cash flow. Here is what the fund said:
“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.”
8. Netflix, Inc. (NASDAQ:NFLX)
Number of Hedge Fund Holders: 113
Netflix, Inc. (NYSE:NFLX) is media service and production company based in California. Ranked eighth on the list of the 10 safest stocks to buy now, the company provides entertainment services through its streaming platform. In the first week of October, the firm rose more than 4.3% due to the news that it bought Night School Studio.
On October 1, Guggenheim analyst Michael Morris raised his price target on Netflix, Inc. (NYSE:NFLX) to $685 from $600, and kept a Buy rating on the company shares.
Polen Capital, an investment management firm, mentioned Netflix, Inc. (NASDAQ: NFLX) in its Q2 investor letter and discussed its stance on the firm. Here’s what they said:
“For Netflix, we believe the underlying businesses for the company remain strong. With Netflix, we anticipate content spending to moderate as subscriber growth continues, which we believe should result in attractive double-digit earnings and cashflow growth over the next five years and beyond.”
7. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 138
Apple Inc. (NASDAQ: AAPL) is a multinational technology company that is involved in the development, manufacturing, and sales of electronics and accessories. Founded in 1976, the California-based tech giant has a market capitalization of $2.38 trillion, and is ranked seventh on our list of the 10 safest stocks to buy now.
By the end of the second quarter of 2021, 138 hedge funds out of the 873 tracked by Insider Monkey held stakes in Apple Inc. (NASDAQ:AAPL), worth roughly $145.5 billion, up from 127 hedge funds in the preceding quarter, with stakes worth approximately $131 billion.
For the fiscal third quarter of 2021, Apple Inc. (NASDAQ:AAPL) reported earnings per share of $1.30, crossing estimates by $0.29. The company also reported revenues amounting to $81.43 billion, an increase of 36.44% on a year-over-year basis, surpassing market predictions by $8.09 billion.
On October 6, Morgan Stanley analyst Katy Huberty maintained an Overweight rating and $168 price target on Apple Inc. (NASDAQ:AAPL), noting that the App Store net revenue grew by 16.1%.
Out of the hedge funds being tracked by Insider Monkey, Warren Buffett’s Berkshire Hathaway is a leading shareholder in Apple Inc. (NASDAQ:AAPL) with over 887 million shares worth $121.5 billion.
ClearBridge Investments, in its Q1 2021 investor letter, mentioned Apple Inc. (NASDAQ: AAPL). Here is what the fund said:
“As we actively manage holdings and position sizes, we look to regularly recycle capital into more compelling opportunities. Maintaining our valuation discipline, we sharply reduced our position in Apple, whose shares more than doubled following our initial purchase in mid-2019 with an earnings multiple rising from the low-to-mid teens to nearly 30x.”
6. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 155
Alphabet Inc. (NASDAQ:GOOG) is a multinational conglomerate that operates as a diversified technology company. The California-based company owns and operates several internet-based platforms. Ranked sixth on the list of the 10 safest stocks to buy now, Alphabet Inc. (NASDAQ:GOOG) has a market capitalization of $1.86 trillion.
As of the end of the June quarter, 155 hedge funds out of the 873 tracked by Insider Monkey held stakes in Alphabet Inc. (NASDAQ:GOOG).
On September 17, Jefferies analyst Brent Thill raised his price target on Alphabet Inc. (NASDAQ:GOOG) to $3,325 from $3,150, and kept a Buy rating on the shares of the company.
In its Q2 2021 investor letter, Mawer Investment Management named Alphabet Inc. (NASDAQ:GOOG) among the companies that reported strong results. Here is what the fund said:
“Many higher growth companies reported strong results amid the pick-up in broad economic activity including Alphabet. These higher growth companies tend to have increased sensitivity to a change in discount rates and were supported as long-term interest rates stabilized over the period.”
5. Mastercard Incorporated (NYSE:MA)
Number of Hedge Fund Holders: 156
Mastercard Incorporated (NYSE:MA) operates as a multinational financial services company that engages in the provision of transaction processing and other payment-related products and services. The company is ranked fifth on the list of the 10 safest stocks to buy now.
At the end of the second quarter of 2021, 156 hedge funds in the database of Insider Monkey held stakes worth $17.10 billion in Mastercard Incorporated (NYSE:MA), up from 154 the preceding quarter worth $17.09 billion. Alexander Becker of Codex Capital is a leading shareholder in the company.
On August 17, JPMorgan analyst Tien-tsin Huang raised the price target on Mastercard Incorporated (NYSE:MA) to $430 from $427, and kept an Overweight rating on the shares of the company.
In the Q2 2021 investor letter of Qualivian Investment Partners, the fund mentioned Mastercard Incorporated (NYSE:MA). Here is what the fund said:
“Mastercard: Q2 revenue and EPS beat consensus estimates by 3.7% and 12% respectively. Operating margins also beat consensus by +240 bps. Gross domestic volume growth of +38.3% (+32.8% in constant currency) was buttressed by continued e-commerce strength and better in-store performance, while purchase volumes grew 41.8% (35.5% in constant currency). Cross border performance was strong, but durability remains uncertain given uncertainty arising from the Delta variant and its impact on travel and tourism. We believe Mastercard has a robust runway for growth given further travel recovery, new/existing partnerships, traction in digital payments, and ongoing economic recovery.”
4. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 162
Visa Inc. (NYSE:V) is a multinational financial services company that enables electronic funds transfers throughout the world. Based in California, the company ranks fourth on our list of the 10 safest stocks to buy now.
At the end of the second quarter of 2021, 162 hedge funds in the database of Insider Monkey held stakes worth $27.6 billion in Visa Inc. (NYSE:V), down from 164 in the previous quarter with stakes worth $26.5 billion.
On August 17, JPMorgan analyst Tien-tsin Huang raised the firm’s price target on Visa Inc. (NYSE:V)to $267 from $249, and kept an Overweight rating on the shares.
The company issued its quarterly earnings report for the third quarter of 2021 on July 27, with earnings per share at $1.49, beating forecast estimates by $0.14. The company also reported a revenue of $6.13 billion, surpassing predicted revenues by $272.49 million.
In its Q1 2021 investor letter, ClearBridge Investments declared selling off companies that were not as profitable in order to make room to add Visa Inc. (NYSE:V) to their portfolio. Here is what the fund said:
“To make room for these new names with more attractive outlooks related to the reopening, we sold out of companies where the thesis is not playing out at the pace we expected including Visa.”
3. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 238
Microsoft Corporation (NASDAQ:MSFT) is a multinational technology company that specializes in the production of computer software, consumer electronics and computer related services. Ranked third on the list of the 10 best safest stocks to buy now, Microsoft Corporation (NASDAQ:MSFT) has a market capitalization of $2.22 trillion.
On September 17, Tigress Financial analyst Ivan Feinseth raised his price target on Microsoft Corporation (NASDAQ:MSFT) to $366 from $303, and kept a Buy rating on the shares.
By the end of the second quarter of 2021, 238 hedge funds out of the 873 tracked by Insider Monkey held stakes in Microsoft Corporation (NASDAQ:MSFT), worth roughly $62.46 billion, compared to 251 hedge funds in the previous quarter, with stakes worth approximately $58.9 billion.
In its Q1 2021 investor letter, Polen Capital, an investment management firm, highlighted a few stocks and Microsoft Corporation (NASDAQ:MSFT) was one of them. Here is what the fund said:
“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.”
2. Facebook, Inc. (NASDAQ:FB)
Number of Hedge Fund Holders: 266
Facebook, Inc. (NASDAQ:FB) is a multinational social networking services company based in Menlo Park, California. The tech titan has a market capitalization of $928.22 billion and is ranked second on the list of the 10 safest stocks to buy now.
At the end of the second quarter of 2021, 266 hedge funds in the database of Insider Monkey held stakes worth $42 billion in Facebook, Inc. (NASDAQ:FB), compared to 257 in the previous quarter’s worth $40 billion.
According to its earnings report for the second quarter of 2021, Facebook, Inc. (NASDAQ:FB) had an EPS of $3.61, beating the estimated EPS by $0.58. Facebook, Inc. (NASDAQ:FB) also reported revenues amounting to $29.08 billion, surpassing market predictions by $1.19 billion.
On September 30, RBC Capital analyst Brad Erickson initiated coverage of Facebook, Inc. (NASDAQ:FB) with an Outperform rating alongside a $425 price target on the company’s shares.
First Eagle Investment Management, an investment management firm, In its Q2 2021 investor letter stated that Facebook, Inc. (NASDAQ:FB) was among the leading contributors in the fund’s portfolio for the quarter. Here is what the fund said:
“Leading contributors in the First Eagle Global Fund this quarter included Facebook, Inc. Class A. Facebook has continued to post impressive results for both revenue and active users of its traditional platforms. In the meantime, the social media giant continues to make progress on new initiatives—like Facebook Horizon (virtual reality) and Facebook Shops (e-commerce)—and maintains attractive monetization optionality around services like Messenger and WhatsApp.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 271
Amazon.com, Inc. (NASDAQ:AMZN) is a multinational company that specializes in e-commerce, cloud computing, digital streaming and artificial intelligence. The e-commerce corporation is ranked first on the list of the 10 safest stocks to buy now.
There were 271 hedge funds in the database of Insider Monkey that held stakes in Amazon.com, Inc. (NASDAQ:AMZN) worth $60.49 billion in the second quarter of 2021, compared to 243 funds in the first quarter with total stakes amounting to approximately $50.4 billion.
On September 30, RBC Capital analyst Brad Erickson initiated coverage of Amazon.com, Inc. (NASDAQ:AMZN) with an Outperform rating and $4,150 price target.
In the Q2 2021 investor letter of L1 Capital, the fund announced Amazon.com, Inc. (NASDAQ:AMZN) as one of its leading contributors. Here is what the fund said:
“Amazon flipped from being the largest detractor from portfolio performance in the March 2021 quarter, to one of the leading contributors in the June 2021 quarter. We took advantage of negative near-term sentiment in the March 2021 quarter to add to our Amazon investment. We continue to view Amazon as one of the best positioned businesses globally, with its share price still not reflecting fair value.”
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Disclosure. None. 10 Safest Stocks To Buy Now is originally published on Insider Monkey.
