5 Best High Margin Growth Stocks to Buy Now

4. Apple Inc. (NASDAQ:AAPL)

Operating Margin: 30.53%

Number of Hedge Fund Holders: 128

Apple Inc. (NASDAQ:AAPL) is among the few companies that have managed to maintain strong consumer demand for its products in 2022, and therefore its profitability. The company’s position allows it to have significant pricing power over rivals, and pass on higher costs to consumers.

According to research firm Counterpoint Research, Apple, Inc. (NASDAQ:AAPL) recorded 147% year-over-year growth in the Chinese smartphone market in Q2, and accounted for 46% of the country’s total market share. As of August 24, Apple Inc. (NASDAQ:AAPL) has gained 12.1% over the past twelve months and has a trailing twelve-month operating margin of 30.5%.

This month, KeyBanc analyst Brandon Nispel raised his price target on Apple Inc. (NASDAQ:AAPL) to $185 from $177 and reiterated an ‘Overweight’ rating on the shares. The analyst is bullish on Apple Inc. (NASDAQ:AAPL) because of the strong demand trends for its products.

At the end of Q2, 128 hedge funds were long Apple Inc. (NASDAQ:AAPL) with stakes worth $143 billion, compared to 131 positions in the preceding quarter with stakes worth $182 billion. As of June 30, Berkshire Hathaway owns roughly 895 million shares of Apple Inc. (NASDAQ:AAPL) and is the largest shareholder in the company. The investment covers 40.76% of Warren Buffett’s 13F portfolio.

Here is what Wedgewood Partners had to say about Apple Inc. (NASDAQ:AAPL) in its second-quarter 2022 investor letter:

“Apple grew revenues +9%, driven by +17% growth in the Services segment. While iPhone revenues grew a modest +5%, it was on an exceptional year ago comparison of +66%. iPhone continues to capture most industry smartphone profits by focusing on high-end price tiers. Apple is taking nearly two-thirds of the revenue share in the premium ($400 and above) smartphone segment. Further, most of the growth was driven by expansion in the “ultra-premium” price tier of $1000 or more per unit.[1] As we have highlighted in the past, Apple’s relentless focus on the development and integration between hardware (especially integrated circuits) and software continues to add significant value for customers of its products and services. We expect this favorable competitive dynamic to continue for the foreseeable future.”