In this article, we take a look at the 5 best large-cap stocks to buy. If you want to read our detailed analysis of the large-cap stocks, go directly and read the Starter Stock Portfolio: 10 Large-cap Stocks To Buy.
5. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 105
UnitedHealth Group Incorporated (NYSE:UNH), an American multinational healthcare and insurance company, ranks fifth on our list of the best large-cap stocks to buy. As spending on healthcare products constitutes 18% of the U.S. GDP, investing in health stocks, such as UnitedHealth Group Incorporated (NYSE:UNH), can be a wiser option.
In Q3 2021, UnitedHealth Group Incorporated (NYSE:UNH) posted an EPS of $4.52, beating the estimates by $0.10. The company reported revenue of $7.23 billion, showcasing an 11.1% growth from the prior-year quarter. UnitedHealth Group Incorporated (NYSE:UNH) gained 29.7% in the past year. The company pays an annual dividend of $5.80 per share, yielding 1.38%, and has a 12-year track record of consistent dividend growth.
Recently, Evercore ISI lifted its price target on UnitedHealth Group Incorporated (NYSE:UNH) to $480, while keeping an Outperform rating on the shares, highlighting the company’s solid Q3 earnings.
As of Q2 2021, 105 hedge funds tracked by Insider Monkey were bullish on UnitedHealth Group Incorporated (NYSE:UNH), valued at $13.12 billion. The number of hedge funds having stakes in the company stood at 89 in the previous quarter, presenting the positive hedge fund sentiment.
ClearBridge Investments mentioned UnitedHealth Group Incorporated (NYSE:UNH) in its Q2 2021 investor letter. Here is what the firm has to say:
“A good way to conceptualize how we think about portfolio construction is to picture a pyramid. At the bottom of the pyramid are the durable compounding growth companies that form the strong foundation, resilience and consistency for the Strategy. We think these companies should comprise just under half of portfolio assets and feature annual revenue growth rates ranging from two times GDP up to 20% as well as healthy free cash flow generation.
UnitedHealth Group, a name we have owned in the Strategy since 1992, is a good example of a long-term compounder, having grown its revenue base from approximately $600 million to north of $260 billion over that time frame. It remains constantly focused on investing in new growth drivers such as telemedicine and health care analytics. Broadcom and Comcast have delivered similar long-term appreciation through a combination of organic growth, capital deployment into new and adjacent opportunities through merger and acquisition activity as well as returning capital to shareholders through buybacks and dividends.”
4. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 138
Legendary investor Warren Buffett’s Berkshire Hathaway is the largest shareholder of Apple Inc. (NASDAQ:AAPL) because of its stable earnings over the years. The company’s current EPS growth rate is 10.7%, while it is expected to grow by 10.5% in the coming years, according to analysts. Along with Berkshire Hathaway, 138 hedge funds were reported having stakes in Apple Inc. (NASDAQ:AAPL) in Q2, up from 127 in the previous quarter. The total value of these stakes is $145.5 billion.
Amit Daryanani of Evercore ISI believes that Apple Inc. (NASDAQ:AAPL) can benefit from the growing advertisement market as the company gained some share in the digital ads market in the recent past. The firm lifted its price target on Apple Inc. (NASDAQ:AAPL) to $180, while keeping an Outperform rating on the shares.
ClearBridge Investments mentioned Apple Inc. (NASDAQ:AAPL) in its first-quarter 2021 investor letter. Here is what the firm has to say:
“As we actively manage holdings and position sizes, we look to regularly recycle capital into more compelling opportunities. Maintaining our valuation discipline, we sharply reduced our position in Apple, whose shares more than doubled following our initial purchase in mid-2019 with an earnings multiple rising from the low-to-mid teens to nearly 30x.”
3. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 155
Alphabet Inc. (NASDAQ:GOOG) is considered the global leader in digital advertising and makes up 92% of the global search engine market. The company has reported its revenue growth at a CAGR of 20% in over 10 years. Alphabet Inc. (NASDAQ:GOOG) remains one of the best large-cap stocks to buy.
Recently, JPMorgan listed Alphabet Inc. (NASDAQ:GOOG) as the most liked mega-cap internet company, and lifted its price target on the stock to $3,250, while keeping an Overweight rating on the shares.
As of Q2 2021, 155 hedge funds tracked by Insider Monkey have positions in Alphabet Inc. (NASDAQ:GOOG), compared with 159 in the previous quarter. The total value of these stakes is $$33.7 billion.
Mawer Investment Management mentioned Alphabet Inc. (NASDAQ:GOOG) in its second-quarter 2021 investor letter. Here is what the firm has to say:
“Many higher growth companies reported strong results amid the pick-up in broad economic activity including Alphabet. These higher growth companies tend to have increased sensitivity to a change in discount rates and were supported as long-term interest rates stabilized over the period.”
2. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 238
Over the past few years, Microsoft Corporation (NASDAQ:MSFT) has emerged as a strong leader in cloud computing services, with its Azure cloud services business growing by over 50% in 2021, compared with the last year.
Microsoft Corporation (NASDAQ:MSFT) pays an annual dividend of $2.24 per share, yielding 0.74%, with a dividend payout ratio of 28.11%. In October, Morgan Stanley lifted its price target on Microsoft Corporation (NASDAQ:MSFT) to $331, while keeping an Overweight rating on the shares. The company posted an EPS of $2.17 in Q2, beating the estimates by $0.25.
Of the 873 hedge funds tracked by Insider Monkey, 238 funds were bullish on Microsoft Corporation (NASDAQ:MSFT) in Q2, compared with 251 in the previous quarter. These stakes are valued at $62.4 billion.
Baron Opportunity Fund released its second-quarter 2021 investor letter and mentioned Microsoft Corporation (NASDAQ:MSFT) in it. Here is what the firm has to say:
“Shares of Microsoft Corporation, a cloud-software leader and provider of software productivity tools and infrastructure, rose during the quarter following a strong earnings report highlighting solid demand for its broad product stack and continued momentum migrating its business to the cloud. Microsoft was a top contributor in the period because it trades at reasonable free cash flow and earnings valuations, has cloud and digital transformation tailwinds at its back, reported a solid March quarter, and beat Street expectations by a wide margin. Microsoft’s results continued to be strong across the board, with Azure cloud computing revenues up 46% in constantcurrency (“cc”) terms and commercial cloud bookings growth of 38% cc, the best in years. Microsoft also reported robust profitability growth, with operating income expanding 31% and GAAP earnings up 45%. We believe the company is well positioned for continued solid growth and profitability through market share gains as more companies look to transform and digitize their businesses as they move operations to the cloud.”
1. Facebook, Inc. (NASDAQ:FB)
Number of Hedge Fund Holders: 266
Facebook, Inc. (NASDAQ:FB) is a pioneer in social media services and mobile computing as the company’s daily active users have reached 1.9 billion in 2021, a 6.89% increase from the same period last year. According to Goldman Sachs, this popularity is to remain intact in the coming years as well. Facebook, Inc. (NASDAQ:FB) tops our list of the best large-cap stocks to buy.
As of Q2 2021, 266 hedge funds tracked by Insider Monkey reported having positions in the company, valued at $42.3 billion. The hedge fund sentiment remained positive for Facebook, Inc. (NASDAQ:FB) in Q2 as, in the previous quarter, 257 hedge funds had stakes in the company.
First Eagle Investment Management mentioned Facebook, Inc. (NASDAQ:FB) in its second-quarter investor letter. Here is what the firm has to say:
“Leading contributors in the First Eagle Global Fund this quarter included Facebook, Inc. Class A. Facebook has continued to post impressive results for both revenue and active users of its traditional platforms. In the meantime, the social media giant continues to make progress on new initiatives—like Facebook Horizon (virtual reality) and Facebook Shops (e-commerce)—and maintains attractive monetization optionality around services like Messenger and WhatsApp.”
You can also take a look at 10 Best Large-cap Stocks To Buy Now and 12 Best Large-cap Biotech Stocks To Buy Now
