5 Safe Stocks to Buy According to Hedge Funds

In this article, we take a look at the 5 safe stocks to buy according to hedge funds. If you want to read our detailed analysis of safe stocks, go directly to see the 12 Safe Stocks to Buy According to Hedge Funds.

5. Danaher Corporation (NYSE:DHR)

Beta Value: 0.82
Number of Hedge Fund Holders: 89

Danaher Corporation (NYSE:DHR) is a medical corporation that develops, produces, and sells professional, medical, industrial, and commercial products and services. It works in three divisions: Life Sciences, Diagnostics, and Environmental & Applied Solutions.

Danaher Corporation (NYSE:DHR) has a consensus recommendation of “Moderate Buy” from 12 Wall Street analysts, which is based on 8 buy ratings, 4 hold ratings, and 0 sell opinions. Danaher Corporation (NYSE:DHR)’s Forward P/E ratio is 24.33. Danaher is selling at a premium to the group compared to its industry, which has an average Forward P/E of 12.79.

According to Insider Monkey’s data, 89 hedge funds were bullish on Danaher Corporation (NYSE:DHR) at the end of third quarter of 2022, compared to 82 funds in the second quarter. Fisher Asset Management is the most significant position holder in Danaher Corporation (NYSE:DHR), with 3.94 million shares worth $1.02 billion.

Here is what Stewart Asset Management, an investment management firm, said about Danaher Corporation (NYSE:DHR) in its Q3 2022 investor letter:

“We also need to point out one global consequence of the rapid rise in interest rates: an irrepressibly strong dollar. This hurts the reported earnings of U.S. companies who sell their goods and services overseas. Foreign currency earnings translate into fewer dollars and thus lower earnings. Most of the companies in your portfolios gain a notable amount of earnings from their international operations. While the strength or weakness of a currency doesn’t change the quality of a business or its longer-term earnings power, it can change the reported earnings of a company over short periods of time. It is difficult to forecast this effect accurately because many of our companies manufacture where they sell, which to some extent dulls the sharp negative effect of a surging dollar. Danaher (NYSE:DHR), among others, is a good example.”

4. Activision Blizzard, Inc. (NASDAQ:ATVI)

Beta Value: 0.43
Number of Hedge Fund Holders: 96

Activision Blizzard, Inc. (NASDAQ:ATVI) is a video game holding corporation in Santa Monica, California, US. Some of the top-grossing video games in the world have been created and published by ATVI. It has a diverse portfolio that is balanced across several platforms and genres. Call of Duty, Warcraft, Starcraft, Diablo, Candy Crush Saga, and Overwatch are among its best-known brands.

The company’s balance sheet is quite appealing, with a free cash flow of $1.67 billion. Over the last five years, Activision Blizzard, Inc. (NASDAQ:ATVI)’s debt-to-equity ratio has decreased from 44% to 19.2%. Despite its lackluster performance, Activision Blizzard still pays a $0.47 dividend. The yearly dividend yield for ATVI is 0.61%.

According to Insider Monkey’s data, Activision Blizzard, Inc. (NASDAQ:ATVI) was part of 96 hedge fund portfolios at the end of Q3 2022, compared to 84 in the earlier quarter. Warren Buffett’s Berkshire Hathaway is the company’s biggest stakeholder, with 60.14 million shares worth $4.47 billion.

Cooper Investors discussed Activision Blizzard, Inc. (NASDAQ:ATVI) shares in its Q2 2022 investor letter. Here is what the fund said:

“Activision Blizzard, Inc. (NASDAQ:ATVI) – our investment preceded news that the company was under investigation for workplace bullying. When it became clear management had misled the market on the extent of the problem we sold, led by our principles of Responsible Investing. We did not benefit from the subsequent M&A premium paid by Microsoft.”

3. T-Mobile US, Inc. (NASDAQ:TMUS)

Beta Value: 0.56
Number of Hedge Fund Holders: 100

T-Mobile US, Inc. (NASDAQ:TMUS) and its subsidiaries provide mobile communications services in the United States, Puerto Rico, and the US Virgin Islands. Our lives depend on wireless devices, which is the company’s area of expertise. The company shares have offered investors more than 37.48% in returns over the past twelve months. Therefore T-Mobile US, Inc. (NASDAQ:TMUS) is one of the safe stocks to buy for the long term.

T-Mobile is the third-largest wireless provider in the United States after merging with Sprint in 2020. The company is also thinking about buying Mint Mobile, a supplier of low-cost cellphone plans with the ambition to strengthen its position in the cellular network industry.

On January 5, JPMorgan analyst Philip Cusick maintained an “Overweight” rating and $200 price objective on T-Mobile US, Inc. (NASDAQ:TMUS). T-Mobile is Cusick’s favorite communications services stock and the best long-term idea.

The number of hedge funds tracked by Insider Monkey having stakes in T-Mobile US, Inc. (NASDAQ:TMUS) grew to 100 in Q3 from 96 in the preceding quarter. These stakes hold a consolidated value of $5.38 billion, up from $6.86 billion. Berkshire Hathaway is the leading shareholder of T-Mobile US, Inc. (NASDAQ:TMUS), with 5.24 million shares worth over $703.32 million.

ClearBridge Investments mentioned T-Mobile US, Inc. (NASDAQ:TMUS) in its Q4 2021 investor letter. Here is what the fund said:

“As mentioned, the communication services sector has come under some pressure, and irrational pricing competition has negatively impacted wireless industry growth and profitability of late, weighing on T-Mobile. Faced with these headwinds, and with pressure from other wireless carriers and cable companies that could cause the company to cede share in subscriber growth in 2022, we exited our position in the fourth quarter.”

2. Berkshire Hathaway Inc. (NYSE:BRK-A)

Beta Value: 0.90
Number of Hedge Fund Holders: 104

Berkshire Hathaway Inc. (NYSE:BRK.A) is a conglomerate that controls around 60 subsidiary firms, including auto insurance colossus GEICO, rail transport company BNSF, and battery manufacturer Duracell.

Due to its diversification and lower overall risk profile, Berkshire Hathaway Inc. (NYSE:BRK.A) has one of the superior risk-adjusted return profiles. Additionally, Berkshire has a sizable stock portfolio that includes substantial holdings in well-established companies like Apple (NASDAQ:AAPL), Bank of America (NYSE:BAC), Coca-Cola (NYSE:KO), and many others. As a result, Warren Buffett’s firm makes a fantastic candidate for downside security.

At the end of Q3 2022, 104 hedge funds owned a stake in Berkshire Hathaway Inc. (NYSE:BRK.A), down from 109 in the preceding quarter. Michael Larson’s Bill & Melinda Gates Foundation Trust held a significant stake in Berkshire Hathaway Inc. (NYSE:BRK.A)) at the end of the third quarter of 2022, worth $7.93 billion.

Here is what Black Bear Value Fund has to say about Berkshire Hathaway Inc. (NYSE:BRK-A) in its Q3 2022 investor letter:

“Going forward I expect Berkshire to compound at above average returns from this price. BRK is a collection of high-quality businesses, excellent management, and a good amount of optionality in their cash position. If the cash were to be deployed accretively, the true value would be greater than an 8% premium (as mentioned above). The combination of a pie that is growing, an increasing share of said pie due to stock buybacks, upside optionality from cash and a tight range of likely business outcomes that span a variety of economic futures gives me comfort in continuing to own Berkshire.”

1. UnitedHealth Group Incorporated (NYSE:UNH)

Beta Value: 0.73
Number of Hedge Fund Holders: 110

The Minnesota-based UnitedHealth Group Incorporated (NYSE:UNH) is the world’s largest healthcare firm by revenue and the largest insurance company by net premiums. It specializes in both individual and group health insurance. On January 17, Joseph France an analyst at Loop Capital reiterated a ‘Buy’ rating on UnitedHealth Group Incorporated (NYSE:UNH)’s stock while increasing his price objective from $575 to $590. The analyst justified the target increase by pointing to the company’s “strong” Q4 performance and 2023 forecast.

UnitedHealth Group Incorporated (NYSE:UNH) stock has risen 2.97% over the past 12 months, exceeding the S&P 500 index, which has fallen 13.32% in the same period. Additionally, the business has been increasing EPS at a pace of over 13.7% annually. Over the next five years, analysts predict an average annual profits increase of 14.2%. In addition, the firm has gradually raised dividends for years, and it currently pays a dividend yield of 1.39%.

Hedge funds are loading up on UnitedHealth Group Incorporated (NYSE:UNH), as Insider Monkey’s data shows that 110 hedge funds held a stake in the company as of the end of the third quarter of 2022, compared to 91 funds at the end of the previous quarter.

Here is what Stewart Asset Management has to say about UnitedHealth Group Incorporated (NYSE:UNH) in its Q3 2022 investor letter:

“Looking at the Great Recession which began at year-end 2007 and lasted to mid-year 2009 is helpful too. Our four largest current holdings in the portfolio weathered that period well. UnitedHealth’s (NYSE:UNH) earnings were resilient. While it reported modestly down earnings in 2008, its earnings rebounded quickly to record highs in 2010 and the shares responded strongly in anticipation of this.”

Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily newsletter to get  the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also check out our articles on 15 Best Growth Stocks to Buy According to Hedge Funds and 11 Best Small Cap AI Stocks to Invest In.