In this article, we will be taking a look at the 13 best stocks to buy and hold according to Bill Gates’ Portfolio. To skip our detailed analysis of Bill Gates’ stock portfolio, you can go directly to see the 5 Best Stocks to Buy and Hold According to Bill Gates’ Portfolio.
Gates Foundation’s Largest Annual Budget Ever
This January, the Bill & Melinda Gates Foundation Trust, in its 2024 annual letter, announced an $8.6 billion annual budget for the year, the largest set by the Foundation to date. The budget is stated to be set aside to meet the Foundation’s goal to “save and improve” millions of lives by 2030. Bill Gates has long been an admirable philanthropist alongside being an innovator in the technology sector. Yet, this move signifies an extraordinary commitment to meeting the greatest and most urgent human needs worldwide. The annual letter noted that the Gates Foundation measures its impact in the field of philanthropy in terms of “lives saved and livelihood improved,” a measurement that has now culminated in the multi-billion dollar budget being decided.
Not long after the Foundation’s announcement, Gates met with CNN’s Fareed Zakaria at the World Economic Forum to discuss his commitment to ensuring the world’s poorest are helped. An interesting facet of his discussion was the focus on artificial intelligence (AI) in this endeavor. To begin with, Gates noted that AI may not be perfect at present, but its progress and development are continuing at quite a dramatic pace. He further stated that if AI were to be inculcated in the medical and education sectors, the results would be fantastic, particularly with regard to narrowing the gap in the provision of vital services in these sectors in less developed countries versus developed ones.
Diversification in Gates’ Stock Portfolio
Considering Gates’ immense support for AI and its projected benefits, it is unsurprising that Microsoft Corporation (NASDAQ:MSFT) is one of the leading companies in this space at present, not just from a profitability viewpoint but also in terms of the benefits that can be derived from this technology in areas such as education. However, a look at Bill Gates’ stock portfolio shows that the billionaire philanthropist isn’t just a tech investor. His latest holdings show large stakes in Berkshire Hathaway Inc. (NYSE:BRK.A) and Canadian National Railway Company (NYSE:CNI), for instance, highlighting the portfolio’s diversification. Over the past year, Gates’ top holdings have remained largely the same, which also shows a consistent portfolio management approach headed by Michael Larson.
Bill Gates’ stock portfolio is worth over $42 billion at present, with a large portion of the portfolio consisting of technology stocks, followed closely by industrial goods stocks, financial stocks, and services stocks. Considering that these are the areas consistently held by the Foundation Trust, which has a history of positive performance both financially and philanthropically, investors may be well-served by following current developments in these areas in order to buy into them. This year, technology has remained a top performer in the US equity markets at any rate, making this area a top investment opportunity that must be considered. But as we have mentioned, Bill Gates’ stock portfolio is not limited to merely one sector. To provide more details on the types of companies the Foundation Trust is investing in, we have compiled a list of the best stocks to buy and hold according to Bill Gates’ stock portfolio. These include several of Gates’ preferred dividend stocks alongside Gates’ stock picks with huge upside potential.
Our Methodology
For our list of the best stocks to buy and hold in Bill Gates’ stock portfolio, we looked at the holdings of the Bill & Melinda Gates Foundation Trust and picked the top 13 holdings. We ranked the stocks based on the Trust’s stake value in them as of the fourth quarter, from the lowest to the highest figure. We also mentioned the number of hedge funds holding stakes in each stock by consulting Insider Monkey’s hedge fund data for the fourth quarter. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by over 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
Best Stocks to Buy and Hold According to Bill Gates’ Portfolio
13. Crown Castle International Corp. (NYSE:CCI)
Number of Hedge Fund Holders: 45
Bill Gates’ Stake: $163.6 million
Crown Castle International Corp. (NYSE:CCI) is a telecom tower real estate investment trust based in Houston, Texas. The company operates and leases more than 40,000 cell towers across major US markets.
On February 21, RBC Capital analysts maintained a Sector Perform rating and $109 price target on Crown Castle International Corp. (NYSE:CCI).
There were 45 hedge funds long Crown Castle International Corp. (NYSE:CCI) in the fourth quarter, with a total stake value of $1.6 billion.
Like Microsoft Corporation (NASDAQ:MSFT), Berkshire Hathaway Inc. (NYSE:BRK.A), and Canadian National Railway Company (NYSE:CNI), Crown Castle International Corp. (NYSE:CCI) is among the best stocks in Bill Gates’ stock portfolio.
12. Schrödinger, Inc. (NASDAQ:SDGR)
Number of Hedge Fund Holders: 20
Bill Gates’ Stake: $249.9 million
A Buy rating and $39 price target were maintained on Schrödinger, Inc. (NASDAQ:SDGR) on March 1 by Citigroup analysts.
Schrödinger, Inc. (NASDAQ:SDGR) is a healthcare technology company that develops a physics-based computational platform, enabling the discovery of novel molecules for drug development and materials applications. It is based in New York.
We saw 20 hedge funds long Schrödinger, Inc. (NASDAQ:SDGR) in the fourth quarter, with a total stake value of $437.7 million.
At the end of the fourth quarter, Bill & Melinda Gates Foundation Trust was the largest shareholder in Schrödinger, Inc. (NASDAQ:SDGR), holding 6.9 million shares in the company.
11. Waste Connections, Inc. (NYSE:WCN)
Number of Hedge Fund Holders: 45
Bill Gates’ Stake: 320.8 million
Waste Connections, Inc. (NYSE:WCN) was spotted in the portfolios of 45 hedge funds in the fourth quarter, with a total stake value of $1.5 billion.
Based in Woodbridge, Canada, Waste Connections, Inc. (NYSE:WCN) is an environmental and facilities services company on our list of the best stocks in Bill Gates’ stock portfolio. It provides non-hazardous waste collection, transfer, disposal, and resource recovery services in the US and Canada.
Jefferies analysts hold a Buy rating and $217 price target on Waste Connections, Inc. (NYSE:WCN) as of March 18.
TimesSquare Capital Management mentioned Waste Connections, Inc. (NYSE:WCN) in its third-quarter 2023 investor letter:
“Waste Connections, Inc. (NYSE:WCN), a non-hazardous waste company, pulled back by -6%. They serve residential, commercial, municipal, and industrial customers in the U.S. and Canada. Second quarter results included inline revenues, an upside to profits on better margins, though with slightly lower volumes. Management noted that volumes came in weaker than anticipated due to intentionally shedding low margin contracts. Forward revenue guidance was lowered slightly, reflecting lower surcharges from falling diesel prices.”
10. FedEx Corporation (NYSE:FDX)
Number of Hedge Fund Holders: 70
Bill Gates’ Stake: $388.1 million
FedEx Corporation (NYSE:FDX) is an air freight and logistics services company based in Memphis, Tennessee. The company offers transportation, e-commerce, and business services.
Our hedge fund data for the fourth quarter shows 70 hedge funds long FedEx Corporation (NYSE:FDX), with a total stake value of $2.3 billion.
As of March 22, UBS analysts hold a Buy rating and $340 price target on FedEx Corporation (NYSE:FDX).
Artisan Partners said the following about FedEx Corporation (NYSE:FDX) in its fourth-quarter 2023 investor letter:
“Other Q4 laggards were global reinsurer Arch Capital and shipping company FedEx Corporation (NYSE:FDX)—holdings that pulled back following large gains. Back in September 2022, FedEx was selling for less than 8X our estimate of normalized earnings due to substantial pessimism. Although the demand environment remains challenging globally, particularly in the Express segment, the company is delivering solid earnings growth driven by cost savings initiatives. FedEx’s DRIVE program, which seeks to deliver $4 billion in permanent cost reductions by creating an integrated air-ground network similar to that of rival UPS, is showing progress, and workforce reductions have also been enacted. While operating results can be choppy, FedEx’s longer term business economics are highly favorable given the global shipping industry’s consolidated structure and massive barriers to entry that afford operators with pricing power to counter cost inflation and earn respectable returns on capital over the business cycle.”
9. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 85
Bill Gates’ Stake: $477.7 million
Fisher Asset Management was the most prominent shareholder in Walmart Inc. (NYSE:WMT) at the end of the fourth quarter, holding 28.6 million shares in the company.
Walmart Inc. (NYSE:WMT) is a consumer staples merchandise retail company based in Bentonville, Arizona. It operates retail and wholesale units alongside engaging in e-commerce.
On March 13, Tigress Financial analysts maintained a $75 price target and Buy rating on Walmart Inc. (NYSE:WMT).
In total, 85 hedge funds were long Walmart Inc. (NYSE:WMT) in the fourth quarter, with a total stake value of $6.2 billion.
8. Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF)
Number of Hedge Fund Holders: 10
Bill Gates’ Stake: $588.2 million
Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) is a soft drinks and non-alcoholic beverages provider based in Mexico. It is a franchise bottler that produces, markets, sells, and distributes Coca-Cola trademark beverages and is among the best stocks in Bill Gates’ stock portfolio.
Bill & Melinda Gates Foundation Trust was the largest shareholder in Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) at the end of the fourth quarter, holding 6.2 million shares in the company.
JPMorgan analysts upgraded Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) from Neutral to Overweight on February 2.
Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) was seen in the 13F holdings of 10 hedge funds in the fourth quarter, with a total stake value of $728.2 million.
Harding Loevner said this about Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) in its fourth-quarter 2023 investor letter:
“The Consumer Staples sector delivered the strongest relative performance, with cosmetics producer L’Oréal and Coke bottler and convenience store operator Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) especially strong. FEMSA rallied after announcing a strategic review, which will refocus the company on its strongest businesses and divest non-core assets, punctuated by cutting its large stake in Heineken.
In terms of geographical performance, the eurozone emerged as the top-performing region, and our stocks did better still, fueled by the strong performance of Infineon, L’Oréal, and Schneider Electric. EMs, which lagged the index, were boosted by the improving outlook for semiconductor companies TSMC and Samsung. Mexico’s FEMSA also contributed strongly to relative returns.”
7. Ecolab Inc. (NYSE:ECL)
Number of Hedge Fund Holders: 47
Bill Gates’ Stake: $1.03 billion
At the end of the fourth quarter, 47 hedge funds were long Ecolab Inc. (NYSE:ECL), with a total stake value of $2.4 billion.
An Outperform rating and a $238 price target were reiterated on Ecolab Inc. (NYSE:ECL) on March 12 by RBC Capital analysts.
Ecolab Inc. (NYSE:ECL) is a specialty chemicals company based in Saint Paul, Minnesota. It provides water, hygiene, and infection prevention solutions and services.
Mairs & Power mentioned Ecolab Inc. (NYSE:ECL) in its fourth-quarter 2023 investor letter:
“All of our Materials holdings—Ecolab Inc. (NYSE:ECL), HB Fuller (FUL), and Sherwin Williams (SHW)—also posted strong results in 2023, a stark reversal from the prior year. After oil prices spiked above $100 in 2022 due to the Ukraine-Russia Conflict, oil has since pulled back to the low $70s. Oil and its by-products are major inputs for all of our Materials holdings; as such, lower oil prices have led to a rebound in profits. For example, our largest Materials holding—Ecolab—is expected to increase earnings more than 15% this year after declining 5% last year.”
6. Deere & Company (NYSE:DE)
Number of Hedge Fund Holders: 54
Bill Gates’ Stake: $1.4 billion
Truist Securities analysts initiated coverage on Deere & Company (NYSE:DE) with a Buy rating and $494 price target on March 14.
Deere & Company (NYSE:DE) had 54 hedge funds long its stock in the fourth quarter, with a total stake value of $4.4 billion.
Based in Moline, Illinois, Deere & Company (NYSE:DE) is an agricultural and farm machinery company. It manufactures and distributes various agricultural equipment such as tractors, combines, and cotton pickers and strippers.
Like Microsoft Corporation (NASDAQ:MSFT), Berkshire Hathaway Inc. (NYSE:BRK.A), and Canadian National Railway Company (NYSE:CNI), Deere & Company (NYSE:DE) is among the top stocks in Bill Gates’ stock portfolio.
Click to continue reading and see the 5 Best Stocks to Buy and Hold According to Bill Gates’ Portfolio.
Suggested articles:
- Bill Gates’ 16 Dividend Stocks To Buy
- Warren Buffett 2024 Portfolio: Top 12 Stock Picks
- Michael Burry’s 2024 Portfolio: 12 New Stock Picks
Disclosure: None. 13 Best Stocks to Buy and Hold According to Bill Gates’ Portfolio is originally published on Insider Monkey
Hedge Fund Resource Center