In this article, we discuss 14 best stocks to buy before the 2023 recession.

Investment advisory Barclays forecasts that 2023 will be one of the worst years for the global economy in forty years. Ned Davis Research put the chances of a crushing global downturn at 65%. Similarly, Fidelity International thinks a hard landing seems inevitable. As the Federal Reserve sticks with its most aggressive fiscal policy in decades, Wall Street consensus is that a mild recession will strike globally even if inflation has peaked.

Market experts think there is a 7-in-10 probability that the US economy will slip into a recession in 2023, and they are trimming demand expectations and slashing inflation forecasts in light of tremendous interest rate hikes by the Federal Reserve. The median estimates suggest that gross domestic product will average a meagre 0.3% in 2023, including an annualized 0.7% drop in the second quarter and flat data in the first and third quarters. Consumer spending, which accounts for about two-thirds of the GDP, is expected to grow just barely in the middle half of 2023.

Bill Adams, chief economist at Comerica Bank, told Bloomberg on December 20: 

“The US economy is facing big headwinds from surging interest rates, high inflation, the end of fiscal stimulus, and weak export markets abroad. Businesses have turned cautious about adding to inventories and hiring, and will likely delay construction and other capex plans with credit more expensive and order books shrinking.”

During periods of recession and general market volatility, individuals tend to pile into defensive assets like gold (see 13 Best Gold Stocks To Buy For Recession). Similarly, investors prefer to solidify their portfolios with recession-proof equities (see 10 Best Recession Proof Stocks To Invest In). Some of the best recession stocks to buy for 2023 include Costco Wholesale Corporation (NASDAQ:COST), Bank of America Corporation (NYSE:BAC), and UnitedHealth Group Incorporated (NYSE:UNH). 

Our Methodology 

We scanned Insider Monkey’s database of 920 hedge funds and picked the top 14 stocks that are recession proof. These stocks belong to defensive sectors like alcohol, consumer staples, healthcare, and finance. Many of these companies have solid dividend histories and enjoy a stable market position. The list is arranged according to the number of hedge fund holders in each firm. 

Best Stocks To Buy Before the 2023 Recession

14. Diageo plc (NYSE:DEO)

Number of Hedge Fund Holders: 20

Diageo plc (NYSE:DEO) is a London-based company that produces, markets, and sells alcoholic beverages under the Johnnie Walker, Guinness, Tanqueray, Baileys, Smirnoff, Captain Morgan, Crown Royal, Don Julio, Ciroc, Buchanan’s, Casamigos, J&B, and Ketel One brands. Alcohol demand surges during recessions, making Diageo plc (NYSE:DEO) one of the best stocks to buy before a recession hits in 2023. Consumer demand for Diageo products remains resilient worldwide. Although earnings had been fluctuant in the past, they always rebounded well, and will potentially be solid in the coming economic downturn.

On January 4, Credit Suisse analyst Sanjeet Aujla raised the price target on Diageo plc (NYSE:DEO) to 4,500 GBp from 4,400 GBp and maintained an Outperform rating on the shares.

According to Insider Monkey’s third quarter database, 20 hedge funds held stakes worth $527.4 million in Diageo plc (NYSE:DEO), compared to 22 funds in the prior quarter worth $887.3 million. Tom Gayner’s Markel Gayner Asset Management is the biggest position holder in the company, with 1.35 million shares worth $229.2 million. 

Like Costco Wholesale Corporation (NASDAQ:COST), Bank of America Corporation (NYSE:BAC), and UnitedHealth Group Incorporated (NYSE:UNH), Diageo plc (NYSE:DEO) is one of the best recession stocks to invest in. 

Here is what ClearBridge Aggressive Growth Strategy has to say about Diageo plc (NYSE:DEO) in its Q2 2022 investor letter:

“Diageo is a leading global distiller and brewer which addresses the large ($500 billion-plus) and fragmented market for spirits. With its portfolio of premium products, we see Diageo as a steady compounder poised for sustained, above industry growth. The company’s margins remain below pre-COVID levels in a number of geographies and should continue to recover as channels reopen, though we also see opportunities for consistent margin expansion beyond this period of rebound. The spirits category is not immune to weaker consumer spending nor inflation; however the majority of Diageo’s profits are from the U.S. market, which has historically been more resilient. Additionally, the company has a number of margin levers to help combat rising input costs.”

13. Church & Dwight Co., Inc. (NYSE:CHD)

Number of Hedge Fund Holders: 40

Church & Dwight Co., Inc. (NYSE:CHD) is a New Jersey-based company that develops, manufactures, and markets household, personal care, and specialty products. It operates through three segments – Consumer Domestic, Consumer International, and Specialty Products Division. Church & Dwight Co., Inc. (NYSE:CHD) is one of the best recession-proof stocks to invest in this year. The company has a history of 27 years of consecutive dividend increases, making it a reliable income stock to pick up for the volatile market environment. 

On December 6, Deutsche Bank analyst Steve Powers raised the firm’s price target on Church & Dwight Co., Inc. (NYSE:CHD) to $90 from $85 and maintained a Buy rating on the shares. 

According to Insider Monkey’s Q3 data, Church & Dwight Co., Inc. (NYSE:CHD) was part of 40 hedge fund portfolios, compared to 32 in the prior quarter. Terry Smith’s Fundsmith LLP is the biggest stakeholder of the company, with 8.45 million shares worth $604.2 million. 

Renaissance Investment made the following comment about Church & Dwight Co., Inc. (NYSE:CHD) in its Q3 2022 investor letter:

“On the negative side, Church & Dwight Co., Inc. (NYSE:CHD) declined 22.7% after reporting first quarter operating results that were below expectations. The company also lowered guidance on macroeconomic concerns, with management citing softness across their product portfolio, especially for their discretionary categories, as retailers work on reducing inventory levels.”

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

Number of Hedge Fund Holders: 43

Ross Stores, Inc. (NASDAQ:ROST) is a California-based company that sells discount retail apparel and home fashion accessories under the Ross Dress for Less and dd’s DISCOUNTS brand names. It is one of the best stocks to buy for the 2023 recession, as customers tend to gravitate towards off-price stores during difficult times. As of December 19, Ross Stores, Inc. (NASDAQ:ROST) continues to be seen as a retail sector winner amid the holiday season and continuing inflationary headwinds.

On November 21, Barclays analyst Adrienne Yih raised the price target on Ross Stores, Inc. (NASDAQ:ROST) to $127 from $98 and reiterated an Overweight rating on the shares. The company’s Q3 earnings report “was the second proof point that the balance of power has shifted in Off-Price’s favor,” the analyst told investors in a research note.

According to Insider Monkey’s database, 43 hedge funds were bullish on Ross Stores, Inc. (NASDAQ:ROST) at the end of Q3 2022, compared to 46 funds in the prior quarter. Jean-Marie Eveillard’s First Eagle Investment Management is the biggest position holder in the company, with 3.95 million shares worth $333 million. 

Carillon Tower Advisers made the following comment about Ross Stores, Inc. (NASDAQ:ROST) in its Q3 2022 investor letter:

“Ross Stores, Inc. (NASDAQ:ROST) topped the contribution list as this discount clothing and accessories retailer rebounded from oversold conditions after reporting a weak quarter. Ross continues to follow its deep discount strategy, offering consumers bargains on clothing as it executes a “packaway” inventory strategy, scooping up inventory when its buyers perceive bargains in the marketplace, then passing savings on to customers with low-cost retail locations.”

11. O’Reilly Automotive, Inc. (NASDAQ:ORLY)

Number of Hedge Fund Holders: 48

O’Reilly Automotive, Inc. (NASDAQ:ORLY) operates as a retailer and supplier of automotive aftermarket parts, tools, supplies, equipment, and accessories in the United States. For full-year 2022, the company expects revenue to be between $14.1 billion and $14.3 billion, versus a consensus of $14.16 billion and GAAP earnings per share are expected to be in the range of $32.35 to $32.85, compared to the prior view of $31.25 to $31.75 and a consensus of $31.86. During recessions, customers tend to fix their old vehicles instead of purchasing new ones, which skyrockets demand for companies like O’Reilly Automotive, Inc. (NASDAQ:ORLY). 

On January 5, Wells Fargo analyst Zachary Fadem raised the price target on O’Reilly Automotive, Inc. (NASDAQ:ORLY) to $925 from $850 and maintained an Overweight rating on the shares. Despite industry-leading comps and positive share gains, the analyst believes a case can be made that O’Reilly Automotive, Inc. (NASDAQ:ORLY) under-earned in 2022 and in 2023, he sees the benefits of a solid, needs-based category, little evidence of pricing roll back, and potential tailwinds from share gains and improving margins. 

According to Insider Monkey’s third quarter database, 48 hedge funds were bullish on O’Reilly Automotive, Inc. (NASDAQ:ORLY), compared to 41 funds in the last quarter. Charles Akre’s Akre Capital Management is the largest position holder in the company, with 1.47 million shares worth $1 billion. 

Aristotle Atlantic made the following comment about O’Reilly Automotive, Inc. (NASDAQ:ORLY) in its Q3 2022 investor letter:

“O’Reilly Automotive, Inc. (NASDAQ:ORLY) outperformed the Consumer Discretionary sector because its business is expected to be more resilient in an economic downturn. The company’s second quarter earnings were slightly below consensus estimates; however, the outlook for the rest of the year showed steady growth despite difficult comparisons with the second half of 2021. O’Reilly Automotive continues to grow its store base and has recently announced an expansion into Mexico. The company operates in an industry where competition has historically remained rational through the economic cycle.”

10. McDonald’s Corporation (NYSE:MCD)

Number of Hedge Fund Holders: 53

McDonald’s Corporation (NYSE:MCD) is one of the best stocks to buy for the 2023 recession, as demand for cheap food surges during periods of economic volatility and high unemployment. On December 15, McDonald’s Corporation (NYSE:MCD) and five of its suppliers signed a deal to purchase almost 190 megawatts of power from Blue Jay Solar Farm. The ​​solar energy will power all the warehouses, distribution centers, and other elements of McDonald’s Corporation (NYSE:MCD)’s logistical supply chain for its U.S. restaurants. The company aims to reduce greenhouse emissions by 36% by 2030 and become net zero by 2050.

Barclays analyst Jeffrey Bernstein on January 5 raised the price target on McDonald’s Corporation (NYSE:MCD)’s to $310 from $295 and maintained an Overweight rating on the shares. To begin 2023, the analyst expects discretionary restaurants to outperform, with sales strong, pricing outsized, and inflation easing.

According to Insider Monkey’s Q3 data, McDonald’s Corporation (NYSE:MCD) was part of 53 hedge fund portfolios, compared to 50 in the prior quarter. Ray Dalio’s Bridgewater Associates is the largest stakeholder of the company, with more than 2 million shares worth $487.7 million. 

9. The Coca-Cola Company (NYSE:KO)

Number of Hedge Fund Holders: 59

The Coca-Cola Company (NYSE:KO) is one of the best stock picks for a recession-safe portfolio. The Coca-Cola Company (NYSE:KO) will announce its 61st consecutive dividend increase on February 16th, 2023, making it a reliable dividend king to invest in. Income stocks are a good hedge against market volatility, as dividends help a portfolio that suffers from share price losses. The company has increased its exposure to alcoholic beverages over the last two years as well. 

On December 20, Atlantic Equities analyst Edward Lewis said he expects a more challenging backdrop for the global consumer in FY23 as input costs remain high and companies will be looking to raise prices in some cases. In this context, his top names in beverages include The Coca-Cola Company (NYSE:KO), where he sees category momentum, continuous investment, and solid execution driving growth. The analyst has an Overweight rating on The Coca-Cola Company (NYSE:KO) shares with a $69 price target. 

According to Insider Monkey’s data, 59 hedge funds were bullish on The Coca-Cola Company (NYSE:KO) at the end of Q3 2022, compared to 60 funds in the last quarter. Warren Buffett’s Berkshire Hathaway held the largest stake in the company, with 400 million shares worth $22.40 billion. 

In its Q2 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and The Coca-Cola Company (NYSE:KO) was one of them. Here is what the fund said:

“Over the last year, we have repositioned our portfolio to navigate the course we see ahead. We added to more defensive areas of the portfolio like consumer staples (The Coca-Cola Company (NYSE:KO)). While the next month or two will likely prove choppy on account of the Omicron variant, we believe that Omicron, like Delta, represents a speed bump on the way to recovery rather than a true change in course. We see strong economic momentum continuing in 2022 and we expect interest rates to rise. After a decade of remarkably low rates, we would not be surprised if this change in direction is accompanied by some fits and starts in the markets. With our emphasis on pricing power, purposeful sector exposure, valuation discipline, and a strong dividend profile, we believe we are well-positioned for the year ahead.”

8. Abbott Laboratories (NYSE:ABT)

Number of Hedge Fund Holders: 62

Abbott Laboratories (NYSE:ABT) develops, manufactures, and sells healthcare products worldwide. The company operates through four segments – Established Pharmaceutical Products, Diagnostic Products, Nutritional Products, and Medical Devices. Healthcare is a defensive market sector, which means firms like Abbott Laboratories (NYSE:ABT) perform well despite a recession backdrop. 

On December 9, Abbott Laboratories (NYSE:ABT) declared a $0.51 per share quarterly dividend, an 8.5% increase from its prior dividend of $0.47. The dividend is distributable on February 15, 2023 to shareholders of record on January 13. Abbott Laboratories (NYSE:ABT) has offered 396 consecutive quarterly dividends since 1924 and has raised the dividend payouts for 50 consecutive years, making it a solid dividend king. 

Barclays analyst Matt Miksic on January 4 raised the price target on Abbott Laboratories (NYSE:ABT) to $122 from $114 and maintained an Overweight rating on the shares. The macro backdrop remains constrained for medical supplies and devices, but the analyst is “generally constructive” on the sector, seeing improving volume trends, solid labor challenges, and “potentially stabilizing” supply chain and inflationary cost trends. 

According to Insider Monkey’s data, Abbott Laboratories (NYSE:ABT) was part of 62 hedge fund portfolios at the end of the third quarter of 2022, compared to 61 in the preceding quarter. Ken Fisher’s Fisher Asset Management is the largest position holder in the company, with 9.12 million shares worth $883.2 million. 

Here is what Stewart Asset Management has to say about Abbott Laboratories (NYSE:ABT) in its Q3 2022 investor letter:

“We also need to point out one global consequence of the rapid rise in interest rates: an irrepressibly strong dollar. This hurts the reported earnings of U.S. companies who sell their goods and services overseas. Foreign currency earnings translate into fewer dollars and thus lower earnings. Most of the companies in your portfolios gain a notable amount of earnings from their international operations. While the strength or weakness of a currency doesn’t change the quality of a business or its longer-term earnings power, it can change the reported earnings of a company over short periods of time. It is difficult to forecast this effect accurately because many of our companies manufacture where they sell, which to some extent dulls the sharp negative effect of a surging dollar. Abbott (NYSE:ABT), among others, is a good example.”

7. Walmart Inc. (NYSE:WMT)

Number of Hedge Fund Holders: 68

Walmart Inc. (NYSE:WMT) is one of the best stocks for a recession-proof portfolio given its defensive nature. On January 5, Walmart Inc. (NYSE:WMT) announced the success of its drone delivery program in 2022. The company completed more than 6,000 deliveries via drone during the year from its 36 drone delivery hubs across seven states. As of the end of 2022, locations in Arizona, Arkansas, Florida, North Carolina, Texas, Utah, and Virginia provided drone delivery.

Credit Suisse analyst Karen Short on December 19 assumed coverage of Walmart Inc. (NYSE:WMT) with an Outperform rating with a price target of $170, up from $160. Walmart Inc. (NYSE:WMT) has been securing “meaningful” market share since early 2021 and the analyst sees it as “a well-positioned defensive name in an uncertain macro backdrop”. 

According to Insider Monkey’s third quarter database, 68 hedge funds were long Walmart Inc. (NYSE:WMT), compared to 67 funds in the earlier quarter. The collective stakes held by elite hedge funds in Q3 2022 increased to $4 billion from $3.78 billion in Q2 2022. 

In its Q2 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Walmart Inc. (NYSE:WMT) was one of them. Here is what the fund said:

“The pandemic has created challenges for businesses large and small; one major challenge for large essential retailers such as ClearBridge holdings Home Depot, Walmart Inc. (NYSE:WMT) and Costco have been ensuring adequate staffing to meet demand under trying conditions. All three instituted enhanced pay practices during the pandemic, with raises, unplanned bonuses and other benefits helping compensate employees for their efforts in a difficult environment. In September 2020 Walmart raised wages for 165,000 employees, including a number of entry positions to $15 an hour. It followed this in February with a raise for 425,000 workers that moved its average pay above $15 an hour.”

6. The Procter & Gamble Company (NYSE:PG)

Number of Hedge Fund Holders: 69 

The Procter & Gamble Company (NYSE:PG) is an American multinational company that provides branded consumer packaged goods worldwide. It operates through five segments – Beauty, Grooming, Health Care, Fabric & Home Care, and Baby, Feminine & Family Care. The Procter & Gamble Company (NYSE:PG) is a dividend king, with 67 years of consecutive dividend increases under its belt. The consumer staples sector was an obvious winner compared to primary indexes in 2022 as investors turned defensive, picking up stocks like The Procter & Gamble Company (NYSE:PG). 

On December 6, Deutsche Bank analyst Steve Powers raised the firm’s price target on Procter & Gamble to $162 from $156 and kept a Buy rating on the shares.

According to Insider Monkey’s data, 69 hedge funds were bullish on The Procter & Gamble Company (NYSE:PG) at the end of September 2022, compared to 71 funds in the prior quarter. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is a prominent stakeholder of the company, with 5.6 million shares worth $712 million. 

In addition to Costco Wholesale Corporation (NASDAQ:COST), Bank of America Corporation (NYSE:BAC), and UnitedHealth Group Incorporated (NYSE:UNH), The Procter & Gamble Company (NYSE:PG) is one of the premier recession stocks to consider.

5. Costco Wholesale Corporation (NASDAQ:COST)

Number of Hedge Fund Holders: 69

Costco Wholesale Corporation (NASDAQ:COST) operates membership warehouses in the United States, Puerto Rico, Canada, the United Kingdom, Mexico, Japan, Korea, Australia, Spain, France, Iceland, China, and Taiwan. It is one of the best recession stocks to invest in. On January 5, Costco Wholesale Corporation (NASDAQ:COST) reported December sales of $23.80 billion, up 7% from $22.24 billion in the same period last year. The company also posted net sales of $82.16 billion for the 18 weeks ended January 1, 2023, compared to $76.34 billion a year ago.

On December 21, Tigress Financial analyst Ivan Feinseth maintained a Buy rating on Costco Wholesale Corporation (NASDAQ:COST) but trimmed the firm’s price target on the shares to $635 from $678, citing a re-rating of valuation. The analyst, who observed that his updated target reflects a potential total return with dividends of nearly 40% from present levels, sees the recent pullback in Costco Wholesale Corporation (NASDAQ:COST) shares as “a major buying opportunity” given the company’s loyal customer base and solid business model.

According to Insider Monkey’s data, 69 hedge funds were long Costco Wholesale Corporation (NASDAQ:COST) at the end of Q3 2022, compared to 64 funds in the earlier quarter. Ken Fisher’s Fisher Asset Management is the largest stakeholder of the company, with 2.5 million shares worth $1.20 billion. 

Here is what Cooper Investors Global Equities Fund has to say about Costco Wholesale Corporation (NASDAQ:COST) in its Q3 2022 investor letter:

“The US economy continues to run hot – the labor market is extremely tight and a number of executives we spoke to described their challenges in retaining staff and preventing competitors from poaching talent. Industrial companies in particular continue to see record backlogs, with the easing of logistics and supply chain constraints only just starting to have an impact on deliveries and lead times.

In terms of inflationary pressures, the vast majority of our holdings have been able to leverage strong market positions and stakeholder relationships to push pricing through in 2022 such that minimal impact to earnings has occurred. Clearly this is not a lever that can be pulled indefinitely but the more experienced management teams have kept some of their powder dry. Our meeting with management at Costco in Seattle was memorable for several reasons but one was their latent ability to increase member pricing which they have not done in over 5 years (and thus likely to do in 2023)…

…To conclude we’ll return to our meeting with Costco mentioned earlier. The business quality is no secret after decades of incredible execution, but the meeting gave us renewed conviction around Value Latencies in terms of the runway for growth, the focus on enhancing customer value, Costco’s vast buying power (it purchases 30% of the world’s jumbo cashews as one example) and management’s feral focus on the business model and cost discipline.”

4. PepsiCo, Inc. (NASDAQ:PEP)

Number of Hedge Fund Holders: 72

PepsiCo, Inc. (NASDAQ:PEP) is one of the most stable consumer staple stocks to invest in for an upcoming recession environment. On November 17, the company declared a $1.15 per share quarterly dividend, in line with previous. The dividend was distributed on January 6. PepsiCo, Inc. (NASDAQ:PEP) has paid consecutive quarterly cash dividends since 1965, and 2022 marked the company’s 50th consecutive annual dividend increase.

On December 7, Argus analyst John Staszak raised the price target on PepsiCo, Inc. (NASDAQ:PEP) to $206 from $195 and kept a Buy rating on the shares. The company is well-managed, provides a strong brand portfolio, and continues to generate resilient growth amid soft demand for many consumer staples, the analyst told investors in a research note. 

According to Insider Monkey’s data, 72 hedge funds were bullish on PepsiCo, Inc. (NASDAQ:PEP) at the end of Q3 2022, compared to 65 funds in the prior quarter. Terry Smith’s Fundsmith LLP is the largest stakeholder of the company, with 7.14 million shares worth $1.16 billion. 

Here is what Lindsell Train has to say about PepsiCo, Inc. (NYSE:PEP) in its Q3 2022 investor letter:

“At this point, it may help to give a further example of these self-reinforcing moats to illustrate the idea, drawing from the consumer franchises side of our portfolio. In our view, strong consumer brands can similarly exhibit Lindycompatible anti-ageing properties. Consider that the longer a company invests in its brands through advertising and R&D, the stronger and more resonant they may get. When successful, a self-sustaining feedback loop is established, whereby it becomes ever harder to recreate a heritage-rich brand from scratch, raising barriers to entry, and proportionately increasing its likely lifespan. There are plenty of long-lived portfolio franchises I could reference here, but I’ve gone with PepsiCo (NYSE:PEP); partly because we have good time-series stats on it (beware data bias!) but also, as I hope will become evident, because Pepsi over its 129 years has succeeded in creating some wonderfully deep moats.

With Pepsi Cola you get the flagship soft drinks brand, which is both global and generational, but you also get the Frito-Lay salty snacks portfolio assembled alongside it, claiming nearly 40% of the global market. That’s ten-times greater than the nearest competitor and likely higher than the next 65 competitors combined. These are exceptionally strong global bands with market shares to match; the long-term empirical result being Pepsi’s dividend record which over the past 66 years (as far back as we’ve been able to go) has compounded at an annualized rate of 10%. Pepsi is no ‘in at the ground floor’ start-up today, but it wasn’t six decades ago either. Early growth investor Philip Fisher put it well when in 1958 (two years into Pepsi’s current winning streak) he wrote of “companies which in spite of outstanding prospects of major further growth are so financially strong, with roots going so deep into the economic soil, that they qualify under the general classification of ‘institutional stocks’”. PepsiCo fits this description well…” (Click here to see the full text)

3. AbbVie Inc. (NYSE:ABBV)

Number of Hedge Fund Holders: 80 

AbbVie Inc. (NYSE:ABBV) was incorporated in 2012 and is headquartered in North Chicago, Illinois. The company discovers, develops, manufactures, and sells pharmaceuticals worldwide. On January 6, AbbVie Inc. (NYSE:ABBV) signed a collaboration agreement with Immunome, Inc. (NASDAQ:IMNM) to discover up to 10 novel antibody-target pairs for cancer treatments. It is one of the best recession-proof stocks to consider. 

On January 5, Truist analyst Robyn Karnauskas raised the price target on AbbVie Inc. (NYSE:ABBV) to $180 from $160 and kept a Buy rating on the shares. The analyst cited increasing prescription and share growth trends for Skyrizi and Rinvoq, in addition to growth in Botox in the aesthetics mark for the target raise. 

According to Insider Monkey’s data, 80 hedge funds were long AbbVie Inc. (NYSE:ABBV) at the end of Q3 2022, compared to 71 funds in the last quarter. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is a prominent stakeholder of the company, with a position worth $431.60 million. 

Here is what Baron Funds specifically said about AbbVie Inc. (NYSE:ABBV) in its Q3 2022 investor letter:

“AbbVie Inc. (NYSE:ABBV) is a drug developer best known for Humira, an immunosuppressant that is the best selling drug of all time. Given outsized key product risk (patent cliff and generic launches beginning in 2023), AbbVie has broadened its pipeline, highlighted by its Allergan acquisition. Shares fell on results that missed consensus and indications that legacy franchises were outperforming newer product launches, calling into question AbbVie’s long-term strategy. With promising assets in the pipeline and its robust cash flow profile, we believe AbbVie will grow well into the future.”

2. Bank of America Corporation (NYSE:BAC)

Number of Hedge Fund Holders: 97

Bank of America Corporation (NYSE:BAC) is an American multinational investment bank and financial services holding company that caters to individual consumers, small and middle-market businesses, institutional investors, large enterprises, and governments worldwide. Bank of America Corporation (NYSE:BAC) is one of the best stocks to buy for protection against an upcoming recession this year.  

On December 5, Bank of America Corporation (NYSE:BAC) announced that it will redeem all outstanding $6 billion of its 3.004% fixed/floating rate senior notes due 2023 on December 20. Redemption price will be equal to 100% of the principal amount of the notes, plus accrued and unpaid interest at the redemption date. 

Barclays analyst Jason Goldberg on January 3 maintained an Overweight rating on Bank of America Corporation (NYSE:BAC) but lowered the price target on the shares to $48 from $51. The analyst believes 2023 should see net interest margins peak for the large-cap banks, deposit betas rise, loan growth slow, and loan losses increase.

According to Insider Monkey’s data, 97 hedge funds were bullish on Bank of America Corporation (NYSE:BAC) at the end of Q3 2022, compared to 99 funds in the prior quarter. Warren Buffett’s Berkshire Hathaway is the leading position holder in the company, with more than 1 billion shares worth $30.5 billion. 

Ariel Investment made the following comment about Bank of America Corporation (NYSE:BAC) in its Q3 2022 investor letter:

“We initiated three new positions in the quarter. We added leading financial institution Bank of America Corporation (NYSE:BAC) which serves individual consumers, small and middle-market businesses, and large corporations with a full range of banking, investing, asset management, and other financial and risk management products and services. The current company was formed through various mergers including NationsBank, FleetBoston, US Trust, Countrywide Financial, and Merrill Lynch with the legacy commercial bank to form a national banking powerhouse and bulge bracket investment firm. As one of the ‘Big Four’ U.S. banks it enjoys scale driven cost advantages and economies of scale which provide meaningful competitive advantages and potential for strong returns in the largely commoditized banking industry. A survivor of the financial crisis, BAC has emerged with a solid capital base and stands to benefit from a rising interest rate environment.”

1. UnitedHealth Group Incorporated (NYSE:UNH)

Number of Hedge Fund Holders: 110

UnitedHealth Group Incorporated (NYSE:UNH) is an American multinational managed healthcare and insurance company that operates through four segments – UnitedHealthcare, Optum Health, Optum Insight, and Optum Rx. UnitedHealth Group Incorporated (NYSE:UNH) is one of the best stocks to buy for a recession portfolio. The company announced guidance for 2023, with revenue forecasted to be between $357 billion to $360 billion. The consensus revenue estimate is $352.95 billion. 

On December 7, Credit Suisse analyst A.J. Rice raised the price target on UnitedHealth Group Incorporated (NYSE:UNH) to $610 from $590 as he made no changes to his EPS estimates but rolled forward his valuation to 2024. The analyst kept an Outperform rating on the stock.

According to Insider Monkey’s third quarter database, 110 hedge funds were long UnitedHealth Group Incorporated (NYSE:UNH), compared to 91 funds in the last quarter. Rajiv Jain’s GQG Partners is the leading position holder in the company, with 3.2 million shares worth $1.6 billion. 

Here is what Stewart Asset Management has to say about UnitedHealth Group Incorporated (NYSE:UNH) in its Q3 2022 investor letter:

“Looking at the Great Recession which began at year-end 2007 and lasted to mid-year 2009 is helpful too. Our four largest current holdings in the portfolio weathered that period well. UnitedHealth’s (NYSE:UNH) earnings were resilient. While it reported modestly down earnings in 2008, its earnings rebounded quickly to record highs in 2010 and the shares responded strongly in anticipation of this.”

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Disclosure: None. 14 Best Stocks To Buy Before the 2023 Recession is originally published on Insider Monkey.