In this article, we will be taking a look at the seven stocks billionaire Ken Fisher and Bill Gates love. To skip our detailed analysis of the stock portfolio performance of Fisher Asset Management and Bill & Melinda Gates Trust, you can go directly to see Billionaire Ken Fisher and Bill Gates Love These 4 Stocks.
Learning how to invest in a volatile market like the one we’re seeing in 2023 can be a challenging endeavor for most investors. This is why learning by example can be a good option for most, especially new, investors. Those who have managed to build sustainable and profitable stock portfolios over a prolonged period of time, such as Ken Fisher or Michael Larson on behalf of Bill Gates, can act as good examples to follow if you’re a beginner investor who’s just starting out and trying to figure out where to put your money. These individuals barely need any introduction because of their work in the investing community, but to put it briefly, Fisher is a renowned billionaire investor who founded Fisher Asset Management in 1979 and, since then, has set historical precedents in the world of investing with his outperformance of the broad US stock market for almost two decades. On the other hand, Michael Larson is the chief money manager for the billionaire founder of Microsoft Corporation (NASDAQ:MSFT) and the Bill & Melinda Gates Foundation Trust. Larson is considered to be the man behind Gates’ ever-growing fortune. The stock portfolios managed by both of these investors are worth taking a good look at, considering their ample experience in the area and their sustained success.
Fisher On Positioning Yourself For a Market Rebound
A look at Fisher’s investing history shows his sharp intuition and ability to prepare himself for market developments. Considering how the stock market has been seeing an August sell-off, one area investors might be confused about today is how they should prepare themselves for a market rebound after this sell-off, and Fisher has specific advice for just this question. This February, he explained how investors should position themselves for a new bull market after a tough cycle:
“The categories that dropped the most in the bear market tend to bounce the most in, roughly, the first third of the next bull market, however long that subsequent bull market may last.”
Fisher’s analysis above was based on the market period between October 2022 and February 2023. He noted that in this time, things that “fell the most” were mostly growth stocks and tech stocks, while those that did well included energy stocks, for example. According to his analysis, energy stocks would end up doing poorly in the new bull market, while growth stocks and tech stocks would end up doing well. As we saw in June, the S&P 500 energy sector was down by almost 10%, while the technology sector was outperforming the broader benchmark. Noting this state of the market, a few more of Fisher’s comments become relevant:
“Normal human instincts say, ‘I wanna buy and own the things that didn’t do badly in the bear market.’ The fact of the matter is, those things that did well in the bear market, like energy, tend to do badly in the bounce.”
Based on Fisher’s advice, investors preparing for the market rebound after the August sell-off can perhaps benefit from keeping an eye on which stocks and sectors are doing well or doing poorly during this period in preparation for the eventual market rebound.
Gates on AI and Clean Energy
While Fisher is offering updated advice on how to meticulously prepare yourself for shifting stock market trends, Gates is shedding some light on worthwhile areas of investment with his own focus on certain key fields. For instance, over the past several years, Gates has been heavily investing in clean energy generation, and he has also recently been discussing artificial intelligence and its potential to change the tech world forever. In 2015, Gates founded Breakthrough Energy, a company aiming to accelerate innovation in sustainable energy and other tech to reduce the emission of greenhouse gases and their impact on the environment. Gates talked about this company with Morgan Stanley’s Chief Equity Strategist in India, Ridham Desai, just this August. He noted that Breakthrough Energy is committed to developing technologies that can help developing countries focus on green energy efforts without having to pay a “green premium,” which is basically a higher cost for adhering to generally environmentally friendly alternatives in things like making steel and cement, for instance. The fact that it is more expensive for developing countries to adhere to climate-friendly options in certain industries makes it harder for them to take the green energy agenda forward, which is where Breakthrough Energy is supposed to come in, according to Gates.
Apart from green energy, Gates is also showing immense interest in AI today, especially in OpenAI’s ChatGPT, which he likened to the graphical user interface he was introduced to in 1980, which went on to become “the forerunner of every modern operating system, including Windows.” In his blog post this March, Gates noted the immense potential of AI, stating further that the Gates Foundation would have “much more to say about AI” in the coming months” to make it a technology that can benefit not just those who are well off, but all individuals equally.
All in all, considering the opinions of renowned individuals in the investing and business communities today can be a vital exercise for beginner investors looking for investing advice. Gates and Fisher both have stellar portfolios made up of well-known names such as Caterpillar Inc. (NYSE:CAT), Microsoft Corporation (NASDAQ:MSFT), and Walmart Inc. (NYSE:WMT), which are behind their wealth and fame. We have thus gone through Bill Gates’ stock portfolio for 2023 alongside Fisher’s portfolio to show which names they have in common as a starting point for new investors. This required us to take a look at Gates’ and Fisher’s most recent investments for the second quarter.
Our Methodology
We went through the updated second-quarter stock portfolios of Fisher Asset Management and Bill & Melinda Gates Foundation Trust to find stocks both portfolios had in common. We then ranked these stocks based on the combined stake value of both portfolios, from the lowest to the highest. We also mentioned Insider Monkey’s hedge fund data for the second quarter for each stock listed.
Billionaire Ken Fisher and Bill Gates Love These Stocks
7. Anheuser-Busch InBev SA/NV (NYSE:BUD)
Fisher Asset Management’s Q2 2023 Stake: $96.6 million
Bill & Melinda Gates Trust’s Q2 2023 Stake: $555.5 million
Number of Hedge Fund Holders: 19
Anheuser-Busch InBev SA/NV (NYSE:BUD) is a consumer staples company that produces, distributes, markets, and sells beer and beverages. The company is based in Leuven, Belgium. It has a portfolio of about 500 beer brands, including Budweiser, Corona, and Stella Artois.
On July 20, Sarah Simon, an analyst at Morgan Stanley, upgraded shares of Anheuser-Busch InBev SA/NV (NYSE:BUD) from Equal Weight to Overweight. The analyst also raised her price target on the stock from $64 to $68.5.
Anheuser-Busch InBev SA/NV (NYSE:BUD) was seen in the portfolios of 19 hedge funds in the second quarter. Their total stake value in the company was $292 million.
Bill & Melinda Gates Foundation Trust was the largest shareholder in Anheuser-Busch InBev SA/NV (NYSE:BUD) at the end of the second quarter, holding 1.7 million shares.
Broyhill Asset Management made the following comments about Anheuser-Busch InBev SA/NV (NYSE:BUD) in its second-quarter 2023 investor letter:
“The largest detractors to performance over the quarter were First Horizon Corp (FHN), Anheuser-Busch InBev SA/NV (NYSE:BUD), and Bayer (BAYRY). Problems at Anheuser Busch InBev began on April 1 with Dylan Mulvaney’s social media post, which ignited a fiery backlash amongst Bud Light customers across ‘Merica. With volumes down sharply, and competitors gaining share at BUD’s expense, operational deleveraging is set to weigh heavily on US margins amid peak demand pressure in the second quarter. Despite severe US headwinds (second-quarter operating profit maybe half of last year’s levels), we still expect BUD to grow consolidated operating profit at a mid-single-digit rate for the full year. With current issues well understood and investor sentiment in the gutters, we see significant upside in a stock, which is approaching a double-digit FCF yield. With FX headwinds and rising input costs reversing course, increasing margins are likely to drive positive surprises into FY24 as continued deleveraging accrues more value to shareholders.”
Like Caterpillar Inc. (NYSE:CAT), Microsoft Corporation (NASDAQ:MSFT), and Walmart Inc. (NYSE:WMT), Anheuser-Busch InBev SA/NV (NYSE:BUD) is a stock Gates and Fisher have invested heavily in.
6. Crown Castle International Corp. (NYSE:CCI)
Fisher Asset Management’s Q2 2023 Stake: $161.8 million
Bill & Melinda Gates Trust’s Q2 2023 Stake: $543.9 million
Number of Hedge Fund Holders: 41
Marie Ferguson, an analyst at Argus Research, initiated coverage on shares of Crown Castle International Corp. (NYSE:CCI) with a Buy rating on August 2. The analyst also announced a price target of $140 on the stock.
Crown Castle International Corp. (NYSE:CCI) is a telecom tower real estate investment trust company. It is based in Houston, Texas. The company owns, operates, and leases more than 40,000 cell towers and about 85,000 route miles of fiber supporting small cells and fiber solutions across major US markets.
We saw 41 hedge funds holding stakes in Crown Castle International Corp. (NYSE:CCI) at the end of the second quarter, with a total stake value of $728 million.
This is what Aristotle Atlantic Partners had to say about Crown Castle International Corp. (NYSE:CCI) in its second-quarter 2023 investor letter:
“Crown Castle, the largest U.S. provider of shared communications infrastructure—cell towers, small cells and fiber—was the largest detractor from performance. The company reported a decline in fiber revenue and a deceleration in tower sales growth during the quarter after record network spending by wireless carriers in 2022 (related to the ongoing rollout of 5G). We continue to appreciate the benefits of management’s differentiated strategy to remain 100% focused on the U.S. while many competitors have instead sought to expand their tower businessesinternationally. We believe Crown Castle’s approach delivers a compelling value proposition as the company’s customers seek to utilize shared infrastructure while making multi‐ billion‐dollar investments in spectrum assets. Although carriers have generally pulled back from network spending this year, we continue to find the structure of Crown Castle’s tower business attractive. This includes the ability to implement a nearly 3% annual price escalator on tower rental rates, the low capital investment needed to maintain its towers and sticky customers with an over 95% renewal rate over the last 5 years. Looking past the short‐term movements in demand, we believe that, over the long term, the company is well‐poised to gain market share and also improve its profitability as it increases the average number of tenants per tower. In addition, management reiterated it is on pace to deploy 10,000 small cell nodes in 2023 (approximately doubling last year’s results). As such, we view Crown Castle as uniquely positioned to benefit from the shift to 5G networks, since the company’s portfolio skews toward urban areas where densification of populations, infrastructure and networks enhances the value proposition of small cells.”
5. Danaher Corporation (NYSE:DHR)
Fisher Asset Management’s Q2 2023 Stake: $89.5 million
Bill & Melinda Gates Trust’s Q2 2023 Stake: $983.5 million
Number of Hedge Fund Holders: 89
In the second quarter, 89 hedge funds in total held stakes in Danaher Corporation (NYSE:DHR). Their total stake value in the company was $6.4 billion.
Danaher Corporation (NYSE:DHR) is a life sciences tools and services company that designs, manufactures, and markets professional, medical, industrial, and commercial products and services across the globe. The company is based in Washington, the District of Columbia. It offers bioprocess technologies, consumables, and services, among more.
Conor McNamara, an analyst at RBC Capital, maintains an Outperform rating on shares of Danaher Corporation (NYSE:DHR) as of July 26. The analyst also raised his price target on the stock from $260 to $292.
Third Point Management mentioned Danaher Corporation (NYSE:DHR) in its second-quarter 2023 investor letter:
“Danaher Corporation (NYSE:DHR) is our longest held investment and remains a top five position. Danaher has underperformed the S&P 500 this year due to a slowdown in the bioprocessing industry and more cautious spending by biopharma customers. Bioprocessing is a key end-market that drives more than a quarter of Danaher’s profits. Bioprocessing products are the main inputs that biopharma companies use to manufacture biologic drugs, which are the fastest growing category of drugs, growing low-to-mid-teens and representing a sizeable portion of the clinical pipeline.
The bioprocessing industry experienced significant growth in 2021 and 2022, driven by Covid vaccines and a strong biotech funding environment. Several participants, including Danaher, lowered their 2023 growth outlook in large part due to customer inventory de-stocking and biotech funding weakness. We anticipate that this slowdown is temporary, and the bioprocessing industry will return to normalized growth of high-single digit to mid-teens in 2024 and beyond.…” (Click here to read the full text)
Like Caterpillar Inc. (NYSE:CAT), Microsoft Corporation (NASDAQ:MSFT), and Walmart Inc. (NYSE:WMT), Danaher Corporation (NYSE:DHR) is a stock Gates and Fisher both love.
Click to continue reading and see Billionaire Ken Fisher and Bill Gates Love These 4 Stocks.
Suggested articles:
- Ken Fisher’s Top 15 Energy Stock Picks
- Bill Gates Stock Portfolio: August 2023 Update
- Warren Buffett’s 11 Growth Stock Picks
Disclosure: None. Billionaire Ken Fisher and Bill Gates Love These 7 Stocks is originally published on Insider Monkey.
