Top 10 Stocks to Buy According to Legendary Value Investor Joel Greenblatt

Published December 15, 2021 at 4:01 pm EST Updated August 19, 2026 at 12:06 pm EDT

In this article, we discuss the top 10 stocks to buy according to legendary value investor Joel Greenblatt.

Legendary value investor Joel Greenblatt is an American hedge fund manager and writer, who serves as the managing principal and co-chief investment officer of Gotham Asset Management, an investment management firm that he founded in 1985. Gotham Asset Management has a portfolio valued at $2.46 billion as per the Q3 13F filings, with assets under management of $4.11 billion. With a top ten holdings concentration of 16.24%, Joel Greenblatt’s Q3 portfolio is concentrated in the information technology, finance, healthcare, industrials, consumer discretionary, and communications sectors.

Joel Greenblatt holds an MBA degree from the Wharton School of the University of Pennsylvania. In addition to actively managing Gotham Asset Management, Greenblatt has been a faculty member of Columbia Business School for more than two decades, teaching a course named “Value and Special Situation Investing”.

He is also a director of the global investment management firm, Pzena Investment Management, Inc (NYSE:PZN). Greenblatt is a renowned author, and his publications include You Can Be A Stock Market Genius (Simon & Schuster, 1997), The Little Book that Beats the Market (Wiley, 2005), The Little Book that Still Beats the Market (Wiley, 2010), The Big Secret for the Small Investor (Random House, 2011), and Common Sense: The Investor’s Field Guide to Equality, Opportunity, and Growth (Columbia University Press, 2020).

In the year 2000, Greenblatt helped the American investor, Michael Burry, to create his hedge fund, namely Scion Capital, by purchasing 25% of its capital for $1 million. Greenblatt has a straightforward approach to investment, primarily focusing on the large- and mid-cap American companies. Greenblatt believes that short term price volatility is temporary, and should not impact his investment strategy, since stocks will eventually go back to their fair value. Expensive companies receive a larger short allocation in his portfolio, whereas, the cheaper a company appears to be, the bigger allocation it receives on the long side.

Top 10 Stocks to Buy According to Legendary Value Investor Joel Greenblatt

Joel Greenblatt of Gotham Asset Management

The most notable stocks in Joel Greenblatt’s Q3 portfolio include Meta Platforms, Inc. (NASDAQ:FB), Apple Inc. (NASDAQ:AAPL), Alphabet Inc. (NASDAQ:GOOG), Amazon.com, Inc. (NASDAQ:AMZN), and Microsoft Corporation (NASDAQ:MSFT).

Our Methodology

We used the Q3 portfolio of Joel Greenblatt’s Gotham Asset Management to select the legendary value investor’s top 10 stocks.

Ranking the list according to Greenblatt’s stake value in each holding, we have mentioned Q3 earnings, analyst ratings, and the hedge fund sentiment around each stock to give readers a better understanding about the companies.

Top Stocks to Buy According to Legendary Value Investor Joel Greenblatt

10. Johnson & Johnson (NYSE:JNJ)

Gotham Asset Management’s Stake Value: $18,190,000

Percentage of Gotham Asset Management’s 13F Portfolio: 0.73%

Number of Hedge Fund Holders: 88

Johnson & Johnson, an American multinational corporation offering consumer health products, medical devices, and pharmaceutical products, posted on October 19 its Q3 results. The company reported earnings per share of $2.60, beating estimates by $0.25. The revenue gained 10.70% year-over-year, amounting to $23.34 billion, but missed estimates by almost $380 million.

Joel Greenblatt increased his stake in Johnson & Johnson by 68% in the third quarter, holding 112,634 shares worth $18.19 million, representing 0.73% of his total Q3 investments.

Johnson & Johnson expects to file for the approval of 14 new drugs by 2025, and the company is actively researching the COVID-19 Omicron variant, to create additional vaccines and booster shots to combat the virus.

On November 12, Johnson & Johnson announced its plan to separate its consumer division from its pharmaceutical and medical devices business segments. The healthcare division of Johnson & Johnson will be traded as a new publicly listed company, and the company expects to complete this transition over the coming 12 to 18 months.

In the third quarter, 88 hedge funds monitored by Insider Monkey were long Johnson & Johnson, holding total stakes worth $6.87 billion. Terry Smith’s Fundsmith LLP is the leading Johnson & Johnson stakeholder from Q3, with 7.20 million shares valued at $1.16 billion.

Johnson & Johnson is one of the top stock picks of Joel Greenblatt as of September this year, in addition to Meta Platforms, Inc., Apple Inc., Alphabet Inc., Amazon.com, Inc., and Microsoft Corporation.

Here is what Distillate Capital has to say about Johnson & Johnson in its Q2 2021 investor letter:

“The largest additions in the rebalance, Johnson & Johnson was around 50 and 40 basis points incrementally. J&J underperformed in the quarter while its normalized free cash flows held steady and so its position size was topped off to match the stable cash flows.”

9. Walmart Inc. (NYSE:WMT)

Gotham Asset Management’s Stake Value: $18,989,000

Percentage of Gotham Asset Management’s 13F Portfolio: 0.77%

Number of Hedge Fund Holders: 71

In the third quarter earnings report published on November 16, Walmart Inc. (NYSE:WMT) posted an EPS of $1.45, beating estimates by $0.06. The Q3 revenue totaled $139.21 billion, exceeding estimates by $4.95 billion.

Legendary value investor Joel Greenblatt holds an $18.9 million position in Walmart Inc. as of September 2021, which represents 0.77% of his total third quarter securities.

MKM Partners analyst Bill Kirk upgraded Walmart Inc. to Buy from Neutral with a price target of $166, up from $156 on November 19. The analyst observed that relative to peers, Walmart Inc. has better inventory levels heading into the holiday season and has shown the best progress towards building a subscription model.

At the end of September, 71 hedge funds tracked by Insider Monkey were bullish on Walmart Inc., with a total stake value of $7.93 billion. Billionaire Ken Fisher, via Fisher Asset Management, increased his stake in Walmart Inc. by 4% in Q3, holding over 13 million shares worth $1.81 billion.

Here is what ClearBridge Investments has to say about Walmart Inc. in its Q2 2021 investor letter:

“The pandemic has created challenges for businesses large and small; one major challenge for large essential retailers such as ClearBridge holdings Home Depot, Walmart and Costco has been ensuring adequate staffing to meet demand under trying conditions. All three instituted enhanced pay practices during the pandemic, with raises, unplanned bonuses and other benefits helping compensate employees for their efforts in a difficult environment. In September 2020 Walmart raised wages for 165,000 employees, including a number of entry positions to $15 an hour. It followed this in February with a raise for 425,000 workers that moved its average pay above $15 an hour.”

8. Pfizer Inc. (NYSE:PFE)

Gotham Asset Management’s Stake Value: $22,889,000

Percentage of Gotham Asset Management’s 13F Portfolio: 0.92%

Number of Hedge Fund Holders: 74

As of the third quarter, Pfizer Inc. (NYSE:PFE) stock represents 0.92% of Joel Greenblatt’s total investments, with the value investor holding 532,176 Pfizer Inc. shares, worth $22.8 million.

Pfizer Inc. announced its Q3 results on November 2, reporting earnings per share of $1.34, exceeding estimates by $0.25. The quarterly revenue equaled $24.09 billion, outperforming estimates by $1.28 billion.

Mizuho analyst Vamil Divan on December 14 raised the price target on Pfizer Inc. to $56 from $44 and kept a Neutral rating on the shares, citing recent developments at Pfizer Inc. like the Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) acquisition announcement, as reasons for the higher price target. He also increased the revenue guidance of Pfizer Inc. for 2022 and 2023.

Ric Dillon’s Diamond Hill Capital is the largest Pfizer Inc. stakeholder from Q3, with 10.6 million shares worth roughly $458 million. Overall, 74 hedge funds tracked by Insider Monkey reported owning stakes in Pfizer Inc. at the end of September, worth $2.66 billion, up from 67 funds in the prior quarter.

Pfizer Inc. is a notable stock in Joel Greenblatt’s investment portfolio from the third quarter, just like Meta Platforms, Inc., Apple Inc., Alphabet Inc., Amazon.com, Inc., and Microsoft Corporation.

Here is what Saturna Capital Amana Funds has to say about Pfizer Inc. in its Q3 2021 investor letter:

“The Fund’s strongest performer during the quarter was pharmaceutical manufacturer Pfizer. The company submitted trial data to the FDA for use of its COVID-19 vaccine for younger children, and it is widely expected that the FDA will approve it. Health authorities also began recommending booster shots of the Pfizer vaccine for select populations, further increasing demand for vaccinations.”

7. Meta Platforms, Inc. (NASDAQ:FB)

Gotham Asset Management’s Stake Value: $34,710,000

Percentage of Gotham Asset Management’s 13F Portfolio: 1.40%

Number of Hedge Fund Holders: 248

The parent company of popular social networking platforms like Facebook, Instagram, and WhatsApp, Meta Platforms, Inc. is one of the top 10 stocks to buy according to legendary value investor Joel Greenblatt. Greenblatt, via Gotham Asset Management, owns 102,272 Meta Platforms, Inc. shares, worth $34.71 million, accounting for 1.40% of the hedge fund’s total investments for the third quarter.

In its Q3 earnings report, published on October 25, Meta Platforms, Inc. posted an EPS of $3.22, topping estimates by $0.04. The revenue gained 35.12% year-over-year, reaching $29.01 billion, but missed estimates by $513.23 million.

HSBC analyst Nicolas Cote-Colisson upgraded Meta Platforms, Inc. on December 6 to Hold from Reduce with an unchanged price target of $300. The analyst stated that the shares are under pressure after a “regulatory setback”, despite upside risks on advertising and rising interest in the metaverse.

In the third quarter, 248 hedge funds in the database of 867 elite funds tracked by Insider Monkey were long Meta Platforms, Inc., holding total stakes worth $38.5 billion. Boykin Curry’s Eagle Capital Management is one of the most significant Meta Platforms, Inc. stakeholders from Q3, with 7.1 million shares worth $2.44 billion.

Here is what Canterbury Tollgate has to say about Meta Platforms, Inc. in its Q3 2021 investor letter:

“To say traditional media is anti-Facebook would not be an overstatement. An already intense and multi-year critique of (or attack on) Facebook has ratcheted up in recent weeks. Facebook’s research efforts have been reported on, if often derided, for nearly a decade. Going back to 2014, Slate.com called their research practices “unethical” when FB tried to study the impact social posts had on users. Now those efforts have been turned against them for the kill shot.

My job is to observe, assess, and allocate. Not to commentate on all the whims and wishes of media narrative. However, in the case of Facebook I cannot avoid going into some detail re: the onslaught against them, which I find to be most unwarranted and insincere.

Last month the Wall Street Journal ran a five-piece series titled “The Facebook Files” which allegedly shows how toxic Instagram is for teens. The foundation of their argument was a single slide from an internal presentation claiming, based on FB’s own research, that of teens who had a negative self-image, one-third said Instagram “made them feel worse.”iii Somehow the implication here is that this is not an inescapable aspect of either the human psyche and/or society-at large, but that it is of Facebook’s doing…” (Click here to see the full text)

6. Apple Inc. (NASDAQ:AAPL)

Gotham Asset Management’s Stake Value: $37,435,000

Percentage of Gotham Asset Management’s 13F Portfolio: 1.51%

Number of Hedge Fund Holders: 120

Apple Inc., one of the Big Five US tech firms, announced its Q3 results on October 28. Earnings per share of $1.24 were in line with analysts’ consensus estimates for the quarter. Revenue over the period jumped 28.84% to $83.36 billion, but missed estimates by $1.62 billion.

The Q3 database of Insider Monkey reported that 120 hedge funds were bullish on Apple Inc., with total stakes amounting to approximately $146 billion. The leading Apple Inc. stakeholder as of September is Berkshire Hathaway, with a $125.5 billion position in the company.

On December 14, Evercore ISI analyst Amit Daryanani raised the price target on Apple Inc. to $200 from $180 and kept an Outperform rating on the shares. According to the analyst, there is room for sustained upside through FY22 as Apple Inc. benefits from multiple tailwinds, including stable iPhone growth, monetization of the installed base across services and wearables, and new product launches.

As per the third quarter filings of Gotham Asset Management, the hedge fund holds 264,561 Apple Inc. shares, worth $37.4 million, representing 1.51% of the total Q3 investments.

Here is what ClearBridge Investments has to say about Apple Inc. in its Q1 2021 investor letter:

“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.”

5. Alphabet Inc. (NASDAQ:GOOG)

Gotham Asset Management’s Stake Value: $41,667,000

Percentage of Gotham Asset Management’s 13F Portfolio: 1.68%

Number of Hedge Fund Holders: 156

Legendary value investor Joel Greenblatt increased his stake in Alphabet Inc. by 8% in the Q3 2021, holding 15,585 shares worth $41.6 million. Alphabet Inc. stock represents 1.68% of the total Q3 investments of Joel Greenblatt.

Tigress Financial analyst Ivan Feinseth on December 3 raised the price target on Alphabet Inc. to $3,540 from $3,185 and reiterated a Strong Buy rating on the shares. The analyst observed that Alphabet Inc.’s increasing artificial intelligence focus is driving greater product functionality and presents “significant” growth opportunities, in addition to “enabling the development of more helpful products”.

Of the 156 hedge funds that were long Alphabet Inc. at the end of September, Chris Hohn’s TCI Fund Management is the largest stakeholder of the company, holding a $7.86 billion position in Alphabet Inc..

Here is what Saturna Capital Amana Funds has to say about Alphabet Inc. in its Q3 2021 investor letter:

“Alphabet was a new addition to the Fund this year, as we believed it important to have exposure to the top online media and advertising company in the world. Some have raised concerns surrounding Alphabet’s exposure to political interference, but we take comfort from the belief that were the company to be broken up, it would quite likely be worth even more than as a single entity.”

4. Amazon.com, Inc. (NASDAQ:AMZN)

Gotham Asset Management’s Stake Value: $43,257,000

Percentage of Gotham Asset Management’s 13F Portfolio: 1.75%

Number of Hedge Fund Holders: 242

In Q3 2021, Gotham Asset Management owned 13,168 Amazon.com, Inc. shares, worth $43.25 million, representing 1.75% of the hedge fund’s 13F portfolio. Joel Greenblatt increased his stake in Amazon.com, Inc. by 8% in the third quarter.

Amazon.com, Inc. published Q3 earnings on October 28, posting an EPS of $6.12, missing estimates by $2.78. The $110.81 billion revenue gained 15.26% year-over-year, but missed estimates by almost $785 million.

Cowen analyst John Blackledge raised the price target on Amazon.com, Inc. to $4,500 from $4,300 and kept an Outperform rating on the shares on December 13, calling it his Best Idea for 2022 and the top mega-cap pick.

Fisher Asset Management is one of the leading Amazon.com, Inc. stakeholders from the 242 hedge funds that were bullish on the stock as of the third quarter of 2021. Ken Fisher’s fund holds a $6.34 billion position in Amazon.com, Inc..

Here is what Davis Opportunity Fund has to say about Amazon.com, Inc. in its Q3 2021 investor letter:

“E-commerce, online search and advertising, social media and software are another component of the portfolio that have proven, attractive businesses. The online portion of the Fund is currently dominated by such market leaders as Amazon.com. We are attracted to these names based on the size and rapid expansion of their market opportunities globally, their ability to generate and grow new revenue sources through constant innovation, ample operating leverage as they continue to scale and capable, focused, highly competitive leadership teams. If purchased at sensible prices, these types of businesses in our experience can contribute meaningfully to long-term results.”

3. Microsoft Corporation (NASDAQ:MSFT)

Gotham Asset Management’s Stake Value: $56,504,000

Percentage of Gotham Asset Management’s 13F Portfolio: 2.29%

Number of Hedge Fund Holders: 250

Microsoft Corporation is an American multinational technology company offering operating systems, computer software, and consumer electronics. Microsoft Corporation is a top stock to buy according to legendary value investor Joel Greenblatt in the third quarter, with Greenblatt holding 200,426 Microsoft Corporation shares, worth $56.5 million, representing 2.29% of his 13F portfolio.

On December 2, Wells Fargo analyst Michael Turrin kept an Overweight rating on Microsoft Corporation, stating that Dynamics 365 remained an important growth driver and product category for Microsoft Corporation, and Power Automate was the market leader in total adoption.

Here is what Baron Opportunity Fund has to say about Microsoft Corporation in its Q3 2021 investor letter:

“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’s results continued to be strong across the board, with total revenue beating Street estimates by 4.5%, an acceleration in Commercial Cloud revenue to 31% constant-currency growth, a four-point improvement in Commercial Cloud gross margins (to 70% from 66%), and GAAP earnings up 42%. We believe the company is positioned to deliver 13% to 15% organic growth over the next three years, underpinned by TAM expansion across its disruptive cloud product portfolio, as more companies look to transform and digitize their businesses, as well as strong operating leverage as its cloud products gain scale.”

2. SPDR S&P 500 ETF Trust (NYSE:SPY)

Gotham Asset Management’s Stake Value: $62,450,000

Percentage of Gotham Asset Management’s 13F Portfolio: 2.53%

Number of Hedge Fund Holders: 69

SPDR S&P 500 ETF Trust (NYSE:SPY), an exchange traded fund designed to track the S&P 500 Index, is one of the top holdings of Joel Greenblatt. Greenblatt, via Gotham Asset Management, holds 145,524 SPDR S&P 500 ETF Trust shares, worth $62.45 million, representing 2.53% of the fund’s total investments in the third quarter. Gotham Asset Management increased its stake in the ETF by 64% in Q3.

With a net asset value exceeding $467 billion, SPDR S&P 500 ETF Trust is the largest ETF in the world. One of the leading SPDR S&P 500 ETF Trust stakeholders from the third quarter is LMR Partners, with 2.7 million shares worth $1.15 billion.

A total of 69 hedge funds were bullish on SPDR S&P 500 ETF Trust in the third quarter of 2021, down from 76 funds in the previous quarter.

1. Tidal ETF Trust – SoFi Select 500 ETF (NYSE:SFY)

Gotham Asset Management’s Stake Value: $64,380,000

Percentage of Gotham Asset Management’s 13F Portfolio: 2.61%

Number of Hedge Fund Holders: N/A

The largest holding in the Q3 portfolio of legendary value investor Joel Greenblatt is Tidal ETF Trust – SoFi Select 500 ETF (NYSE:SFY), which is a new arrival in his portfolio, with the hedge fund manager holding 2.78 million shares of Tidal ETF Trust – SoFi Select 500 ETF, worth $64.38 million, representing 2.61% of his total investments.

Launched and operated by Toroso Investments, Tidal ETF Trust – SoFi Select 500 ETF invests in growth and value stocks, giving investors an exposure to a mix of mid to large cap companies. It seeks to track the performance of the SoFi Social 50 Index, by using full replication technique.

You can also take a look at 10 Dividend Aristocrats to Buy for 2022 and 10 Best Jim Cramer Stocks to Watch in December.

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