In this article, we will take a detailed look at the 15 Best Large-Cap Stocks to Buy in 2024.
Large-cap stocks rose to prominence when the inflation storm began and the Federal Reserve began raising interest rates. That’s because major companies with established business models and strong balance sheets can weather difficult times better than smaller companies. Earlier this month, Morgan Stanley said in a report that US stocks are pricing in a lot of good news for 2024. Goldman Sachs said valuations are no longer cheap but they are not stretched either. Goldman said in the current environment where cost of capital remains high, large-cap stocks are “better insulated” from market pressures when compared to “fragile” small-cap companies.
Citi Picks Top Large-Cap Stocks for 2024
In January 2024, Citi published its large-cap recommendations for 2024. Citi said these are buy-rated large-cap stocks that were selected through a “bottom-up fundamental methodology.” Citi said it took into account several metrics while choosing these stocks including health of balance sheets, growth prospects and valuations.
For this article we scanned through Citi’s list of large-cap recommendations and picked 15 stocks with the highest number of hedge fund investors. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).
15. Rockwell Automation Inc (NYSE:ROK)
Number of Hedge Fund Investors: 34
Industrial automation company Rockwell Automation Inc (NYSE:ROK) ranks 15th in our list of the best large-cap stocks to buy. Insider Monkey’s database of 910 hedge fund shows that 34 hedge funds had stakes in Rockwell Automation Inc (NYSE:ROK) as of the end of the third quarter of 2023. The biggest stake in Rockwell Automation Inc (NYSE:ROK) is owned by Ken Fisher’s Fisher Asset Management which owns a $159 million stake in Rockwell Automation Inc (NYSE:ROK).
Goldman Sachs recently published a list of stocks that could gain if Republicans win the US election 2024. Rockwell Automation Inc (NYSE:ROK) made it to the list as Goldman believes the stock can gain on the back of onshore initiatives involving electrification and automation.
TimesSquare Capital U.S. Mid Cap Growth Strategy made the following comment about Rockwell Automation, Inc. (NYSE:ROK) in its Q3 2023 investor letter:
“In the Industrials sector we gravitate towards business service companies, those focused on automation & efficiency improvements, and essential infrastructure services. Rockwell Automation, Inc. (NYSE:ROK) is a new addition this quarter. They provide industrial automation and digital transformation solutions. There is secular growth stemming from a rapid push towards automated and connected manufacturing; as well as offering an offset to rising labor costs.”
14. CRH PLC (NYSE:CRH)
Number of Hedge Fund Investors: 48
Building materials company CRH PLC (NYSE:CRH) ranks 14th in our list of the best large-cap stocks to buy in 2024. Citi estimates an EPS of $4.60 for CRH PLC (NYSE:CRH) in 2024. As of the end of the third quarter of 2023, 48 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in CRH PLC (NYSE:CRH).
In December, CRH PLC (NYSE:CRH) said it completed the latest phase of its share buyback program, returning a further $1 billion of cash to shareholders.
ClearBridge International Growth EAFE Strategy stated the following regarding CRH plc (NYSE:CRH) in its fourth quarter 2023 investor letter:
“Despite these risks, our holdings in Europe and the U.K. found their footing in the fourth quarter, with eight of the top 10 individual contributors coming from these regions. Irish building materials supplier CRH plc (NYSE:CRH), which has demonstrated strong value creation through M&A and optimization of its portfolio assets over the last several quarters, rose strongly on positive sentiment after its investor day highlighted the company’s accelerating growth in the U.S.”
13. Constellation Brands, Inc. (NYSE:STZ)
Number of Hedge Fund Investors: 50
Last month, Morgan Stanley analyst Dara Mohsenian praised Constellation Brands, Inc.’s (NYSE:STZ) earnings and valuation. The analyst expects solid beer volumes in the future.
As of the end of the third quarter of 2023, 50 hedge funds had stakes in Constellation Brands, Inc. (NYSE:STZ).
12. Bank of New York Mellon Corp (NYSE:BK)
Number of Hedge Fund Investors: 51
Insider Monkey’s database of 910 hedge funds shows that 51 hedge funds had stakes in Bank of New York Mellon Corp (NYSE:BK) as of the end of the third quarter. The most significant stake in Bank of New York Mellon Corp (NYSE:BK) is owned by Jean-Marie Eveillard’s First Eagle Investment Management which owns a $693 million stake in Bank of New York Mellon Corp (NYSE:BK).
Last month Bank of New York Mellon Corp (NYSE:BK) posted fourth quarter results. Adjusted EPS in the period came in at $1.28, beating estimates by $0.16. Revenue jumped 9.9% year over year to $4.31 billion, beating estimates by $10 million.
11. Deere & Co (NYSE:DE)
Number of Hedge Fund Investors: 55
Deere & Co (NYSE:DE), commonly known as John Deere, makes agricultural machinery. The stock is among the top large-cap recommendations for 2024 by Citi. Deere & Co (NYSE:DE) is also liked by hedge funds since Insider Monkey’s proprietary database of 910 hedge funds shows that 55 hedge funds had stakes in Deere & Co (NYSE:DE). The most significant stake in Deere & Co (NYSE:DE) is owned by Michael Larson’s Bill & Melinda Gates Foundation Trust which owns a $1.5 billion stake in Deere & Co (NYSE:DE).
10. Lockheed Martin Corp (NYSE:LMT)
Number of Hedge Fund Investors: 60
With a dividend yield of 2.95%, Lockheed Martin Corp (NYSE:LMT) is a notable large-cap stock to buy in 2024. Citi expects Lockheed Martin Corp’s (NYSE:LMT) EPS to come in at $26.32 in 2024.
As of the end of the third quarter of 2023, 60 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Lockheed Martin Corp (NYSE:LMT). The biggest stake in Lockheed Martin Corp (NYSE:LMT) is owned by John Overdeck and David Siegel’s Two Sigma Advisors which owns a $366 million stake in Lockheed Martin Corp (NYSE:LMT).
RiverPark Advisors made the following comment about Lockheed Martin Corporation (NYSE:LMT) in its Q3 2023 investor letter:
“Lockheed Martin Corporation (NYSE:LMT): LMT is the world’s largest aerospace and defense contractor. With about 70% of its $66 billion in revenue from the U.S. government, the company is well positioned to benefit from U.S. defense budget growth, historically 5%-6% per year, as well as increased global military spending. With a $158 billion backlog and almost 30% of its revenue coming from building F-35 aircraft with deliveries forecast to reach 180 per year (up from 141 in 2022) in the coming years, we believe the company could grow at a higher rate than overall defense budget growth and Street expectations over the next several years. Further, strategic acquisitions, debt repayment, a 2.9% dividend yield, and continued share buybacks from more than $6 billion per year of free cash flow should lead to even greater shareholder returns. We re-initiated a small position in August.”
9. Schlumberger NV (NYSE:SLB)
Number of Hedge Fund Investors: 65
Oilfield services company Schlumberger NV (NYSE:SLB) last month reaffirmed its full-year 2024 guidance and said it expects “significant growth for 2024” in Saudi Arabia despite the country’s recent orders to Aramco that indicated a planned reduction in oil production.
Citi expects Schlumberger NV’s (NYSE:SLB) EPS in 2024 to total $3.61.
Alger Spectra Fund made the following comment about Schlumberger Limited (NYSE:SLB) in its Q3 2023 investor letter:
“Schlumberger Limited (NYSE:SLB) provides technology for reservoir characterization, drilling, production, and processing to the oil and gas industry. During the period, shares contributed to performance driven in large part by higher oil prices and strong fiscal second quarter earnings results. Within its quarterly report. the company highlighted growing momentum in international offshore markets that reflected market share gains as well as solid end market activity, leading to strong profit margins and healthy free cash flow generation, in our view.”
8. HCA Healthcare Inc (NYSE:HCA)
Number of Hedge Fund Investors: 71
Citi believes HCA Healthcare Inc (NYSE:HCA) is one of the top large-cap stocks to own in 2024. Citi expects HCA Healthcare Inc (NYSE:HCA)’s EPS in 2024 to come in at $19.29.
Out of the 910 hedge funds tracked by Insider Monkey, 71 hedge funds had stakes in HCA Healthcare Inc (NYSE:HCA).
Diamond Hill Large Cap Strategy made the following comment about HCA Healthcare, Inc. (NYSE:HCA) in its Q3 2023 investor letter:
“Health care facilities operator HCA Healthcare, Inc. (NYSE:HCA) and medical device company Abbott Laboratories were also among our bottom contributors. Despite solid fundamental performance, HCA Healthcare experienced some share price weakness during Q3. This appears to be more a result of short-term noise and sell-side expectations rather than any significant operational or financial issues.”
7. Intuitive Surgical, Inc. (NASDAQ:ISRG)
Number of Hedge Fund Investors: 78
Intuitive Surgical, Inc. (NASDAQ:ISRG) is making waves after posting strong Q3 results and giving updates on its da Vinci 5 surgical robot. During its Q3 earnings call, Intuitive Surgical, Inc. (NASDAQ:ISRG) talked about da Vinci 5:
“As we look to 2024, I’d like to share with you that we have submitted to FDA our 510(k) application for our next generation multiport platform, da Vinci 5. Our design priorities for our new platforms are as follows. First, we look for opportunities to bring better minimally invasive care to more patients. Second, we work to improve the performance of our platforms and existing procedures. Third, we seek to improve care team satisfaction through product utility, dependability, and usability improvements.
And finally, we strive to help lower the total cost to treat per patient episode. Once cleared, we believe da Vinci 5 will make a positive impact on each of these objectives through hundreds of design changes that respond to surgeon and care team inputs and fulfill our design priorities. As just one example, da Vinci 5 possesses four orders of magnitude greater processing power than our Generation 4 products. That means 10,000 times the processing power to gather data, improve sensing, and deliver better digital and analytic performance. Given the sophistication of the technologies involved, we plan a phased launch in the first several quarters after clearance, giving us time to mature our supply and manufacturing processes for the new system.
da Vinci 5 will join our existing robotic surgical system portfolio alongside multiport systems X and Xi and single port system SP, offering surgeons and hospitals their choice of highly capable proven solutions from Intuitive. We have been in communication with FDA on da Vinci 5 for the past several quarters and have completed a comprehensive multi-center IDE trial. This trial finished accruing patients in May of 2023 and we submitted for our 510(k) to FDA for da Vinci 5 in August last year. We are currently responding to FDA’s questions.”
Read the entire earnings call transcript here.
Baron Health Care Fund stated the following regarding Intuitive Surgical, Inc. (NASDAQ:ISRG) in its fourth quarter 2023 investor letter:
“Additional tailwinds to performance came from robotic surgical system pioneer Intuitive Surgical, Inc. (NASDAQ:ISRG). We believe Intuitive Surgical will continue to innovate and launch new products that enhance surgical outcomes, and we think the company has a long runway for growth.
Intuitive Surgical, Inc. sells the da Vinci surgical robotic system for minimally invasive surgical procedures. The stock rose on investor speculation that the company could launch a new robotic system in 2024. We believe Intuitive Surgical will continue to innovate and launch new products that enhance surgical outcomes, and we think the company has a long runway for growth.”
6. T-Mobile Us Inc (NASDAQ:TMUS)
Number of Hedge Fund Investors: 79
Citi added T-Mobile Us Inc (NASDAQ:TMUS) in its list of the best large-cap stocks for 2024. T-Mobile Us Inc (NASDAQ:TMUS) recently posted Q4 results. While GAAP EPS of $1.67 missed estimates, revenue in the period came in at $20.48 billion, beating estimates by $810 million.
ClearBridge Dividend Strategy made the following comment about T-Mobile US, Inc. (NASDAQ:TMUS) in its Q3 2023 investor letter:
“During the quarter we initiated positions in two new names: T-Mobile US, Inc. (NASDAQ:TMUS) and Gilead Sciences. T-Mobile is the best-in-class player in the wireless space, delivering the strongest growth with the lowest cost structure and the best consumer proposition. T-Mobile’s strength is rooted in its advantaged competitive position. Its superior spectrum holdings enable it to provide better wireless service at meaningfully lower cost. T-Mobile’s annual capital expenditures run about $10 billion, on the order of half the amount its peers must spend. Due to its lower cost structure, T-Mobile can undercut its competitors on price while still generating compelling profitability and returns.
This combination — superior service at lower prices — has enabled T-Mobile to outgrow its competition. In the three years since completing its merger with Sprint, T-Mobile has grown its post-paid subscriber base by about 22%. Over the same period, AT&T’s has grown by about 14%, while Verizon’s by less than 5%.
Given the high fixed-cost nature of the wireless business, these steady increases in revenue growth have led to outsize increases in profits and free cash flow. Free cash flow in 2023 is expected to come in around $13.5 billion, up from less than $8 billion last year. In 2024 free cash flow is expected to grow by over 20% to approximately $17 billion — providing a 10% yield based on today’s stock price.
We have long admired T-Mobile, but until recently the stock did not pay a dividend. The company announced its inaugural dividend in September, and we bought the stock shortly thereafter. The initial yield is about 2% and it is expected to grow about 10% per year.”
5. Walmart Inc (NYSE:WMT)
Number of Hedge Fund Investors: 80
CFRA recently published a list of 4-star and 5-star dividend aristocrats. Walmart Inc (NYSE:WMT) made it to the list. Walmart Inc (NYSE:WMT) is also among the most popular stocks owned by hedge funds as 80 hedge funds had stakes in Walmart Inc (NYSE:WMT) as of the end of the third quarter.
4. Merck & Co Inc (NYSE:MRK)
Number of Hedge Fund Investors: 85
Earlier this month Merck & Co Inc (NYSE:MRK) posted strong fourth quarter results. Adjusted EPS in the quarter came in at $0.03, surpassing estimates by $0.14. Revenue jumped 6% year over year to $14.6 billion, beating estimates by $120 million.
For full-year 2024 Merck & Co Inc (NYSE:MRK) expects adjusted EPS to come in the range of $8.44 and $8.59 versus the consensus estimate of $8.42 consensus.
Carillon Eagle Mid Cap Growth Fund made the following comment about Merck & Co., Inc. (NYSE:MRK) in its Q3 2023 investor letter:
“Merck & Co., Inc. (NYSE:MRK) underperformed in the third quarter, based on what we view as largely macroeconomic-related factors. The company continues to execute well, both clinically and fundamentally, but much of the biopharmaceutical industry has been weak as investors are gravitating to other, more cyclical sectors.”
3. Union Pacific Corp (NYSE:UNP)
Number of Hedge Fund Investors: 90
Citi believes railroad company Union Pacific Corp (NYSE:UNP) is one of the top large-cap stocks to buy in 2024. Citi expects Union Pacific Corp’s (NYSE:UNP) EPS to total $11.60 in 2024, while the stock’s PE ratio is expected to be at 20.4.
Last month Union Pacific Corp (NYSE:UNP) posted fourth quarter results. GAAP EPS in the fourth quarter came in at $2.71, beating estimates by $0.15. Revenue came in at $6.16 billion, beating estimates by $110 million.
Cooper Investors made the following comment about Union Pacific Corporation (NYSE:UNP) in its Q3 2023 investor letter:
“The major focus in Texas was spending a day visiting operations of Union Pacific Corporation (NYSE:UNP), a Stalwart investment made earlier this year.
Our investigations into the railroad industry have felt like a history lesson of the late 19th Century, a peek into the Gilded Age. At this time railroads became a transformative force that connected the East Coast to the Western frontier, pushing the economic potential of US industry and commerce to new heights. Over a century later and despite technological upheaval, the freight railroads of North America still feel just as relevant and a key part of the new industrial age.
To own, operate and invest in a railroad is to be a part of the lifeblood of North America. It is to witness the movement of grain, concrete, steel, wood, energy, autos, and shipping containers across vast distances. These are irreplaceable assets that could not be built today, and for the most part have very few substitutes – UNPs tagline “Building America” certainly rings true…” (Click here to read the full text)
2. Amazon.com Inc (NASDAQ:AMZN)
Number of Hedge Fund Investors: 286
Amazon.com Inc’s (NASDAQ:AMZN) Q4 results show the company’s ecommerce business is thriving while its AWS business is again showing acceleration thanks to AI. This has cemented Amazon.com Inc’s (NASDAQ:AMZN) position in the Magnificent Seven group. Piper Sandler analyst Thomas Champion recently said in a note that new deals of AWS with companies related to AI helped the Cloud segment post stronger growth. The analyst has a $220 price target on the stock.
Polen Focus Growth Strategy stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its fourth quarter 2023 investor letter:
“For the full year, the top relative and absolute contributors were Amazon.com, Inc. (NASDAQ:AMZN), Salesforce, and ServiceNow. Amazon shares appreciated 88% in 2023, driven primarily by rapidly expanding operating profit margins and free cash flow growth. After the pandemic, Amazon experienced a period of inefficiency and overinvestment in its distribution and logistics infrastructure. Amazon is now leveraging these investments as growth returned to its e-commerce business in 2023 after a highly unusual 2022. At the same time, Amazon’s rapidly growing and high-margin advertising business is contributing strongly to the entire company’s operating profit growth. The AWS (Amazon Web Services) cloud infrastructure and services business continued to slow in 2023 as customers anticipating a more difficult economic environment looked to save money on their cloud spend, but these cloud spending optimizations began to stabilize in the second half of 2023. We now expect customer interest in generative AI will begin to contribute to growth.”
1. Microsoft Corp (NASDAQ:MSFT)
Number of Hedge Fund Investors: 306
Microsoft Corp (NASDAQ:MSFT) is the most popular stock among the 910 hedge funds tracked by Insider Monkey. As of the end of the third quarter of 2023, 306 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Microsoft Corp (NASDAQ:MSFT). Citi also recommended Microsoft as a top large-cap stock to buy in 2024. Citi sees Microsoft’s EPS at $11.99 in 2024.
Microsoft is generating a lot of praise after posting latest quarterly results. Dan Ives of Wedbush recently said Microsoft Corp (NASDAQ:MSFT) has a huge penetration in the enterprise world where companies and users will implement Microsoft Corp’s (NASDAQ:MSFT) AI technologies.
“With over 60% of the MSFT installed base seeking to implement AI functionality across the entire enterprise and commercial landscape over the next few years based on our estimates, we believe that this is the early innings of a major monetization opportunity as the company doubles down on its AI strategy with its Copilot generate significant demand,” Ives said.
Madison Sustainable Equity Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its fourth quarter 2023 investor letter:
“Microsoft Corporation’s (NASDAQ:MSFT) sustainable scorecard was updated with an unchanged rating of Above Average. The company’s board has an official Environmental, Social, and Public Policy Committee in addition to the traditional Audit, Compensation, and Governance committees. For ten years, Microsoft has publicly released data measuring the diversity of its workforce. With the prominence of Artificial Intelligence (AI), the company has launched a 5-point blueprint for governing AI to address public policy and regulation. Environmentally, Microsoft has multiple programs to be carbon negative by 2030. The company has signed Purchase Power Agreements for carbon-free energy totaling 13.5 Gigawatts.”
Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also look at the 17 High Growth Large-Cap Stocks To Invest In and the 10 Large-Cap Stocks Billionaires Like the Least.
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Disclosure. None. 15 Best Large-Cap Stocks to Buy in 2024 was initially published on Insider Monkey.
