In this article, we discuss the 10 best stocks to buy for the next 50 years.
Bank of America released a report on June 8 which highlighted how the world is transforming right before our eyes. With the shift in demographics, workforce composition, and economic cycles, there will be a change in demand trends in the coming years.
BoFA reflected on the situation in Ukraine, as well as the high inflation and threats of a United States recession. However, the firm pointed towards large-scale changes that are already in motion, such as the increasing population, climate change, aging global populace, and falling fertility rates, to name a few. Bank of America wrote in its report that “the world won’t look anything like it does today in years to come”. The firm reiterated that more important than a growing population are the quickly changing demand trends among people that industries needs to keep up with.
“The New World Order”
The “new world order” has been set in motion. In the last 50 years, the world population has doubled, but it has not peaked yet. According to the United Nations, the global population may reach 11 billion by 2100, compared to roughly 7.9 billion today. However, the global fertility rate is expected to fall from 2.5 live births per woman in 2019 to around 1.9 in 2100. This will result in a boom in the fertility health benefits market. Similarly, the life expectancy of Americans will increase from 72.3 years to 76.8 years by 2050, which means that insurance, healthcare, and senior housing industries will also experience notable gains.
To cater to a growing population and rapid urban migration, cities will need to expand. Demand for housing will be on the rise. Additionally, as Millennials become homebuyers in the next few years, demand for real estate, homebuilding, and home improvement companies will likely increase. Digitalization and urbanization will lead to a boost in mobility and food delivery services as well. BoFA observed that Gen C – born after 2016 and potentially growing up in a net zero world, would most likely be used to the best of technology and connectivity advancements. This paves the way for internet and disruptive tech stocks in the future.
Some of the best stocks to buy for the next 50 years, keeping in mind BoFA’s world transformation outlook, include JPMorgan Chase & Co. (NYSE:JPM), Roblox Corporation (NYSE:RBLX), and Builders FirstSource, Inc. (NYSE:BLDR).
Photo by Adam Nowakowski on Unsplash
Our Methodology
To select these stocks, we assessed BoFA’s report from June 8, which highlighted the new world demographic and subsequent demand trends. We have selected the following stocks based on growth fundamentals, future value addition, positive analyst ratings, and strong hedge fund sentiment as of Q1 2022.
Best Stocks to Buy for the Next 50 Years
10. Welltower Inc. (NYSE:WELL)
Number of Hedge Fund Holders: 25
Welltower Inc. (NYSE:WELL) is an Ohio-based real estate investment trust that offers healthcare infrastructure, investing in senior housing, post-acute providers, and health systems to deliver innovative care and enhance the wellness and healthcare experience. The company has medical properties in high-growth markets in the United States, Canada, and the United Kingdom. With an aging demographic in most developed countries, Welltower Inc. (NYSE:WELL) is positioned to benefit in the future as more people opt for post-acute and palliative care.
On July 13, Welltower Inc. (NYSE:WELL) reported that the spot occupancy rate of its senior housing operating portfolio improved 130 basis points during the second quarter of 2022. The REIT still expects to achieve Q2 normalized FFO per share as per its earlier issued guidance of $0.84 to $0.87. The company’s shares also deliver a dividend yield of about 3%.
Deutsche Bank analyst Derek Johnston on July 13 maintained a ‘Buy’ rating on Welltower Inc. (NYSE:WELL) but lowered the price target on the stock to $100 from $108. As per the analyst, healthcare real estate investment trusts are the top property choice for the second half of 2022, and he expects senior housing names to outperform.
According to Insider Monkey’s data, 25 hedge funds were bullish on Welltower Inc. (NYSE:WELL) at the end of Q1 2022, up from 23 funds in the previous quarter. Stuart J. Zimmer’s Zimmer Partners is the leading shareholder of the company, with 3.5 million shares worth roughly $339 million.
In addition to JPMorgan Chase & Co. (NYSE:JPM), Roblox Corporation (NYSE:RBLX), and Builders FirstSource, Inc. (NYSE:BLDR), elite hedge funds are pouring into Welltower Inc. (NYSE:WELL).
9. AMN Healthcare Services, Inc. (NYSE:AMN)
Number of Hedge Fund Holders: 25
AMN Healthcare Services, Inc. (NYSE:AMN) offers healthcare staffing services to hospitals and healthcare facilities in the United States. It operates through three segments – Nurse and Allied Solutions, Physician and Leadership Solutions, and Technology and Workforce Solutions. The working population is thinning due to an uneven age demographic, which is why the healthcare field has a shortage of nurses, doctors, and support staff. The company offers healthcare workforce solutions that manage the shortage of workers effectively, ensuring that healthcare services do not get interrupted. Until the age demographic evens out so the workforce has abundant candidates, firms like AMN Healthcare Services, Inc. (NYSE:AMN) are positioned to grow.
On May 24, Jefferies analyst Brian Tanquilut raised the price target on AMN Healthcare Services, Inc. (NYSE:AMN) to $175 from $170 and kept a ‘Buy’ rating on the shares. The analyst believes the stock has been “oversold on excessive fears around volume and rate normalization”. Rates will possibly decline before bottoming later in 2022 above pre-COVID levels, said the analyst, who added that revenue compression is “more than baked into” present FY23 estimates. He also forecasts strong normalized growth after 2022.
According to Insider Monkey’s data, 25 hedge funds were bullish on AMN Healthcare Services, Inc. (NYSE:AMN) at the conclusion of Q1 2022, compared to 28 funds in the prior quarter. Israel Englander’s Millennium Management is the leading stake holder in the company, with 890,147 shares worth about $93 million.
Polen Capital Management mentioned AMN Healthcare Services, Inc. (NYSE:AMN) in its Q3 2020 investor letter. Here is what the firm said:
“AMN Healthcare Services also contributed during the quarter. As a leading provider of healthcare workforce solutions and staffing services in the U.S., the business has experienced substantial dislocation because of COVID-19. Still, the company has adapted, adding services like telehealth and audio/video interpretation services, and deepened and expanded its relationships. While demand for its services remains depressed, order flows are beginning to resume. Over the long-term, we believe its competitive position along with secular tailwinds should continue to drive demand for the company’s services and solutions.”
8. Upwork Inc. (NASDAQ:UPWK)
Number of Hedge Fund Holders: 26
Upwork Inc. (NASDAQ:UPWK) is a California-based work marketplace and freelancing platform. Upwork Inc. (NASDAQ:UPWK) is one of the best stocks to buy for the next 50 years. This is because the declining global working-age population will prompt companies all over the world to outsource operations or hire freelancers to fill in the gaps where their own workforce lacks skills. This will increase traffic on freelancing forums and Upwork Inc. (NASDAQ:UPWK) is one of the best platforms to hire top-rated freelancers from across the globe.
BTIG analyst Marvin Fong on July 11 maintained a ‘Buy’ recommendation on Upwork Inc. (NASDAQ:UPWK) but lowered the price target on the shares to $30 from $34. The analyst said that his research reflected a consistent downward trend in Talent Marketplace job listings during Q2, but he remains bullish on Upwork Inc. (NASDAQ:UPWK)’s long-term opportunity due to the vastness of the labor market and since shares are significantly below their highs.
Among the hedge funds tracked by Insider Monkey, 26 funds were long Upwork Inc. (NASDAQ:UPWK) during the first quarter of 2022, with collective stakes worth $365.65 million. Neil Mehta’s Greenoaks Capital featured as the leading shareholder of the company, with 3.2 million shares worth $74.6 million.
Here is what Spree Capital Advisers had to say about Upwork Inc. (NASDAQ:UPWK) in its Q4 2020 investor letter:
“Early in the fourth quarter we meaningfully increased our position size in Upwork (UPWK). Upwork is a global employment marketplace that enables businesses to vet, hire, and manage talent as part of their distributed workforce. Upwork facilitates labor and demand side connectivity on a global scale by providing the infrastructure to create trust and to streamline talent sourcing, contracting, analysis and payment. Freelancers benefit from having a reputation ranking system that feeds their marketing channels, allowing them to have access to quality, flexible work and on time compensation. Businesses on the demand side benefit by having extensive access to specialized talent, enabling faster and more cost effective hiring, and by having the strategic optionality inherent in the ability to flex a portion of their workforce based on changing demand requirements.
Labor markets have long had unnecessary frictional inefficiencies driven by regional talent imbalances and long-term trends of increased specialization of labor and declining labor mobility. Meanwhile, innovations in communication and global connectivity have transformed the way work gets done. Knowledge workers seek the flexibility and geographic advantages of on demand work, but the barrier to adoption has historically been established habits and work standards on the demand side. The Covid-19 global pandemic has broken down those barriers. We see three steps in the path to enterprise usage and shareholder value creation.
First, Upwork is reducing frictional barriers to on demand labor adoption on the demand side by modularizing the most common jobs served on the platform. Project Catalog is a collection of predefined projects that businesses purchase through an e-commerce purchase experience. Users on the demand side benefit from a frictionless way to purchase well defined, quality verified tasks to augment more complex work being done by full time employees. On demand workers on the supply side benefit from having a new avenue to market and sell the services they consistently perform. Importantly, Project Catalog widens the customer acquisition funnel by providing an easy on ramp for new customers to source and connect with talent, enabling businesses to quickly start with small projects and scale to larger and longer-term projects and relationships. (Click to read full text)
7. Grab Holdings Limited (NASDAQ:GRAB)
Number of Hedge Fund Holders: 27
Grab Holdings Limited (NASDAQ:GRAB) is a Singapore-based company that offers mobility, food and parcel delivery, and financial services through its mobile application in Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. As the digital trend of ride hailing and food delivery takes over almost entirely in the future, Grab Holdings Limited (NASDAQ:GRAB) will be one of the primary beneficiaries of this trend given its market visibility in Southeast Asia.
Deutsche Bank analyst Reena Verma Bhasin on June 17 initiated coverage of Grab Holdings Limited (NASDAQ:GRAB) with a ‘Buy’ rating and a $3.20 price target. The analyst told investors that Grab Holdings Limited (NASDAQ:GRAB) is Southeast Asia’s top “superapp” platform, with a dominant market share in mobility and deliveries, and is an up and coming name in the digital financial services segment, the analyst told investors. The analyst reiterated that the stock delivers “attractive upside potential” after falling 65% year-to-date. The analyst expects solid growth in mobility and told investors that the deliveries segment will break-even over the next year. On July 7, Evercore ISI analyst Mark Mahaney also maintained an ‘Outperform’ rating on the firm with a $5 price target.
According to Insider Monkey’s database, 27 hedge funds were bullish on Grab Holdings Limited (NASDAQ:GRAB) at the end of the first quarter of 2022, with collective stakes worth $223.6 million. Brett Barakett’s Tremblant Capital is the largest shareholder of the company, with approximately 11 million shares worth $38.3 million.
Like JPMorgan Chase & Co. (NYSE:JPM), Roblox Corporation (NYSE:RBLX), and Builders FirstSource, Inc. (NYSE:BLDR), institutional investors are monitoring Grab Holdings Limited (NASDAQ:GRAB) as a long-term investment.
6. Roblox Corporation (NYSE:RBLX)
Number of Hedge Fund Holders: 40
Roblox Corporation (NYSE:RBLX) operates an online entertainment platform, offering 3D interactive experiences, educational content, gaming, and communication. As Gen C, the people born in 2016 and later, reach their teenage years, Roblox Corporation (NYSE:RBLX) will likely be operational as a multi-purpose platform that will be an important part of their lives, just like Facebook and Instagram today. This makes it an interesting long-term investment, especially since the stock is more than 60% off its highs.
On July 12, BTIG analyst Clark Lampen reaffirmed a ‘Buy’ rating on Roblox Corporation (NYSE:RBLX) but lowered the price target on the stock to $57 from $61. The analyst slashed his estimates to account for a “tempered” DAU outlook in May, although he still sees upside potential as Roblox Corporation (NYSE:RBLX) seeks out new monetization avenues. Advertising and in-experience placements can contribute roughly $1.5 billion in Bookings over time, the analyst told investors in a bullish thesis.
Among the hedge funds tracked by Insider Monkey, Roblox Corporation (NYSE:RBLX) was part of 40 public stock portfolios at the end of the March 2022 quarter. Cathie Wood’s ARK Investment Management is the leading shareholder of the company, with more than 6 million shares worth $281.7 million.
Here is what Tao Value had to say about Roblox Corporation (NYSE:RBLX) in its Q4 2021 investor letter:
“Roblox (RBLX) got significant more attention from both institutional & retail investors after Facebook announced to rename itself as Meta Platforms. I believe the price appreciation is largely attributed to the increased attention. On the business side, Roblox rolled out a few successful music events and also partnered with Netflix on testing long-form media consumption in the virtual world. Apple in its iOS 14.5 rolled out an impactful change for the digital advertising landscape by requiring all apps to ask users to “opt in”.
5. D.R. Horton, Inc. (NYSE:DHI)
Number of Hedge Fund Holders: 52
D.R. Horton, Inc. (NYSE:DHI) is a Texas-based homebuilding company that constructs and sells residential homes under the D.R. Horton, America’s Builder, Express Homes, Emerald Homes, and Freedom Homes brands. Over the next five-to-ten years, a new batch of homebuyers will enter a market in which D.R. Horton, Inc. (NYSE:DHI) offers affordable housing, which positions it as a beneficiary over the coming years.
In July, real estate and construction stocks gained despite recession fears, as dampening economic growth would result in slower rate hikes, which bodes well for potential homebuyers. On July 12, JPMorgan analyst Michael Rehaut reiterated an ‘Overweight’ rating on D.R. Horton, Inc. (NYSE:DHI) but lowered the price target on the shares to $80 from $82.50.
According to Insider Monkey’s data, 52 hedge funds were bullish on D.R. Horton, Inc. (NYSE:DHI) at the end of Q1 2022, with combined stakes of about $2 billion. John Armitage’s Egerton Capital Limited is the leading shareholder of the company, with 7.8 million shares worth $582.5 million.
Here is what Third Avenue Management Real Estate Value Fund had to say about D.R. Horton, Inc. (NYSE:DHI) in its Q1 2022 investor letter:
“Outside of these additions, the Fund also sold “out-of-the-money” put options on the common stock of D.R. Horton, Inc. (“DR Horton”)-the largest homebuilder in the U.S. that accounted for nearly 1 out 9 new homes sold in the U.S. last year. Having followed the company for years, Fund Management can say without hesitation that DR Horton is an incredibly efficient builder focused on delivering quality product at the entry-level price point (its average selling price was less than $325,000 last year) with leading positions in key Sunbelt markets including Dallas, Houston, Austin, Atlanta, and Phoenix.
While the near-term outlook for DR Horton is somewhat uncertain given mortgage rate and supply chain volatility, the medium-to-long-term prospects for volume-based homebuilders with super-strong balance sheets and scale advantages seem promising (such as DR Horton and Lennar Corp.) in Fund Management’s view. This is especially the case when considering that:
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Residential inventories are at record- low levels in most major markets whether gauged by “month’s supply” or aggregate units available,
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Demand for single- family residences is accelerating as the largest generation in U.S. history (the “millennial cohort”) enters its prime home buying years and desires more space not only due to “life events” but also “remote” and “hybrid” working arrangements, and
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Significant inflation in rental rates for multi-family units in urban areas has left the rent-to-own proposition for single- family homes in suburban areas in a compelling range…” (Click here to see the full text)
4. Builders FirstSource, Inc. (NYSE:BLDR)
Number of Hedge Fund Holders: 57
Builders FirstSource, Inc. (NYSE:BLDR) supplies building materials and construction services to professional homebuilders, remodelers, and consumers in the United States. The housing market will experience a boom as Millennials start buying their first homes in a few years, which is a positive catalyst for Builders FirstSource, Inc. (NYSE:BLDR).
On May 17, BMO Capital analyst Ketan Mamtora reiterated an ‘Outperform’ rating on Builders FirstSource, Inc. (NYSE:BLDR) but lowered the price target on the shares to $90 from $96. The company’s Q1 earnings beat illustrated a “record quarter, with tight markets and faster pass-through of prices boosting Builders’ margins in the near term”, the analyst told investors in a research note. He observed that the company’s fortress balance sheet lends financial flexibility and the stock’s valuation is attractive at current levels.
Among the hedge funds tracked by Insider Monkey, 57 funds were bullish on Builders FirstSource, Inc. (NYSE:BLDR) at the end of Q1 2022, with consolidated stakes worth $1.8 billion. Coliseum Capital held the leading position in the company, with 5.5 million shares valued at $358.4 million.
Here is what Black Bear Value Fund had to say about FirstSource, Inc. (NASDAQ:BLDR) in its Q1 2022 investor letter:
“Builders FirstSource is a supplier and manufacturer of building materials for professional homebuilders, subcontractors, remodelers, and consumers. Their products include factory-built roof and floor trusses, wall panels and stairs, vinyl windows and custom millwork.
The fundamental discussion about homebuilders applies to BLDR. As more homes are built across the country, there will be an increased need for scaled sourcing of products to homebuilders. There is a large amount of fragmentation in the supply chain which provides BLDR a long runway for acquisitions and realistic synergies.
The management team has been using their prodigious free cash flow to both acquire new businesses and buy in their stock. While I historically always liked their business, their historic high-debt levels gave me pause. They have right sized their balance sheet and are taking a very thoughtful view on capital allocation on behalf of shareholders.
BLDR should be able to generate $7-$10 a share in cash in the medium term with significant upside if they can scale through acquisition and/or further penetrate existing markets. We own it at a 11-15% free-cash flow yield so little growth is needed for us to compound value at high rates.”
3. Cigna Corporation (NYSE:CI)
Number of Hedge Fund Holders: 63
Cigna Corporation (NYSE:CI) is a Connecticut-based company that provides medical insurance and healthcare solutions in the United States. With an aging demographic in the United States, healthcare and insurance providers are set to achieve more customers in the years to come, making companies like Cigna Corporation (NYSE:CI) a top portfolio choice for the next 50 years.
Morgan Stanley analyst Ricky Goldwasser on June 22 upgraded Cigna Corporation (NYSE:CI) to ‘Overweight’ from ‘Equal Weight’ with a price target of $296, up from $283. According to the analyst, Cigna Corporation (NYSE:CI) is likely going to be the biggest beneficiary of Humira biosimilars in the healthcare services sector. Humira is an antibody treatment for multiple diseases, including rheumatoid arthritis, psoriatic arthritis, Crohn’s disease, and ulcerative colitis.
Among the hedge funds tracked by Insider Monkey, 63 funds were bullish on Cigna Corporation (NYSE:CI) at the end of Q1 2022, up from 53 funds in the previous quarter. Larry Robbins’ Glenview Capital is the biggest shareholder of the company, with 1.6 million shares worth $382.4 million.
Cigna Corporation (NYSE:CI) was mentioned in the Q4 2021 investor letter of Davis Funds. Here’s what the firm said:
“Healthcare is included in the portfolio both for company-specific reasons, as well as big picture trends. At the company level, we hold select companies in pharmaceuticals, healthcare services and health insurance at attractive valuations. This is at a time when the average age of the U.S. population is fast approaching 40, older than Asia-Pacific and a little younger than the aged populations of Europe and Japan. The number of seniors in the U.S.—i.e., 65 years or older— now surpasses 54 million, or about 15% of the population. Seniors, on average, take a much greater number of medications and account for a large and disproportionate share of healthcare spending, and we expect that trend to continue due to both raw demographics and a proliferation in the number of available treatments and services available now, the latter being driven by innovation and investment in the healthcare industry. Representative holdings in the Fund include Cigna, UnitedHealth Group, Viatris and Quest Diagnostics.”
2. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 103
UnitedHealth Group Incorporated (NYSE:UNH) is a diversified American healthcare company, offering insurance and consumer-oriented health benefit plans to employers. The company increased its quarterly per share dividend by 13.8% to $1.65 in June 2022. This marks the 11th-straight year of annual dividend increases by UnitedHealth Group Incorporated (NYSE:UNH).
On June 16, Loop Capital analyst Joseph France initiated coverage of UnitedHealth Group Incorporated (NYSE:UNH) with a ‘Buy’ rating and a $575 price target. The analyst said UnitedHealth Group Incorporated (NYSE:UNH) is one of the top managed care players, with leading market share in the commercial and government benefits markets. The analyst added that the company’s scale, sector leadership, and innovative technology are “major” competitive advantages.
According to Insider Monkey’s Q1 data, 103 hedge funds were bullish on UnitedHealth Group Incorporated (NYSE:UNH), up from 96 funds in the previous quarter. Boykin Curry’s Eagle Capital Management held the biggest stake in the company, with 2.90 million shares worth about $1.5 billion.
Here is what Baron Health Care Fund had to say about UnitedHealth Group Incorporated (NYSE:UNH) in its Q1 2022 investor letter:
“UnitedHealth Group Incorporated is a leading diversified health and well- being company whose divisions include insurance arm UnitedHealthcare and Optum, which offers care delivery and other services. Shares increased on a fourth quarter beat and a reaffirmation of what is likely conservative guidance for 2022. We believe UnitedHealth leads the healthcare industry in innovation and execution, as evidenced by its strong value proposition leading to Medicare Advantage share gains, strong cost controls, and its leadership position in the shift to value-based care.”
1. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 110
JPMorgan Chase & Co. (NYSE:JPM) is a New York-based multinational investment bank and financial services corporation. JPMorgan Chase & Co. (NYSE:JPM) is one of the best stocks to buy for the next 50 years, as the aging population means there are more chances for wealthy clientele. The company is also positioned to benefit from the popular shift to digital banking. JPMorgan Chase & Co. (NYSE:JPM) is also a notable dividend stock. It is set to pay a quarterly dividend of $1 per share on July 31, to shareholders of record as of July 6. The stock delivers a dividend yield of 3.57%.
Citi analyst Keith Horowitz on July 12 upgraded JPMorgan Chase & Co. (NYSE:JPM) to ‘Buy’ from ‘Neutral’ with a price target of $135, down from $145. The analyst believes investors will “look to high-quality franchises with strong management teams and a sound balance sheet” in the present macro environment. JPMorgan Chase & Co. (NYSE:JPM) “fits this narrative” and with the year-to-date decline in the share price and an attractive valuation, JPMorgan Chase & Co. (NYSE:JPM) represents a good buying opportunity, the analyst told investors in a research note.
In Q1 2022, 110 hedge funds were bullish on JPMorgan Chase & Co. (NYSE:JPM), up from 107 funds in the preceding quarter. Ken Fisher’s Fisher Asset Management features as the leading stakeholder of the company, with 7.76 million shares worth over $1 billion.
Here is what Ariel Investments had to say about JPMorgan Chase & Co. (NYSE:JPM) in its Q4 2021 investor letter:
“In our view, inflation will not just be a 2021 phenomenon. Inflationary expectations are only now working themselves into the labor market with historically low unemployment, resurgent labor unions, and higher wages. These labor cost pressures are only starting to show up in the Consumer Price Index. The most recent Producer Price Index showed a +9% year over year increase, the highest since it was created in 2010. Higher input prices generally lead to rising consumer prices.
“In our view, inflation will not just be a 2021 phenomenon.”
Consumer balance sheets are in excellent shape with lower unemployment and banked stimulus checks. A recent analysis from JP Morgan Chase (JPM) showed average checking accounts have 50% higher balances than pre-Covid. The U.S. money supply as measured by M2 (a calculation that includes cash, checking accounts, and “near cash” such as money market securities) is up +38% versus year-end 2019. Higher consumer cash holdings and higher money supply mean more spending and demand for goods. Some emphasize supply issues to explain current inflation. Going forward, we see very strong demand as well, too much money chasing too few goods.”
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Disclosure: None. 10 Best Stocks to Buy for the Next 50 Years is originally published on Insider Monkey.
