10 Stocks to Buy According to BlueSpruce Investments

Published June 23, 2022 at 9:49 am EDT Updated August 19, 2026 at 8:02 am EDT

In this article, we discuss 10 stocks to buy according to BlueSpruce Investments.

BlueSpruce Investments is a Chicago-based investment business that manages around $4.5 billion in assets. It employs a detailed fundamental research process to develop a focused portfolio that it preserves for the long term, similar to a private equity strategy. It aims to hold 10 to 15 business names, with long and short stock positions and high-yield bonds and senior loans as prospective investments. It invests in businesses that provide communications, finance, consumer discretionary, and information technology.

Tim Hurd and Edward Magnus, who formerly worked together at Madison Dearborn Partners, established BlueSpruce Investments in February 2013.

BlueSpruce Investments’ portfolio had 14 long positions and a value of $6.17 billion at the end of the first quarter of 2022, with a 90.11% concentration of the top 10 holdings.

The most notable stocks held by BlueSpruce Investments in Q1 2022 include The TJX Companies, Inc. (NYSE:TJX), Automatic Data Processing, Inc. (NASDAQ:ADP), and VeriSign, Inc. (NASDAQ:VRSN).

10 Stocks to Buy According to BlueSpruce Investments

Photo by Executium on Unsplash

Our Methodology

We used the Q1 portfolio of BlueSpruce Investments for this article.

Stocks to Buy According to BlueSpruce Investments

10. Dollar General Corporation (NYSE:DG)

BlueSpruce Investments’ Stake Value: $223,528,000

Percentage of BlueSpruce Investments’ Portfolio: 3.62%

Number of Hedge Fund Holders: 53

Dollar General Corporation (NYSE:DG) is a retailer that operates retail locations. Dollar General Corporation was raised to Overweight from Equal Weight by Morgan Stanley analyst Simeon Gutman on June 16, with a price objective of $250, up from $225.

Insider Monkey’s data shows that 53 elite hedge funds held stakes in Dollar General Corporation at the end of the first quarter, up from 44 funds a quarter earlier. The collective value of these stakes is over $2.25 billion, showing considerable growth from $2.20 billion worth of stakes held by hedge funds in Q4 2021.

In the fourth quarter of 2021, BlueSpruce Investments held about 1 million shares of Dollar General Corporation, worth $223.53 million, representing 3.62% of the hedge fund’s total 13F securities. The hedge fund reduced its stake in Dollar General Corporation by 63% in Q1 2022. BlueSpruce Investments started building its position in Dollar General Corporation in the third quarter of 2020.

Along with Dollar General Corporation, The TJX Companies, Inc., Automatic Data Processing, Inc. and VeriSign, Inc. are also some of the stocks to buy according to BlueSpruce Investments.

William B. Gray’s Orbis Investment Management held a notable stake in Dollar General Corporation at the end of the first quarter of 2022, worth $519.28 million. Dollar General Corporation shares have offered investors 10% in returns over the past year as of June 16.

LRT Capital Management mentioned Dollar General Corporation in its Q3 2021 investor letter. Here is what the firm said:

“Executive Summary

At LRT Capital Management we are continuously searching the market for great investment opportunities. Our favorite finds are companies with moats and growth opportunities that justify a higher price than what the stock is trading for. One of our holdings (approximately 1.5% of our long exposure) is Dollar General (DG), so today, we wanted to tell you a bit about this great company.…” (Click here to read the full text)

9. Ross Stores, Inc. (NASDAQ:ROST)

BlueSpruce Investments’ Stake Value: $345,553,000

Percentage of BlueSpruce Investments’ Portfolio: 5.6%

Number of Hedge Fund Holders: 44

Ross Stores, Inc. (NASDAQ:ROST) owns and operates off-price retail clothing and home accessory stores. BlueSpruce Investments initiated a new stake in Ross Stores, Inc. in the first quarter of 2022, buying 3.82 million shares of the apparel retail company, valued at $345.55 million.

On May 23, Barclays analyst Adrienne Yih kept an Overweight rating on Ross Stores, Inc. but cut her price objective for Ross Stores to $85 from $119. In a research note, Yih stated that the company had a poor first quarter, underperforming sales, margins, and profitability targets.

8. PayPal Holdings, Inc. (NASDAQ:PYPL)

BlueSpruce Investments’ Stake Value: $403,532,000

Percentage of BlueSpruce Investments’ Portfolio: 6.54%

Number of Hedge Fund Holders: 100

As of the end of the first quarter of 2022, 100 hedge funds in Insider Monkey’s database of 912 funds held stakes in PayPal Holdings, Inc. (NASDAQ:PYPL) compared to 110 funds in the previous quarter.

During Q1 2022, BlueSpruce Investments bought additional 564,642 shares in PayPal Holdings, Inc. and held a collective stake worth over $403.53 million. Ken Fisher’s Fisher Asset Management is PayPal Holdings, Inc.’s most significant stakeholder, with 16.78 million shares worth $1.94 billion.

Baron Funds, in its first-quarter 2022 investor letter, mentioned PayPal Holdings, Inc.. Here is what the fund said:

“PayPal Holdings, Inc. enables digital payments for consumers and merchants worldwide. Shares fell on disappointing 2022 guidance that called for 15% to 17% revenue growth but flat EPS growth due to higher credit costs and a higher tax rate. Management also tempered user growth expectations due to a strategic shift toward improving engagement of existing users and away from less-productive new user acquisition. Despite reduced earnings expectations, we believe the share price decline is overdone given PayPal’s growth opportunities and competitive advantages. We reduced PayPal Holdings, Inc.as it became clear that strong growth trends during the early part of the pandemic were not persisting in a more normal environment.”

7. GoDaddy Inc. (NYSE:GDDY)

BlueSpruce Investments’ Stake Value: $412,108,000

Percentage of BlueSpruce Investments’ Portfolio: 6.68%

Number of Hedge Fund Holders: 43

GoDaddy Inc. (NYSE:GDDY) is a company that specializes in domain name registration and web hosting. In addition, it offers website creation, hosting, and security services. Insider Monkey hedge fund database reveals that in the fourth quarter of 2021, 41 hedge funds were bullish on Charter Communications, Inc. (NASDAQ:CHTR). In the first quarter of 2022, the number rose to 43 hedge funds.

Brent Thill of Jefferies maintained a Buy recommendation on GoDaddy Inc. but dropped his price objective to $100 from $110 on May 31.

According to the 13F filings for the first quarter of 2022, BlueSpruce Investments held over 4.92 million shares of GoDaddy Inc., amounting to more than $412.11 million in worth. GoDaddy Inc. was the fifth-largest holding of the hedge fund and represented 6.68% of its 13F portfolio.

6. Charter Communications, Inc. (NASDAQ:CHTR)

BlueSpruce Investments’ Stake Value: $473,042,000

Percentage of BlueSpruce Investments’ Portfolio: 7.67%

Number of Hedge Fund Holders: 73

Charter Communications, Inc. is a company that provides high-speed internet access. BlueSpruce Investments owns a position worth $473.04 million in Charter Communications, Inc., representing 7.67% of the fund’s Q1 portfolio. The hedge fund trimmed its stake in the firm by 20% in the first quarter of 2022.

On June 2, Wolfe Research analyst Peter Supino retained his Underperform rating on Charter Communications, Inc. while lowering his price objective to $515 from $582. The analyst projected unrelenting pressure on subscriber acquisition expenses and price as more vendors competed for the same clients.

73 out of the 912 hedge funds held stakes in Charter Communications, Inc. in the first quarter of 2022, worth $8.52 billion, compared to the same number of funds in the preceding quarter, holding stakes in Charter Communications, Inc. equaling $16.59 billion. Harris Associates held the most prominent stake in Charter Communications, Inc., with 4.13 million shares worth $2.25 billion.

In addition to The TJX Companies, Inc., Automatic Data Processing, Inc., and VeriSign, Inc., Charter Communications, Inc. is one of the stocks in the Q1 portfolio of BlueSpruce Investments.

ClearBridge Investments discussed Charter Communications, Inc. in its investor letter of Q1, 2021, and here is what they had to say:

“We also added to Charter Communications, a historically strong performer that has faced headwinds recently due to a deceleration in broadband subscriber growth following a period of robust results during the pandemic.”

5. Visa Inc. (NYSE:V)

BlueSpruce Investments’ Stake Value: $599,415,000
Percentage of BlueSpruce Investments’ Portfolio: 9.72%
Number of Hedge Fund Holders: 159

Visa Inc. (NYSE:V) is one of BlueSpruce Investments’ favorite stocks. In the first quarter of 2022, the fund increased its hold in the company by 89% to 2.70 million shares worth $599.42 million. Visa Inc. has featured on BlueSpruce Investments’ portfolio since the fourth quarter of 2016.

At the end of Q1 2022, 159 hedge funds tracked by Insider Monkey were bullish on Visa Inc., up from 142 in the quarter earlier. The collective value of these stakes is over $28.08 billion. Will Nance of Goldman Sachs initiated coverage of Visa Inc. on May 17, assigning a Buy rating and a $282 price target, representing a 43% upside.

Baron Funds mentioned Visa Inc. in its Q1, 2022 investor letter. Here is what the firm has to say:

“Shares of global payment network Visa, Inc. were up 2.5% on strong quarterly results with 24% revenue growth and 27% EPS growth. Payment volume grew 20% with notable strength in cross-border volumes as travel activity rebounded from depressed levels. Management raised full-year guidance to reflect high-teens revenue growth. Shares also likely benefited from a “flight to safety” during a volatile quarter for equities. We continue to own the stock due to Visa’s long runway for growth underpinned by the continued migration from cash transactions to card/digital and strong competitive advantages, operating in a duopoly with Mastercard.”

4. Alphabet Inc. (NASDAQ:GOOG)

BlueSpruce Investments’ Stake Value: $639,744,000
Percentage of BlueSpruce Investments’ Portfolio: 10.37%
Number of Hedge Fund Holders: 160

On June 2, Piper Sandler analyst Thomas Champion reiterated an Overweight rating on Alphabet Inc. (NASDAQ:GOOG) but reduced his price objective to $2,775 from $2,900. Champion reduced forecasts across the board in the internet business.

At the end of March 2022, 160 hedge funds tracked by Insider Monkey were bullish on Alphabet Inc., up from 158 in the previous quarter. These stakes hold a collective value of roughly $29.68 billion.

The stock is a new arrival in BlueSpruce Investments’ portfolio, as it bought about 230,012 shares of Alphabet Inc., worth $639.74 million. This represented 10.37% of the investment portfolio of the hedge fund.

Here is what Baron Funds had to say about Alphabet Inc. in its first-quarter 2022 investor letter:

“We have modestly reduced the size of our position in Alphabet Inc. (from 6.5% at the end of the fourth quarter of 2021 to 5.3% as of the end of the first quarter of 2022), after the stock rallied 64% in 2021 and continued outperforming during the first quarter, declining just 3%.”

3. Microsoft Corporation (NASDAQ:MSFT)

BlueSpruce Investments’ Stake Value: $700,653,000
Percentage of BlueSpruce Investments’ Portfolio: 11.36%
Number of Hedge Fund Holders: 259

After adjusting expectations lower to reflect the company’s new outlook given further foreign exchange headwinds, Jefferies analyst Brent Thill reiterated a Buy rating on Microsoft (NASDAQ:MSFT) and trimmed his price objective to $320 from $325 on June 13.

Microsoft Corporation experienced a decline in hedge fund interest in Q1 2022, as 259 hedge funds tracked by Insider Monkey reported owning stakes in the company at the end of the period, down from 262 in the preceding quarter. The aggregate value of stakes held by 259 hedge funds stood at over $65.64 billion.

BlueSpruce Investments started building its position in Microsoft Corporation during the first quarter of 2020, buying shares worth over $258.95 million. The hedge fund increased its stakes in the company by 30%, owning shares worth roughly $700.65 million at the end of Q1 2022. The company represented 11.36% of the hedge fund’s 13F portfolio.

Here is what Baron Opportunity Fund has to say about Microsoft Corporation in its Q1 2022 investor letter:

“Shares of mega-cap software company Microsoft Corporation pulled back with the broader software sector. The company posted another solid quarter, highlighted by total revenues increasing 20% and Microsoft Cloud revenues, now 45% of total revenues, growing 32%. These results were driven, in large part, by strong demand for large Azure contracts. We believe Microsoft can compound revenue in the low double digits for the next three years, underpinned by its expansion in its total addressable market and market share gains.”

2. Fiserv, Inc. (NASDAQ:FISV)

BlueSpruce Investments’ Stake Value: $816,964,000
Percentage of BlueSpruce Investments’ Portfolio: 13.25%
Number of Hedge Fund Holders: 58

Fiserv, Inc. (NASDAQ:FISV) is a company that specializes in financial technology. Ivan Feinseth, a Tigress Financial analyst, boosted his price objective on Fiserv, Inc. to $152 from $150 on May 27 and reaffirmed his Buy rating on the stock.

BlueSpruce Investments initiated its position in Fiserv, Inc. during the fourth quarter of 2019, purchasing shares worth over $221.72 million. At the end of Q1 2022, the hedge fund held stakes valued at $816.96 million in the company. Fiserv, Inc. represented 13.25% of the hedge fund’s 13F portfolio.

ClearBridge Investments mentioned Fiserv, Inc. in its Q4 2021 investor letter. Here is what the fund said:

“While the threat of disruption risk to these established payment companies should not be taken lightly, it is important to note that many of these emerging disruptors are small relative to the massive global payments network and heavily reliant on the very payment infrastructure they are trying to disrupt. This led us to initiate a position in Fiserv, whose stock dropped to a level that embedded projections for negative long-term growth despite no current evidence of disruption. We think Fiserv will continue to grow despite perceived disruption risks given its scale and efficiency. Fiserv also owns cloud-based payments hardware and software system Clover, which is both bigger and faster growing than Square; this provides an additional degree of protection against further disruption risk.

1. Mastercard Incorporated (NYSE:MA)

BlueSpruce Investments’ Stake Value: $940,801,000
Percentage of BlueSpruce Investments’ Portfolio: 15.25%
Number of Hedge Fund Holders: 136

Will Nance of Goldman Sachs initiated coverage of Mastercard Incorporated (NYSE:MA) on May 17, assigning a Buy rating and a price objective of $460, implying a 38% uptrend. As per Insider Monkey’s Q1 2022 database, 136 hedge funds held stakes in Mastercard Incorporated, down from 144 in the previous quarter. These stakes hold a collective value of over $15.44 billion.

At the end of Q1 2022, BlueSpruce Investments held stakes worth over $940.80 million in Mastercard Incorporated, purchasing additional 332,317 shares during the quarter. As a result, the company represented an impressive 15.25% of the hedge fund’s portfolio and topped the list of 10 stocks to buy according to BlueSpruce Investments.

Polen Capital, an investment management firm, in the first quarter of 2022 investor letter, mentioned Mastercard Incorporated. Here is what the fund said:

“We added to both Visa and Mastercard during the final quarters of 2021, based on the belief that both businesses were trading at attractive prices and poised to deliver, double-digit returns over the next three to five years. Cross-border transactions–a highly profitable business segment for both companies–represent roughly 10% of Visa and Mastercard’s volumes and 25% of their gross revenues, so lockdowns have severely impacted this segment due to stifled travel. While it was impossible to know when people would begin traveling again, we accepted this reality with the belief that travel would eventually return. Both companies have commented that as soon as a country or geography reopens, cross-border volumes reignite, amplifying each business’s growth and profitability. We think these near- term headwinds have created an attractive long-term investment opportunity.”

You can also take a peek at 10 Stocks to Buy According to Kevin McCarthy’s Breakline Capital and 10 Stocks to Buy According to Matthew Hulsizer’s PEAK6 Capital Management

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