In this article, we discuss some important stocks based on the past portfolios of former US President Barack Obama.
According to disclosures made by former US President Barack Obama himself when was in office, the investments of the president included US Treasury Bills worth somewhere between $100,000 and $250,000, and shares in the Vanguard 500 Index Fund Investor Shares (NASDAQ:VFINX).
The personal net worth of Obama is over $70 million. After his tenure in the White House, at the end of which his worth was around $10 million, Obama has become a global brand. According to Newsweek, he has signed book deals worth $65 million. He also signed a deal with streaming giant Netflix in 2018 worth around $100 million. In addition to these lucrative agreements, he has also been charging fees in the hundreds of thousands of dollars for various speaking engagements around the world.
Since the Vanguard Fund is one of two biggest investments of the former president, investors who are eager to follow his adventures into the world of stocks should check out some of the top holdings of the fund.
According to his financial disclosures, Obama had $100,000 to $250,000 in a Vanguard index fund that tracks the Standard & Poor’s 500 index and $200,000 to $500,000 in two other low-cost Vanguard index funds.
Accordingly, some of the top stocks to consider in the Vanguard index are Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and Apple Inc. (NASDAQ:AAPL), among others discussed in detail below. The fund has returned 16.60% over the past ten years.
Our Methodology
With this context in mind, here is our list of the 10 stocks to consider in the portfolio of Barack Obama. These were picked from among the top holdings of Vanguard 500 Index Fund Investor Shares, one of the premier investments of Obama when he was in office, according to official disclosures.
The list is compiled according to the number of hedge funds having stakes in each firm. The hedge fund sentiment around each stock was gauged using the data of 873 hedge funds tracked by Insider Monkey.
Why pay attention to hedge fund holdings? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Obama Stock Portfolio: 10 Stocks to Consider
10. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 60
Tesla, Inc. (NASDAQ:TSLA) recently reported earnings for the third quarter, posting earnings per share of $1.86, beating estimates by $0.25. The revenue over the period was $13.7 billion, up 56% year-on-year. The automaker revealed that it had produced 237,823 EVs in the third quarter, up 64% over the same period last year. The total deliveries between June and September were 241,391, up 73% year-on-year. The operating margin was 14.6% of sales, topping analyst predictions.
RBC Capital analyst Joseph Spak maintained a Sector Perform rating on Tesla, Inc. stock on October 21 but raised the price target to $800 from $755, appreciating the earning beat of the company in the third quarter.
At the end of the second quarter of 2021, 60 hedge funds in the database of Insider Monkey held stakes worth $9 billion in Tesla, Inc., down from 62 in the previous quarter worth $10 billion.
Here is what Baron Partners Fund has to say about Tesla, Inc. (NASDAQ:TSLA) in its Q1 2021 investor letter:
“Tesla, Inc. designs, manufactures, and sells fully electric vehicles, solar products, energy storage solutions, and battery cells. The stock fell during the quarter as a result of general market dynamics and a potential production slowdown due to parts shortages. A refreshed S/X and China Model Y ramp could also have a negative impact on margins in early 2021. We anticipate strong growth and improved margins driven by new production capacity, manufacturing efficiencies, localization of its manufacturing and supply chain, and maturation of Tesla’s full self-driving technology.”
9. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 86
Investment advisory Summit Insights recently upgraded NVIDIA Corporation (NASDAQ:NVDA) stock to Buy from Sell, noting that growth in the crypto and gaming markets had driven strong revenue for the company in the third quarter and further growth was expected through to January next year. The firm also debuted a new generation of the GeForce NOW cloud gaming platform recently that delivers higher resolutions and faster frame rates at a lower latency.
On October 5, NVIDIA Corporation had announced that it would be partnering with popular laptop manufacturer Lenovo for improvements to the security and performance of data centers. The company aims to use the NVIDIA BlueField data processing units for the purpose.
At the end of the second quarter of 2021, 86 hedge funds in the database of Insider Monkey held stakes worth $9 billion in NVIDIA Corporation, up from 80 the preceding quarter worth $6 billion.
In addition to Amazon.com, Inc., Microsoft Corporation, and Apple Inc., NVIDIA Corporation is one of the stocks that is attracting the attention of elite investors.
In its Q1 2021 investor letter, Vulcan Value Partners, an asset management firm, highlighted a few stocks and NVIDIA Corporation (NASDAQ:NVDA) was one of them. Here is what the fund said:
“NVIDIA Corp. is the dominant supplier of Graphics Processing Units (GPUs) worldwide. NVIDIA’s GPUs are at the intersection of a number of important computing trends including the movement to the Cloud, artificial intelligence, autonomous vehicles, edge computing, gaming, and more. We previously owned NVIDIA and sold it in the third quarter of 2020 as the price to value gap closed and our margin of safety was reduced. As with all our MVP companies, we continued to follow NVIDIA closely. Since that time, NVIDIA reported excellent results and its value has compounded rapidly. The technology selloff at the beginning of the year negatively affected the stock price while our estimate of NVIDIA’s value per share increased. This happy combination of events created a margin of safety and an opportunity to once again add NVIDIA to the portfolio.”
8. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 88
Johnson & Johnson stock was given a boost recently after the regulatory body approved the COVID-19 vaccine booster shots developed by the company in partnership with Moderna. The positive news came a day after the company, one of the most trusted names in the market with regards to dividend payouts, declared a quarterly dividend of $1.06 per share, in line with previous.
Raymond James analyst Jayson Bedford recently reiterated an Outperform rating on Johnson & Johnson stock with a price target of $178, down from $183, noting that the business of the firm was showing strength despite “cross-currents” in the third quarter earnings report.
At the end of the second quarter of 2021, 88 hedge funds in the database of Insider Monkey held stakes worth $7 billion in Johnson & Johnson, up from 81 in the previous quarter worth $6.9 billion.
7. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 108
JPMorgan Chase & Co. is one of the premier banks in the United States and Obama had a checking account with the firm just before he left office, according to reports. The company recently posted third quarter earnings, reporting earnings per share of $3.74, beating estimates by $0.74. The revenue over the period was $29 billion, up over 1% compared to the revenue over the same period last year and largely in line with market expectations.
Barclays analyst Jason Goldberg last week raised the price target on JPMorgan Chase & Co. stock to $193 from $187 and reiterated an Overweight rating, underlining that the firm was poised for growth through loans led by card.
Among the hedge funds being tracked by Insider Monkey, Boston-based investment firm Adage Capital Management is a leading shareholder in JPMorgan Chase & Co. with 2.9 million shares worth more than $456 million.
Amazon.com, Inc., Microsoft Corporation, and Apple Inc. are some of the top stocks to buy right now, just like JPMorgan Chase & Co..
In its Q4 2020 investor letter, Bretton Fund, an asset management firm, highlighted a few stocks and JPMorgan Chase & Co. (NYSE:JPM) was one of them. Here is what the fund said:
“After a strong performance in 2019, we wrote this about our bank stocks in last year’s report: “There will be another recession sooner than later, and our banks will see larger loans losses, but we think this is more than priced into the stock, and our banks are well reserved for that eventuality.” Little did we know “sooner” really meant “a few weeks from now.” Despite the economic shock, the banks still have huge capital cushions that can absorb large loan losses. Our remaining bank investments, JPMorgan and Bank of America, increased their reserves significantly at the beginning of the Covid-19 crisis in anticipation of imminent loan defaults, but with the government stimulus and perhaps a more resilient economy than many would have guessed, actual loan losses are up only slightly. They might happen later in 2021, but with an additional stimulus package and the vaccine rolling out, the large-scale losses may not be as bad as most people predicted. The bigger drag on the banks’ earnings power is lower rates, which in our opinion will persist for a long time. Despite this drag, we estimate both JPMorgan and Bank of America will continue to grow revenue and earnings over the next few years, while we believe their stocks remain bargains in a somewhat expensive market. JPMorgan’s earnings per share declined 17% last year, and its stock returned -5.5%. Bank of America’s earnings, which are more sensitive to interest rates, were down 32%, and its stock returned -11.6%.”
6. Berkshire Hathaway Inc. (NYSE:BRK-B)
Number of Hedge Fund Holders: 116
Berkshire Hathaway Inc. (NYSE:BRK-B) is led by Warren Buffett, one of the most famous investors in the world. The company operates as a diversified holding company with interests in several businesses, including consumer goods, railroads, and insurance. The stock is one of the most trusted names in the market due to an impressive dividend history and solid fundamentals.
Berkshire Hathaway Inc. reported in August that in the second quarter, the operating earnings of the company stood close to $7 billion, up from $5.5 billion over the same period last year. Railroad, utilities and energy businesses made big gains during the time.
At the end of the second quarter of 2021, 116 hedge funds in the database of Insider Monkey held stakes worth $22.3 billion in Berkshire Hathaway Inc., up from 111 in the preceding quarter worth $19 billion.
Amazon.com, Inc., Microsoft Corporation, and Apple Inc. are some of the elite stocks to buy right now, along with Berkshire Hathaway Inc. .
In its Q1 2021 investor letter, Vltava Fund, an asset management firm, highlighted a few stocks and Berkshire Hathaway Inc. (NYSE:BRK-B) was one of them. Here is what the fund said:
“Despite the considerable rise in stock markets over the past year, there are still many attractive opportunities. Human nature also is playing a bit into our hands. Investor crowds often chase popular stocks, hot IPOs, or mysterious SPACs and completely leave aside stocks they consider boring and not sexy enough. A typical example of this category is our long-term largest position in Berkshire Hathaway. Since we bought it for the first time, its price has nearly quadrupled and yet it remains just as undervalued today as it was at that time. Considering the current rate at which it is buying back its own shares and the amount of cash that Berkshire Hathaway has, my greatest wish as a shareholder is for the company’s share price to remain as low as possible for as long as possible.”
5. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 138
Apple Inc. recently unveiled new generations of two important products, the MacBook and AirPods, at an event in California. However, since the event did not feature a “new” product, as had been rumored, the share price of the firm only climbed around 1% after the reveal. However, Apple has other plans for growth too. It had announced earlier that it would add more shops inside Target stores before the holiday season rolls around in an attempt to sell more products during the busy time.
JPMorgan analyst Samik Chatterjee has an Overweight rating on Apple Inc. stock with a price target of $180. The analyst believes the company will deliver a “solid” earnings beat in the fourth quarter based on sales of the new iPhone.
At the end of the second quarter of 2021, 138 hedge funds in the database of Insider Monkey held stakes worth $145 billion in Apple Inc., up from 127 in the preceding quarter worth $131 billion.
In its Q1 2021 investor letter, Distillate Capital, an asset management firm, highlighted a few stocks and Apple Inc. (NASDAQ:AAPL) was one of them. Here is what the fund said:
“Apple is an even more notable situation and one that highlights our free cash valuation methodology and bears further discussion given its Q3 ‘20 sale from our strategy. For an extended period, Apple was extraordinarily inexpensive on a free cash flow basis and was the largest position in our strategy, exceeding 5% of the portfolio.”
4. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 190
Alphabet Inc. (NASDAQ:GOOGL) provides online advertising services. It is headquartered in California. The company is one of the biggest diversified technology firms in the world. GOOGL is the Class A stock of the firm. The company recently revealed new flagship Pixel smartphones with new silicon chips, aiming to rival competitors like Apple in the phone business.
On September 13, investment advisory Goldman Sachs initiated coverage of Alphabet Inc. stock with a Buy rating and a price target of $3,350, highlighting that the internet market segment still provided firms with opportunities for strong growth.
At the end of the second quarter of 2021, 190 hedge funds in the database of Insider Monkey held stakes worth $26 billion in Alphabet Inc., up from 185 in the preceding quarter worth $24 billion.
3. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 238
Microsoft Corporation operates as a diversified technology company. Wedbush analyst Daniel Ives recently kept an Outperform rating on the stock and raised the price target to $375 from $350, underlining that the cloud business of the firm was growing and the fundamentals appeared solid as ever.
Microsoft Corporation was also recently named among a list of tech companies by Morgan Stanley that are expected to navigate supply chain issues and chip shortages better than peers to deliver impressive earnings for the third quarter.
Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Microsoft Corporation with 24.8 million shares worth more than $6.7 billion.
In its Q1 2021 investor letter, Polen Capital, an investment management firm, highlighted a few stocks and Microsoft Corporation (NASDAQ:MSFT) was one of them. Here is what the fund said:
“We have written extensively about Microsoft in recent commentaries. It was our leading contributor last year and one of our largest weightings within the Portfolio. It continues to experience business momentum through several dominant, essential, and competitively advantaged businesses, like Office 365 and Azure. The markets it competes for are enormous, which gives the company the ability to compound at scale. In the past quarter alone, the company generated over $40 billion in revenue, representing a 17% growth rate. The inherent operating leverage in Microsoft’s business model continues and led to 34% earnings growth this past quarter. Despite the broad rotation we saw in the first quarter and Microsoft’s robust performance in 2020, we think its business fundamentals continue to exhibit strength, and the stock continues to reflect the fundamentals.”
2. Facebook, Inc. (NASDAQ:FB)
Number of Hedge Fund Holders: 266
There have been numerous reports that Facebook, Inc. (NASDAQ:FB), one of the biggest firms in the world, plans to change its name to distance the social media aspect of the business from other projects it is pursuing. Mark Zuckerberg, the founder of the firm, is presently holding discussions over the rebranding which could happen as early as this month.
Evercore ISI analyst Mark Mahaney has an Outperform rating on Facebook, Inc. stock with a price target of $450. The analyst believes that there is some reason to be cautious over the stock amid tough competition in the months ahead.
At the end of the second quarter of 2021, 266 hedge funds in the database of Insider Monkey held stakes worth $42 billion in Facebook, Inc., up from 257 in the preceding quarter worth $40 billion.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Facebook, Inc. (NASDAQ:FB) was one of them. Here is what the fund said:
“We continued to keep our learnings from 2020 in mind during the quarter as we sought to increase the up capture of the portfolio. We also made adjustments to the portfolio’s top 10 holdings to increase the participation of select stocks, including Facebook, while trimming our weighting to stable names, which now represent 47% of the portfolio. Our repositioning has been encouraging so far with the portfolio performing better on up days in the market while maintaining good down capture during more turbulent sessions.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 271
Credit Suisse analyst Stephen Ju recently maintained an Outperform rating on Amazon.com, Inc. stock but lowered the price target to $4,200 from $4,700 ahead of the third quarter results of the firm. The analyst believes wage pressures and new hiring would weigh on the firm in the near term.
Amazon.com, Inc. had earlier announced that it would be hiring 150,000 additional staff over the holiday season to keep up with demand.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Amazon.com, Inc. with 3.8 million shares worth more than $13 billion.
In its Q1 2021 investor letter, Hayden Capital, an asset management firm, highlighted a few stocks and Amazon.com, Inc. (NASDAQ:AMZN) was one of them. Here is what the fund said:
“Amazon (AMZN):We sold our last remaining stake in Amazon this quarter. Amazon was our longest-running investment holding, after having originally purchasing it at the inception of Hayden in 2014, at a price of ~$317.
I gave some details of how Amazon has progressed over these past 6.5 years in last year’s Q2 2020 letter, which partners can find here (LINK). The company has executed amazingly well over this tenure, with revenues up ~3.3x and since our initial purchase, and reported operating income up ~30x over that period.
Generally, I believe there are three reasons to sell an investment:1) we recognize our initial thesis is wrong (sell out as quick as possible), 2) we have a significantly higher returning opportunity to redeploy the capital into (sell-down to fund the new investment), or 3) the company is maturing and hitting the top part of it’s S-curve / business lifecycle, so the business has fewer places to reinvest its capital internally. As such, the future returns will likely be lower than the past. This investment thus becomes a “source of capital” in the future, as we fund earlier-stage investment opportunities.
In the case of Amazon, we decided to sell due to the third scenario. I’m sure Amazon will continue to generate value for shareholders and continue to keep pace with the broader technology sector. However, I’m just not confident it’s as attractive an investment as when we first invested.
With ~51% of US households having an Amazon Prime account (and with very low churn), each of these households continuing to increase their annual spend with Amazon, and few / no real competitors in sight, Amazon is a dominant force that will only continue to accrue value as consumers continue to move from offline to online purchases for their everyday needs. Likewise, the “cash-flow machine” of Amazon Web Services is in a similar position of strength, with AWS now having ~32% market share and continuing to grow at +30% y/y. Because of this, I think Amazon is probably one of the safest investments in the technology sector today.
So why did we decide to sell the investment then? Simply put, Amazon is …”read the entire letter here]
You can also take a peek at 12 Best Big Tech Stocks to Buy Right Now and 10 Stocks That Just Received Sell Rating from Analysts.
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This article is originally published at Insider Monkey.
