5 Best Beginner Stocks to Buy Now

In this article, we discuss 5 best beginner stocks to buy now. If you want to see more stocks in this selection, check out 14 Best Beginner Stocks to Buy Now. 

5. UnitedHealth Group Incorporated (NYSE:UNH)

Number of Hedge Fund Holders: 110

UnitedHealth Group Incorporated (NYSE:UNH) operates as a diversified healthcare company in the United States. On November 4, UnitedHealth Group Incorporated (NYSE:UNH) declared a quarterly dividend of $1.65 per share, in line with previous. The dividend is distributable on December 13, to shareholders of the company as of December 5. UnitedHealth Group Incorporated (NYSE:UNH) is one of the top stocks for a beginner portfolio. 

On November 23, Morgan Stanley analyst Erin Wright initiated coverage of UnitedHealth Group Incorporated (NYSE:UNH) with an Overweight rating and a price target of $587. In health insurance, “scale is king” and UnitedHealth Group Incorporated (NYSE:UNH) is the biggest national insurer which is ranked among the top three in almost all insurance end markets, the analyst told investors. 

According to Insider Monkey’s data, 110 hedge funds were long UnitedHealth Group Incorporated (NYSE:UNH) at the end of the third quarter of 2022, compared to 91 funds in the prior quarter. Rajiv Jain’s GQG Partners is the leading stakeholder of the company, with 3.2 million shares worth $1.6 billion. 

Aristotle Atlantic made the following comment about UnitedHealth Group Incorporated (NYSE:UNH) in its Q3 2022 investor letter:

“UnitedHealth Group Incorporated (NYSE:UNH) is a leading U.S. health insurer offering a variety of plans and services to group and individual customers nationwide. Its health benefits segment manages health maintenance organization, preferred provider organization and point-of-service plans, as well as Medicare, Medicaid, state-funded, and supplemental vision and dental options. In addition, UnitedHealth Group’s Optum health services units—OptumHealth, OptumInsight and OptumRx—provide wellness and care management programs, financial services, information technology solutions, and pharmacy benefit management services to individuals and the health care industry. We believe UnitedHealth Group is well-positioned as a leader in commercial and government insurance markets with a broad complimentary service offering through Optum Health. As one of the largest healthcare payers and providers, we believe the company has unique insights and scale to continue to evolve the health care delivery process and drive above industry profitability and growth. We believe UnitedHealth Group’s track record of financial strength and stability warrants a premium in share valuation.”

4. The Walt Disney Company (NYSE:DIS)

Number of Hedge Fund Holders: 112

The Walt Disney Company (NYSE:DIS) is an American entertainment conglomerate. It is one of the best stocks for beginners. On November 22, Tigress Financial analyst Ivan Feinseth assigned a Buy rating to The Walt Disney Company (NYSE:DIS) shares but lowered the price target to $177 from $229, citing a re-rating of value due to short-term linear network pressure. Nonetheless, the analyst thinks the return of former CEO Bob Iger will result in higher creativity, and the ongoing release of blockbuster content will continue to support growth. The Walt Disney Company (NYSE:DIS)’s fortress balance sheet, strong cash flow, and prudent capital allocation allow it to invest in content development, new theme park attractions, and growth initiatives, the analyst added. The Walt Disney Company (NYSE:DIS) is on his Research Focus List and Focus Opportunity Portfolio.

According to Insider Monkey’s data, 112 hedge funds were bullish on The Walt Disney Company (NYSE:DIS) at the end of Q3 2022, compared to 109 funds in the prior quarter. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is one of the leading stakeholders of the company, with 3.50 million shares worth about $331 million. 

Here is what Third Point specifically said about The Walt Disney Company (NYSE:DIS) in its Q3 2022 investor letter:

“As disclosed in our Q2 letter, we reinitiated a significant position in The Walt Disney Company (NYSE:DIS) when the company retested its Covid lows earlier this year. At the current price, Disney is trading for little more than the stand-alone value of its Parks business and a mere 15x ’24 “street” consensus. The company remains early in its Direct to Consumer (“DTC”) transition with a leading market position, and yet the current stock price ascribes negligible value to the streaming business. We believe this is due to questions around the terminal economics of streaming, given large losses being generated today at Disney (>$1 billion dollars last quarter) and stagnating margins at peers such as Netflix. On the last earnings call, management highlighted three items that could lead to an inflection in DTC profitability over the next 12 months: a 38% price increase for Disney+ in the US; moderating growth in cash content expense; and an advertising tier for Disney+ launching in two months that can drive additional ARPU given high demand for the Disney brand amongst advertisers.

While the company has guided Disney+ achieving breakeven sometime within the fiscal year ending September 2024, the valuation suggests the market remains skeptical. Disney only trades at ~14x the $7 in earnings generated prior to the Fox acquisition, which implies investors don’t expect earnings to meaningfully exceed this figure in the coming years. Hence, the first value driver we highlighted in our last letter is the opportunity for management to optimize Disney’s cost base to drive earnings growth. We believe Disney has ample means to rationalize costs across its operating platform and deliver targeted content for home viewing that does not entail the same cost structure of exclusive theatrical releases…” (Click here to view the full text)

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

Number of Hedge Fund Holders: 126

PayPal Holdings, Inc. (NASDAQ:PYPL) is a California-based company that operates a technology platform enabling digital payments on behalf of merchants and consumers worldwide. On November 28, Barclays analyst Ramsey El-Assal maintained an Overweight rating on PayPal Holdings, Inc. (NASDAQ:PYPL) but lowered the firm’s price target on the shares to $100 from $125. The analyst updated his model following the company’s Q3 earnings report. The decline in PayPal Holdings, Inc. (NASDAQ:PYPL) stock is considered a buying opportunity by many Wall Street experts, making it one of the best beginner stocks to consider.

According to Insider Monkey’s data, 126 hedge funds were long PayPal Holdings, Inc. (NASDAQ:PYPL) at the end of Q3 2022, compared to 97 funds in the last quarter. Ken Fisher’s Fisher Asset Management is the largest stakeholder of the company, with 17.6 million shares worth $1.5 billion. 

Here is what RiverPark Large Growth Fund has to say about PayPal Holdings, Inc. (NASDAQ:PYPL) in its Q3 2022 investor letter:

“PayPal, announced better-than-expected 2Q results, positive guidance (including more than $1.3 billion of 2023 cost savings leading to operating margin expansion), a $15 billion stock repurchase program, and the appointment of Blake Jorgensen as CFO, who was previously the well-regarded CFO at Electronic Arts. The company reported 9% revenue growth, in-line with guidance, and $0.93 EPS, exceeding guidance due to robust operating leverage. Management narrowed its 2022 revenue guidance from 11%-13% growth to about 11% growth due to the macro environment but raised its EPS guidance due to greater operating margin leverage and share buybacks. The stock also reacted to the news that activist investor Elliott Management had taken a stake in the company. PYPL operates at significantly lower margins than its payment competitors Visa and Mastercard, and sources suggest that Elliott intends, among other things, to push for the company to improve its margins and drive higher cash flow growth in the near term.

PayPal provides direct exposure to the secular growth in e-commerce driven digital payments as it is the most accepted digital wallet on-line. More than 3/4 of the 1,500 largest online retailers across North America and Europe accept PayPal, which is almost triple the acceptance of Apple Pay, the number two digital wallet. PayPal is also a key beneficiary of the current dramatic shift in consumer buying habits brought on by the pandemic, as well as the relatively newer consumer-to-consumer payment trends through its Venmo peer-to-peer (P2P) payment service. With a 2Q non-GAAP operating margin of 19%, PYPL also has significant margin expansion potential given that competitors Adyen, Visa and Mastercard have 50%-65% operating margins. We believe the combination of the secular growth of eCommerce and P2P payments, along with expanding operating leverage and the strategic use of the company’s significant and growing cash balance should fuel a mid-20% earnings growth rate over the next five years. This, to us, presents an excellent risk/reward profile given that PYPL trades at a modest premium to the market multiple and a 6% 2023 FCF yield.”

2. Visa Inc. (NYSE:V)

Number of Hedge Fund Holders: 165

Visa Inc. (NYSE:V) is a California-based payments technology company. Visa Inc. (NYSE:V) announced on November 25 that its U.S. payments volume in November increased 9% from a year ago, even after the company exited its operations in Russia in March 2022, and was up 10% in October 2022. Global processed transactions rose 10% year-over-year and were 140% of 2019 levels in November.

On November 28, Baird analyst David Koning said Visa Inc. (NYSE:V) offered updated operating metrics through November 21 which indicated that quarter-to-date trends are higher than his Q1 estimates. He said he likes it a lot given numerous benefits amid macro uncertainty including inflation, soaring rates on big cash balances, recovery in Asia-Pacific, and easy comps on Russia in the second half of 2023. The analyst reiterated an Outperform rating and a $250 price target on Visa Inc. (NYSE:V) shares.

According to Insider Monkey’s data, 165 hedge funds were bullish on Visa Inc. (NYSE:V) at the end of the third quarter of 2022, compared to 166 funds in the prior quarter. Chris Hohn’s TCI Fund Management is the leading stakeholder of the company, with roughly 20 million shares worth $3.5 billion.  

Baron Funds made the following comment about Visa Inc. (NYSE:V) in its Q3 2022 investor letter:

“Shares of global payment network Visa Inc. (NYSE:V) fell despite reporting financial results that beat Street forecasts and sustained volume growth in recent months. Revenue grew 19% and EPS grew 33% in the most recent quarter, and double-digit payment volume growth persisted through August. Share price weakness represented a reversal of outperformance earlier this year and may be due to foreign exchange headwinds and concerns about a potential weakening of consumer spending. We continue to own the stock due to Visa’s long runway for growth and significant competitive advantages.”

1. Amazon.com, Inc. (NASDAQ:AMZN)

Number of Hedge Fund Holders: 269

Amazon.com, Inc. (NASDAQ:AMZN) is one of the most financially stable companies, which makes it an attractive stock for beginners given the shares are down significantly from their peak price. On November 22, Piper Sandler analyst Thomas Champion maintained an Overweight rating on Amazon.com, Inc. (NASDAQ:AMZN) but trimmed the price target on the shares to $119 from $125. The analyst noted that AWS maintains industry dominant infrastructure-as-a-service market share of 50% among the “Big-4” providers. The analyst slashed estimates to reflect industry headwinds but remains bullish on Amazon.com, Inc. (NASDAQ:AMZN) shares.

Among the hedge funds tracked by Insider Monkey, Amazon.com, Inc. (NASDAQ:AMZN) was part of 269 public stock portfolios at the end of September 2022, compared to 252 in the prior quarter. Harris Associates is a prominent stakeholder of the company, with 13.5 million shares worth $1.5 billion. 

Baron Funds made the following comment about Amazon.com, Inc. (NASDAQ:AMZN) in its Q3 2022 investor letter:

“Amazon.com, Inc. (NASDAQ:AMZN) is the world’s largest e-commerce retailer and cloud services provider. Shares of Amazon increased 6% in the quarter after the company reported strong results with 7% year-over-year revenue growth driven by 33% growth in Amazon Web Services (AWS), Amazon’s leading cloud computing service, while guiding for an acceleration in third quarter revenue growth, which is expected to be between 13% and 17% year-over-year. Amazon’s share of e-commerce is roughly 40%, far ahead of competition, yet domestic e-commerce accounted for only 14.5% of total retail sales (according to U.S. Census Bureau data for the second quarter of 2022), implying durable growth opportunities ahead. Internationally, the opportunity remains large as Amazon still has less than a 2% market share of international retail spending. Its advertising share is also only 3% and growing, underpinned by the structural closed-loop systems it enables (merchants know exactly whether their ad dollars resulted in a purchase since they are all done on the Amazon platform), which enables accurate targeting and measurement. Lastly, AWS has a good runway for growth as the industry still represents only 9.5% out of the $4.3 trillion of global IT spending according to Gartner. Areas such as logistics and health care present additional optionality.”

You can also take a look at 10 Best African Stocks To Buy and Retirement Stock Portfolio: 11 Safe Dividend Stocks.