In this article, we will look at 3 defensive stocks Jefferies’ analysts are recommending amid recession and inflation. If you want to explore similar stocks, you can also read Jefferies Recommends These 6 Defensive Stocks Amid Recession and Inflation.
3. Dollar General Corporation (NYSE:DG)
Number of Hedge Fund Holders: 53
Dollar General Corporation (NYSE:DG) operates as a discount retailer and provides various merchandise products in the southern, southwestern, midwestern, and eastern United States. The company has over 18,000 discount stores spread throughout the United States. Jefferies analysts are bullish on Dollar General Corporation (NYSE:DG) and see the stock outperforming other stocks during a tough macroeconomic backdrop.
On June 16, Morgan Stanley analyst Simeon Gutman raised his price target on Dollar General Corporation (NYSE:DG) to $250 from $225 and upgraded the stock to Overweight from Equal Weight. On July 5, Cleveland Research upgraded Dollar General Corporation (NYSE:DG) to Buy from Neutral.
At the end of Q1 2022, 53 hedge funds held stakes in Dollar General Corporation (NYSE:DG) worth $2.25 billion. This is compared to 44 positions in the previous quarter with stakes worth $2.20 billion. The hedge fund sentiment for the stock is positive.
In the first quarter of 2022, Orbis Investment Management raised its stakes in Dollar General Corporation (NYSE:DG) by 11% and brought them to $519.28 million. The fund owns over 2.3 million shares of the company and is the largest shareholder.
2. RH (NYSE:RH)
Number of Hedge Fund Holders: 63
RH (NYSE:RH) operates as a home furnishing retailer. It offers products in various categories, including furniture, lighting, textiles, bath-ware, décor, outdoor & garden, and child & teen furnishings. Jefferies analysts are bullish on RH (NYSE:RH) and cited that the company’s cash balance represents 25% of its market capitalization, which as of July 14 stands at $6.45 billion, and also noted that RH’s (NYSE:RH) profitability is significantly defensive.
On June 30, Jefferies analyst Jonathan Matuszewski trimmed his price target on RH (NYSE:RH) to $400 from $520 but reiterated a Buy rating on the shares. Other analysts are also bullish on RH (NYSE:RH). On July 1, Citi analyst Steven Zaccone noted that RH’s (NYSE:RH) risk/reward ratio offers more upside than downside at the stock’s current valuation while reiterating his Buy rating and $338 price target on the stock.
At the end of Q1 2022, 63 hedge funds held stakes in RH (NYSE:RH) worth $2.84 billion. This is compared to 58 positions in the previous quarter with stakes worth $4.84 billion.
In the first quarter of 2022, Berkshire Hathaway raised its stakes in RH (NYSE:RH) by 20% and brought them to $707.61 million. As of March 31, Berkshire Hathaway owns more than 2.1 million shares of the company and is the largest shareholder.
Here is what Polen Capital had to say about RH (NYSE:RH) in its “Polen US SMID Company Growth Fund” first-quarter 2022 investor letter:
“RH is a furniture store company with brand recognition and a unique business model. The company’s stock price fell sharply over the first three months of 2022 despite solid operating results, which resulted in what we believed to be an attractive opportunity to add to our position in the company. We are mindful that, on the margin, the company is certainly experiencing some early impact from record inflation and rising interest rates, and we feel comfortable in both the management team’s ability to navigate these challenges and the power of the company’s brand and its long-term potential.”
1. Booking Holdings Inc. (NASDAQ:BKNG)
Number of Hedge Fund Holders: 99
Booking Holdings Inc. (NASDAQ:BKNG) provides travel and restaurant online reservation and related services worldwide. Jefferies analysts are bullish on Booking Holdings Inc. (NASDAQ:BKNG) because the company has buyback power and a strong cash position. As of July 14, Booking Holdings Inc. (NASDAQ:BKNG) has $4.37 billion in excess free cash flows.
On July 7, Evercore ISI analyst Mark Mahaney trimmed his price target on Booking Holdings Inc. (NASDAQ:BKNG) to $2,600 from $3,000 and reiterated a buy-side Outperform rating on the shares. Moreover, on July 14, Truist analyst Naved Khan cut his price target on Booking Holdings Inc. (NASDAQ:BKNG) to $2,600 from $3,000 but maintained a Buy rating on the shares.
At the close of Q1 2022, 99 hedge funds were long Booking Holdings Inc. (NASDAQ:BKNG) with stakes worth $7.58 billion. This is compared to 92 positions in the preceding quarter with stakes worth $7.72 billion.
As of March 31, Harris Associates owns more than 0.66 million shares of Booking Holdings Inc. (NASDAQ:BKNG) and is the largest shareholder in the company. The fund’s stakes were valued at $1.56 billion and the investment covers 2.05% of Harris Associates’ 13F portfolio.
Here is what ClearBridge Investments had to say about Booking Holdings Inc. (NASDAQ:BKNG) in its “Large Cap Growth Strategy” first quarter 2022 investor letter:
“Other actions during the quarter included the sale of consumer name Booking Holdings (NASDAQ:BKNG). We sold Booking, the owner of online travel agencies Booking.com, Priceline and Kayak, due to its higher exposure to Europe where we believe a rebound in travel will be slowed by the spillover effects of the Ukraine invasion on consumer spending.”
You can also take a look at 10 Best Defensive Stocks to Buy Today According to Billionaire Ken Fisher and 10 Defensive Stocks in Billionaire Ray Dalio’s Latest Portfolio.
