In this article, we discuss 10 stocks to buy now according to billionaire Ken Fisher.
Ken Fisher is a billionaire hedge fund manager and author born in 1950. His father, Phillip A. Fisher, was also an influential stock investor. Born in San Francisco, California, Fisher attended Humboldt State University to study forestry but graduated with an associate degree in economics in 1972. He founded the Fisher Investments with $250 in 1979. The asset management firm now has an asset under management (AUM) of over $197 billion belonging to corporations and high net worth individuals.
Fisher occupied the position of CEO for 37 years after the formation of the firm and presently serves as the Executive Chairman and co-Chief Investment Officer of Fisher Asset Management. Fisher also has the distinction of being the longest-running columnist in the history of Forbes magazine. His “Prestigious Strategy” column ran for over 32 years until 2016. He contributes monthly articles to major newspapers across Western Europe and Asia. Out of the 11 books he has authored, 4 have been New York Times bestsellers. He has also published numerous research papers and is considered an expert in the field of Behavioral Finance.
Fisher is 550th on the Forbes real-time billionaire list as of May 18. Through his theoretical work, he is considered the pioneer of the price-to-sales (P/S) ratio. The ratio has become a benchmark instrument in the valuation of companies.
Investment Philosophy of Ken Fisher
Ken’s investment philosophy reflects that following the herd does not get you ahead and that the Street’s “Wisdom” is always right. Secondly, the prices of shares and bonds are determined by the forces of demand and supply. In the short-term, demand factors like fundamentals, sentiments, and geopolitical tensions come into play. Meanwhile, supply-related factors come into play in the long run, which means that IPOs, secondary offerings, and stock-for-stock mergers can cause an oversupply. The investment philosophy also sheds light on an effective asset allocation strategy. It is an integral factor in determining the return of a portfolio. Fisher has been of the opinion that global diversification is preferable, and no investment remains superior forever. The hedge fund believes that it is difficult to time the market on a daily, weekly, or monthly basis, but cyclical changes can be forecasted. The game of stocks is forward-looking, but investors have a bias toward looking at the past.
To outperform the market, a shrewd investor needs to look beyond the news. This can be gauged by the fact that the stock prices move very swiftly after a major development like an earnings release or a merger. Amongst the popular companies Ken Fisher has a stake in are Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN) as of Q1 2022.
Our Methodology:
We have picked the top ten stocks from Fisher Asset Management’s Q1 2022 portfolio. We analyzed the stocks using hedge fund data, earnings reports, and business fundamentals.
The hedge fund information is based on the 924 hedge funds tracked by Insider Monkey at the end of Q4 2021.
10. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Fisher Asset Management’s Stake Value: $2,730,426,000
Percentage of Fisher Asset Management’s 13F Portfolio: 1.61%
Number of Hedge Funds as of December 31: 72
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is a Hsinchu, Taiwan-based foundry firm established in 1987. The company is involved in the designing and manufacturing of semiconductors, with operations spread across Asia, Europe, and North America. During Q1 2022, Fisher Asset Management increased its stake in the company by 1%.
Taiwan Semiconductor Manufacturing Company Limited informed its clients that it would increase the prices of its chips for the second time in less than 12 months due to higher costs, inflation concerns, and the company’s plan to expand its manufacturing facilities globally to fight supply chain-related concerns. The new prices will be effective from the start of next year.
Wedgewood Partners shared its insights on Taiwan Semiconductor Manufacturing Company Limited in its Q1 2022 investor letter. Here’s what it said:
“Taiwan Semiconductor pulled back on geopolitical concerns and periodic market fears about the end of the “cycle” in semiconductors. First, we think the Company might be one of the most – if not the most – important Companies in the world. Taiwan Semiconductor Manufacturing Company Limited has a near-monopoly on semiconductor processing at advanced nodes, which makes it irreplaceable to customers such as Apple, AMD, NVIDIA, Mediatek, Amazon, and even Intel. Second, much less important manufacturers have more direct geopolitical risk than Taiwan Semiconductor, yet they trade at substantial premiums – both multiple and market cap. For example, Tesla is a heavy manufacturer of only about 1 million automobiles with significant production capacity located in the heart of China, yet it trades at double the market cap of Taiwan Semiconductor. Third, while it is hard to know when the current semiconductor “cycle” will slow or end, we see very few signs of it, as Taiwan Semiconductor continues to generate bookings well in excess of its current capacity – unlike any previous cycle. Taiwan Semiconductor traded to levels that are much too pessimistic given its competitive positioning and opportunity for growth driven by a more robust semiconductor cycle, driven by high-performance computing. As such, we added to our position during the quarter.”
As of Q4 2021, 72 hedge funds reported owning a stake in Taiwan Semiconductor Manufacturing Company Limited.
9. American Express Company (NYSE:AXP)
Fisher Asset Management’s Stake Value: $2,933,385,000
Percentage of Fisher Asset Management’s 13F Portfolio: 1.73%
Number of Hedge Funds as of December 31: 64
American Express Company (NYSE:AXP) is a Buffalo, New York-based company that specializes in payment card services. The company had over 112 million cards in circulation as of 2020. In terms of the number of shares, Fisher Asset Management’s holding in American Express Company is at its highest level with 15.68 million shares during Q1 2022.
In Q1 2022, American Express Company recorded an EPS of $2.73, beating the analysts’ estimates of $2.47. Moreover, the company also beat the revenue forecast by $76.01 million. American Express Company’s forward dividend yield stands at 1.29% as of May 18.
However, Bill Carache at Wolfe Research downgraded the stock from an Outperform to a Peer Perform rating in a note issued to investors on May 12. Mr. Carache slashed the target price from $213 to $146, which reflects a potential downside of 9.8% from the previous closing price. Overall, the analyst downgraded the credit card issuing group from a Market Weight to an Underperform rating due to the high chances of a recession. The analyst has modeled an 80% chance of recession by 2024. This is because credit card issuing companies like American Express Company are more exposed to prime and super-prime credit.
8. Visa Inc. (NYSE:V)
Fisher Asset Management’s Stake Value: $2,944,987,000
Percentage of Fisher Asset Management’s 13F Portfolio: 1.73%
Number of Hedge Funds as of December 31: 142
Visa Inc. (NYSE:V) is the biggest payment processor in the world. Last year, through its operations spread around 200 countries, the San Francisco, California-based company processed nearly $10 trillion in transactions through its credit, debit, and prepaid cards. Visa Inc. has over 1.141 billion credit cards in circulation across the globe.
Will Nance at Goldman Sachs commenced coverage on Visa Inc. with a Buy rating and a target price of $282. The analyst also highlighted that the stock is a part of the Americas Conviction List. Nance thinks that Visa Inc. would be less effective in an economic downturn due to its higher exposure to debit cards. Due to the decline in the stock price in the last six months, Visa Inc. is in a position to navigate through high inflation and low growth period without a major correction.
Visa Inc.’s stock price is down over 19% from its 52-week high. Fisher Asset Management has decreased its holding in Visa Inc. by 15% during Q1 2022.
Baron Funds mentioned Visa Inc. in its Q1 2022 investor letter. Here’s what the firm said:
“Shares of global payment network Visa, Inc. were up 2.5% on strong quarterly results with 24% revenue growth and 27% EPS growth. Payment volume grew 20% with notable strength in cross-border volumes as travel activity rebounded from depressed levels. Management raised full-year guidance to reflect high-teens revenue growth. Shares also likely benefited from a “flight to safety” during a volatile quarter for equities. We continue to own the stock due to Visa’s long runway for growth underpinned by the continued migration from cash transactions to card/digital and strong competitive advantages, operating in a duopoly with Mastercard.”
7. ASML Holding N.V. (NASDAQ:ASML)
Fisher Asset Management’s Stake Value: $2,969,425,000
Percentage of Fisher Asset Management’s 13F Portfolio: 1.75%
Number of Hedge Funds as of December 31: 40
ASML Holding N.V. (NASDAQ:ASML) is another stock in Ken Fisher’s portfolio that is a part of the microchip value chain through its lithography technology. The technology is employed to manufacture computer chips. The Netherlands-based company is the biggest supplier of photolithography systems globally. Fisher Asset Management has a stake worth over $2 billion in the company, reflecting 1.75% of the overall portfolio.
Senior Research Analyst Kinngai Chan at Summit Insights gave a Buy rating on ASML Holding N.V. stock. The analyst thinks the company is well-positioned in the medium to long-term as strong demand is expected for extreme-ultraviolet lithography (EUV) photolithography technology and ASML Holding N.V. is the only supplier of this technology. Meanwhile, in the near term, the company is expected to reap benefits from the strength of deep ultraviolet (DUV) tools. As the industry is expected to switch towards higher bandwidth memory, it would transition to EUV technology, which would play in favor of ASML Holding N.V..
ClearBridge Investments discussed its stance on ASML Holding N.V. in its Q1 2022 investor letter. Here’s what it said:
“During the quarter, we reduced our semiconductor exposure through the trim of ASML (NASDAQ:ASML) to manage concerns of a slowdown due to the risk of double ordering and potential softness in some consumer end markets. We increased our position in IT services with the purchase of Accenture as we remain optimistic about the long-term growth potential these companies provide, which is underpinned by the compressed digital transformation cycle, rising cloud adoption and growth in data-driven insights.
Despite the market volatility and hyper focus on rising rates, chief information officer surveys continue to forecast resilience in IT budgets this year. Growth in IT spending for 2022 is expected to remain above the 10-year pre-COVID-19 average, according to Morgan Stanley. We believe this is a result of the strong secular underpinnings brought on by digital transformation and businesses focusing on increasing efficiencies through technology.”
6. Adobe Inc. (NASDAQ:ADBE)
Fisher Asset Management’s Stake Value: $2,980,917,000
Percentage of Fisher Asset Management’s 13F Portfolio: 1.75%
Number of Hedge Funds as of December 31: 94
Adobe Inc. (NASDAQ:ADBE) is a Mountain View, California-based software company that specializes in content creation and publication services through its flagship offerings in the form of Adobe Illustrator, Adobe Photoshop, and Adobe Reader.
During Q1 2022, Fisher Asset Management reduced its holding in the company by 3%. In the past 14 consecutive quarters, the hedge fund has been increasing its holding in Adobe Inc., and this is the first instance where it has reduced its exposure to Adobe.
Adobe Inc. is pivoting into a subscription software as a service (SaaS) by bundling its offerings and rolling it out as Adobe Creative Cloud. For Q1 2022, Adobe Inc. posted revenue of $4.26 billion, beating the analysts’ estimates by $23.79 million.
In its Q1 2022 investor letter, Barron Funds discussed its stance on Adobe Inc.. Here’s what the fund said:
“Shares of Adobe Inc., the leading provider of content creation, document management, and marketing software, were weak in the quarter, down 19.7% along with the overall software industry. Continued investor fears around the possibility of pandemic-driven pullforward in demand, increasing competition, and earnings results that were in line with expectations also weighed on shares. While Adobe is seeing slower year-over-year volume growth due to tougher compares, it continues to execute well, with management calling out strong engagement and retention rates in Digital Media, in line with pre-COVID levels while the company continues innovating rapidly, broadening its offering. We continue to believe that Adobe is well positioned given its marquee brand and best-in-class technology, which helps content creators and marketing professionals better reach, communicate, and sell their companies’ products in an increasingly digitally connected world.”
Of the 924 hedge funds in Insider Monkey’s database, 94 reported owning a stake in Adobe Inc. at the end of Q4 2021.
In addition to Adobe Inc., popular stocks such as Apple Inc., Microsoft Corporation, and Amazon.com, Inc. are amongst the 10 best stocks to buy now according to billionaire Ken Fisher.
5. Salesforce, Inc. (NYSE:CRM)
Fisher Asset Management’s Stake Value: $3,234,635,000
Percentage of Fisher Asset Management’s 13F Portfolio: 1.9%
Number of Hedge Funds as of December 31: 110
Salesforce, Inc. (NYSE:CRM) is a San Francisco, California-based provider of cloud-based customer relationship management tools focused on application development, analytics, customer service, marketing automation, and sales. During the first quarter of 2022, Ken Fisher increased his stake in Salesforce, Inc. by 5%. The current holding of Fisher Asset Management in Salesforce, Inc. is the highest in terms of the number of shares.
In a note issued to investors on May 18, Richard Baldry at Roth Capital upgraded Salesforce, Inc. stock from a Neutral to a Buy rating and increased the target price from $200 to $242. The revised target price provides a potential upside of over 47.80% from the last closing price.
Investment management firm Oakmark Funds shared its insights on Salesforce, Inc. in its Q1 2022 investor letter:
“Over the past 20 years, Salesforce (NYSE:CRM) has become a dominant global player in sales, customer service, commerce and marketing software. CRM earns 80% gross margins, grows 20% organically and virtually all of its revenue is recurring. It’s a great business that we’ve admired from afar for a long time. More recently, the organization has made some changes at the top that prompted us to take a closer look at the stock. New CEO Bret Taylor and CFO Amy Weaver are bringing a culture of financial discipline. We believe this renewed focus on profitability, combined with Salesforce’s strong underlying business characteristics, will yield strong results. The current valuation of 5x next year’s revenues represents a significant discount compared to publicly traded comparables and private market values in the software space. We view this discount as an opportunity to invest in a great business at a good value.
4. Alphabet Inc. (NASDAQ:GOOG)
Fisher Asset Management’s Stake Value: $5,634,988,000
Percentage of Fisher Asset Management’s 13F Portfolio: 3.32%
Number of Hedge Funds as of December 31: 158
Alphabet Inc. (NASDAQ:GOOG) is another prominent tech stock in the top 10 holdings of Fisher Asset Management. The Mountain View, California-based diversified tech conglomerate firm, is the parent of Google and is involved in various industries ranging from artificial intelligence, autonomous vehicles, cloud computing, and its core business of performance advertising. Fisher Asset Management is long over 2 million shares of Alphabet Inc., with a stake worth over $5.6 billion as of Q1 2021.
During the I/O event on May 11, Alphabet Inc. introduced Google Pixel Watch. This is the first watch brought forward by the tech giant to the market following the acquisition of Fitbit in January 2021.
Alphabet Inc. was mentioned in the Q1 2022 investor letter of Farrer Wealth Advisors. Here’s what the firm had to say about the company:
“Alphabet: We won’t waste much time trying to explain to our clients why Alphabet is such a phenomenal business, we believe that is quite self-evident. The better explanation is why we never bought Alphabet before. The reason was a personal bias we held based on three beliefs (which we now believe to be incorrect)
Growth in YouTube would stall as the increased ad-load would turn-off viewers (the double ad-load at the beginning of videos for example). Consumers will focus on discovery rather than search to purchase new items. For example – using Instagram/TikTok to decide what new clothes to buy instead of ‘googling’ for clothes. Other Bets: In general, we felt that capital spent on “Other Bets” has been a bit wasteful with the segment earning just around $3.1bn in revenue versus nearly $21bn in operating losses over the last five years…” (Click here to see the full text)
Out of the 924 funds being tracked by Insider Monkey, 158 funds held a stake in Alphabet Inc. at the end of Q4 2021.
3. Amazon.com, Inc. (NASDAQ:AMZN)
Fisher Asset Management’s Stake Value: $7,703,509,000
Percentage of Fisher Asset Management’s 13F Portfolio: 4.54%
Number of Hedge Funds as of December 31: 279
Amazon.com, Inc. is a Seattle, Washington-based e-commerce company that has branched out into artificial intelligence, cloud computing, digital streaming, and electric vehicles. During Q1 2022, Fisher Asset Management increased its stake in Amazon.com, Inc. by 10%, which is the biggest increase in holdings among the top 10 holdings.
Miller Value Partners discussed its stance on Amazon.com, Inc. in its Q1 2022 investor letter. Here’s what is said:
“For frame of reference, Amazon (NASDAQ:AMZN) bottomed at the same valuation in the financial crisis (side note: Amazon bottomed at 4x EV/GP after the tech bubble burst)! So there’s historical precedent for the lows being in. We will see whether that holds true this time. Regardless, we think there’s significant upside over a 5-year time horizon. The one other topic I want to briefly address is our volatility. We hope to write something about the topic in more depth in the future, but we want our clients and prospective investors to understand our views on it. We think that volatility is significantly misunderstood. We believe it creates opportunities from which we can profit.”
As of Q4 2021, 279 hedge funds held a stake in Amazon.com, Inc..
2. Microsoft Corporation (NASDAQ:MSFT)
Fisher Asset Management’s Stake Value: $8,593,198,000
Percentage of Fisher Asset Management’s 13F Portfolio: 5.06%
Number of Hedge Funds as of December 31: 262
Microsoft Corporation is a Redmond, Washington-based tech company that is involved in software, consumer electronics, personal computers, and related services. The company was founded in Albuquerque, New Mexico, by Bill Gates and Paul Allen back in 1975.
During Q1 2022, Fisher Asset Management raised its stake in Microsoft Corporation by 4%. This is the ninth consecutive quarter that the hedge fund has increased its total number of shares in the company, and its weightage on the overall portfolio is also at its highest level.
The shares of Microsoft Corporation are experiencing a pullback due to the weakness in the overall market. In a note issued to investors on May 13, Ivan Feinseth at Tigress Financial reiterated a Buy rating on the stock with a price target of $411.
Here’s what Motiwala Capital said about Microsoft Corporation in its Q4 2021 investor letter:
“Microsoft (NASDAQ:MSFT) re-enters our portfolio after a long gap. MSFT sells enterprise and consumer software products as well as hardware products such as the Xbox video game console and Surface laptops. All business segments experienced double-digit revenue growth and earnings per share have compounded in the mid-double digits over the last 5 years. We believe MSFT continues this momentum in the years ahead.”
1. Apple Inc. (NASDAQ:AAPL)
Fisher Asset Management’s Stake Value: $11,166,276,000
Percentage of Fisher Asset Management’s 13F Portfolio: 6.58%
Number of Hedge Funds as of December 31: 134
Apple Inc. is the biggest holding in Ken Fisher’s portfolio. Fisher Asset Management has a stake worth over $11 billion in the company as of Q1 2022. The hedge fund initiated a position in Apple Inc. in Q4 2010.
Apple Inc. is in the news these days for replacing its conventional lightning charging port with the more prevalent USB-C connector. This could help Apple Inc. in overcoming expected regulations in the EU. The iPhone 15 is expected to be the first phone with a USB-C connector.
Berkshire Hathaway discussed its stance on Apple Inc. in its Q4 2021 investor letter. Here’s what it said:
“Apple Inc. – our runner-up Giant as measured by its yearend market value – is a different sort of holding. Here, our ownership is a mere 5.55%, up from 5.39% a year earlier. That increase sounds like small potatoes. But consider that each 0.1% of Apple’s 2021 earnings amounted to $100 million. We spent no Berkshire funds to gain our accretion. Apple’s repurchases did the job. It’s important to understand that only dividends from Apple are counted in the GAAP earnings Berkshire reports – and last year, Apple paid us $785 million of those. Yet our “share” of Apple’s earnings amounted to a staggering $5.6 billion. Much of what the company retained was used to repurchase Apple shares, an act we applaud. Tim Cook, Apple’s brilliant CEO, quite properly regards users of Apple products as his first love, but all of his other constituencies benefit from Tim’s managerial touch as well.”
At the end of Q4 2021, Apple Inc. was held by 134 hedge funds.
You can also take a peek at the 12 Best American Stocks To Buy in 2022 and 15 Most Valuable E-Commerce Companies.
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This article is originally published at Insider Monkey.
