In this article, we discuss 5 war stocks to buy now according to hedge funds. If you want to read our detailed analysis of these stocks, go directly to 10 War Stocks to Buy Now According to Hedge Funds.
5. Barrick Gold Corporation (NYSE:GOLD)
Number of Hedge Fund Holders: 46
Barrick Gold Corporation (NYSE:GOLD) is a resource firm with prime interests in gold and copper. The hedge fund sentiment around the stock is positive. At the end of the fourth quarter of 2021, 46 hedge funds in the database of Insider Monkey held stakes worth $958 million in Barrick Gold Corporation (NYSE:GOLD), compared to 41 the preceding quarter worth $917 million.
Interest in inflation hedges like gold was already benefiting Barrick Gold Corporation (NYSE:GOLD), but the war in Ukraine has helped push prices higher as more people across the world buy gold to safeguard against the developing economic situation in the US and Europe due to disruption of Russian exports.
In its Q4 2020 investor letter, GoodHaven Capital Management, an asset management firm, highlighted a few stocks and Barrick Gold Corporation (NYSE:GOLD) was one of them. Here is what the fund said:
“Barrick’s recent results have been consistent with our expectations. Barrick Gold Corporation (NYSE:GOLD) has begun inching up the dividend as planned, which should continue increasing absent them finding a large acquisition (they want more copper assets) or a materially lower price of gold. We’d also expect periodic special dividends during stronger gold price environments. At current gold prices we estimate normalized free cash flow at Barrick Gold Corporation (NYSE:GOLD) of over $1.60/share. The company is now about net-debt free. We see plenty of upside and absent a collapse in gold not too much downside. Missing from much of the public discussions about gold, but potentially interesting, is the supply/demand backdrop. As the Wall Street Journal (8/16/20) recently said “gold is amongst the rarest metals in the earth’s crust and much of the easier to get to ore has already been mined. What is left is harder to find and more expensive to extract…” According to the World Platinum Council, it was forecasted that there will be a supply and demand imbalance of 1.2 million ounces globally. The potential macro tailwinds that could add value to an alternate currency like gold including currency concerns, excessive debt and continuing negative real interest rates are still out there. While the shares performed well for the year they were weak in the second half and now stand more attractively priced.”
4. The Boeing Company (NYSE:BA)
Number of Hedge Fund Holders: 50
The Boeing Company (NYSE:BA) makes and sells military aircraft, satellites, and missile defense systems. The role that these systems play in modern military conflicts is crucial, as demonstrated by pleas made by Ukraine to the West for air and missile support against Russian aggression in urban centers. European nations near Ukraine are likely to buy more The Boeing Company (NYSE:BA) products amid the war to protect themselves.
Elite hedge funds are bullish on The Boeing Company (NYSE:BA). At the end of the fourth quarter of 2021, 50 hedge funds in the database of Insider Monkey held stakes worth $1.1 billion in The Boeing Company (NYSE:BA), the same as in the preceding quarter worth $1.4 billion.
In its Q1 2020 investor letter, Miller Value Partners, an asset management firm, highlighted a few stocks and The Boeing Company (NYSE:BA) was one of them. Here is what the fund said:
“We’ve known The Boeing Company (NYSE:BA) for a long time. It’s always been a high quality company that’s traded for a premium valuation owing to its position as a global duopoly. We’d looked at it recently after weakness due to its highly publicized Max 737 issues, but it never got cheap enough for us to pull the trigger. After the pandemic, the stock went into freefall as its customer bases’ business dried up and people worried about its liquidity. The stock fell from $338 on February 19th when the S&P hit its high to a low of $89. We bought the stock after the new CEO Dave Calhoun said publicly that it would not take government capital if it required equity dilution because it had many other options. Our average price is just above $120 where it was trading for less than 7x what it earned in 2018. It will likely take a while to normalize to those earnings levels, but this business will survive and ultimately we will own a leader in a global duopoly. Even on depressed forecasts, the company currently has about a 10-15% free cash flow yield. If and when the economy normalizes, we think The Boeing Company (NYSE:BA) could be worth more than double its current price.”
3. Raytheon Technologies Corporation (NYSE:RTX)
Number of Hedge Fund Holders: 50
Raytheon Technologies Corporation (NYSE:RTX) is an aerospace and defense firm. The stock has climbed more than 9% since the Russian invasion of Ukraine. Despite supply chain pressures, the company is likely to ride the boom in defense spending over the next few months as countries ramp up their military budgets to protect against Russian threats, especially in parts of Europe close to Ukraine that are US allies.
Hedge funds have been loading up on Raytheon Technologies Corporation (NYSE:RTX) stock as well. At the end of the fourth quarter of 2021, 50 hedge funds in the database of Insider Monkey held stakes worth $2.3 billion in Raytheon Technologies Corporation (NYSE:RTX), compared to 48 in the preceding quarter worth $2.2 billion.
In its Q4 2020 investor letter, Davis Funds, an asset management firm, highlighted a few stocks and Raytheon Technologies Corporation (NYSE:RTX) was one of them. Here is what the fund said:
“In today’s uncertain economy, we believe we have found such businesses trading at bargain prices in two sectors: industrials and financials. In the industrial space, concerns about the impact of the economic downturn on short-term profitability led to a wave of selling in a select group of leaders with durable competitive advantages, long records of profitability and bright long-term prospects. Companies like Raytheon Technologies is a wonderful example of attractive investments in this sector.”
2. Devon Energy Corporation (NYSE:DVN)
Number of Hedge Fund Holders: 51
Devon Energy Corporation (NYSE:DVN) is an independent energy company. At the end of the fourth quarter of 2021, 51 hedge funds in the database of Insider Monkey held stakes worth $1.7 billion in Devon Energy Corporation (NYSE:DVN), compared to 48 in the previous quarter worth $1.4 billion.
Energy prices have soared since the Russian invasion of Ukraine since Russia is one of the top energy exporters to Europe. Companies like Devon Energy Corporation (NYSE:DVN), already on a high amid rising inflation, are likely to ride this boom as alternative energy supplies are sought by Europe after sanctions on Russian exports.
In its Q4 2020 investor letter, GoodHaven Capital Management, an asset management firm, highlighted a few stocks and Devon Energy Corporation (NYSE:DVN) was one of them. Here is what the fund said:
“After a rough start to the year our two biggest energy holdings – WPX Energy rebounded materially in the last six months though energy was still our biggest detractor for the year. I’ve previously written about deciding earlier this year to direct new capital towards better businesses versus adding more to the energy sector, but given the material optionality at WPX, we opted to maintain a material exposure. Recently WPX announced an all stock merger with a larger competitor – Devon Energy Corporation (NYSE:DVN) – which will leave the new company with plenty of cash flow at lower oil prices, less leverage, and material upside to higher commodity prices.”
1. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 71
Exxon Mobil Corporation (NYSE:XOM) is an integrated oil and gas firm. Hedge funds have been piling into the stock. At the end of the fourth quarter of 2021, 71 hedge funds in the database of Insider Monkey held stakes worth $5.3 billion in Exxon Mobil Corporation (NYSE:XOM), compared to 64 in the previous quarter worth $4.6 billion.
Exxon Mobil Corporation (NYSE:XOM) stock has benefited from reports that the Biden administration is considering widespread sanctions against Russian oil imports, lifting crude prices to new highs. However, a new deal with Iran might offset some of these pressures as Iranian oil is pumped into the market.
In its Q1 2021 investor letter, Harding Loevner highlighted a few stocks and Exxon Mobil Corporation (NYSE:XOM) was one of them. Here is what the fund said:
“We felt that our remaining energy holding, Exxon Mobil Corporation (NYSE: XOM), with its stronger balance sheet, was in a better position to ride out the cyclical slump in oil demand and even perhaps take advantage of it by investing counter-cyclically. While Exxon Mobil Corporation (NYSE: XOM) does plan to increase capital expenditure, we’ve been disappointed in its regrettable failure to address ongoing emission trends, which reflects poorly on management’s foresight. As a result, we sold our Exxon Mobil Corporation (NYSE: XOM) holdings.”
You can also take a peek at 10 Stocks For Passive Income In 2022 and 10 Most Popular Green Energy Stocks Among Elite Hedge Funds.
