In this article, we discuss the 5 stocks that Warren Buffett loaded up on for the rest of 2022. If you want to see more stocks in this selection, click Warren Buffett Loaded Up on These 10 Stocks for the Rest of 2022.
5. McKesson Corporation (NYSE:MCK)
Number of Hedge Fund Holders: 59
McKesson Corporation (NYSE:MCK) provides healthcare services in the United States and internationally, operating through four segments – U.S. Pharmaceutical, International, Medical-Surgical Solutions, and Prescription Technology Solutions. Berkshire Hathaway invested in McKesson Corporation (NYSE:MCK) in Q1 2022, and in the June quarter, the hedge fund boosted its stake by 10%, holding a position worth over $1 billion.
Deutsche Bank analyst George Hill on August 8 raised the price target on McKesson Corporation (NYSE:MCK) to $409 from $378 and kept a Buy rating on the shares. The company posted robust fiscal Q1 results, with an “impressive beat powered” both by performance in its primary business and an ongoing contribution from COVID therapies and supplies, the analyst told investors.
According to Insider Monkey’s Q1 data, 59 hedge funds were bullish on McKesson Corporation (NYSE:MCK), up from 57 funds in the earlier quarter. Richard S. Pzena’s Pzena Investment Management is a significant shareholder of the company, with 2.70 million shares worth $827.3 million.
Here is what Baron Health Care Fund has to say about McKesson Corporation (NYSE:MCK) in its Q2 2022 investor letter:
“McKesson Corporation is a leading distributor of pharmaceuticals and medical supplies. The company contributed to performance due to solid financial results and investor rotation into stocks trading at lower valuation multiples of earnings. We continue to believe the stock is inexpensive in light of McKesson’s strong competitive position in growing end-markets and earnings growth potential.”
4. Occidental Petroleum Corporation (NYSE:OXY)
Number of Hedge Fund Holders: 67
Occidental Petroleum Corporation (NYSE:OXY) is a Texas-based company that explores and develops oil and gas properties in the United States, the Middle East, Africa, and Latin America. Buffett initially invested in Occidental Petroleum Corporation (NYSE:OXY) in Q3 2019, but he sold his stake in Q2 2020. The billionaire again purchased a position in the company in Q1 2022, and in Q2, he lifted his stake by 17%. The Berkshire portfolio had 158.5 million shares of Occidental Petroleum Corporation (NYSE:OXY) worth $9.3 billion, representing 3.11% of the total holdings. Buffett owns 20% of Occidental Petroleum Corporation (NYSE:OXY)’s common shares.
Barclays analyst Jeanine Wai on July 26 maintained an Overweight rating on Occidental Petroleum Corporation (NYSE:OXY) but lowered the price target on the stock to $79 from $84 ahead of the Q2 results. The company announced on August 2 its Q2 results, posting an EPS of $3.16 and a revenue of $10.74 billion, outperforming Wall Street consensus by $0.14 and $962.27 million, respectively.
According to Insider Monkey’s data, 67 hedge funds were long Occidental Petroleum Corporation (NYSE:OXY) at the end of Q1 2022, up from 58 funds in the last quarter. Rajiv Jain’s GQG Partners held a notable position in the company, with 26.6 million shares worth $1.5 billion.
3. Activision Blizzard, Inc. (NASDAQ:ATVI)
Number of Hedge Fund Holders: 80
Activision Blizzard, Inc. (NASDAQ:ATVI) is an American company that publishes interactive entertainment content and services in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. Activision Blizzard, Inc. (NASDAQ:ATVI)’s sale to Microsoft is pending. Warren Buffett acquired a position in Activision Blizzard, Inc. (NASDAQ:ATVI) in Q4 2021, and in the second quarter of 2022, he raised his stake by 7%. The billionaire owned 68.40 million shares of Activision Blizzard, Inc. (NASDAQ:ATVI) in Q2, worth $5.3 billion, representing 1.77% of the total securities.
On August 4, Deutsche Bank analyst Benjamin Soff maintained a Hold rating on Activision Blizzard, Inc. (NASDAQ:ATVI) and lowered the price target on the stock to $84 from $95. The analyst has a “balanced view of the probability” of Microsoft’s pending acquisition of Activision Blizzard, Inc. (NASDAQ:ATVI) to receive regulatory authorization.
According to Insider Monkey’s data, 80 hedge funds were long Activision Blizzard, Inc. (NASDAQ:ATVI) at the end of Q1 2022, up from 70 funds in the preceding quarter. Matthew Halbower’s Pentwater Capital Management is a notable stakeholder of the company, with 7.32 million shares worth $586.40 million.
Here is what FPA U.S. Core Equity Fund has to say about Activision Blizzard, Inc. (NASDAQ:ATVI) in its Q1 2022 investor letter:
“One of the Fund’s biggest winners in the first quarter was Activision Blizzard. On January 18, 2022 Microsoft (NASDAQ:MSFT) agreed to purchase ATVI for $95.00 per share in an all-cash transaction. The Fund has been invested in ATVI since the second quarter of 2018.
The investment thesis was threefold. First, the greater than $200 billion gaming industry is the largest and fastest growing form of entertainment in the world. More than three billion people play games currently and the population of global gamers is expected to grow faster than global population growth this decade.14 Second, ATVI has some of the best intellectual property in the gaming industry including Warcraft, Diablo, Overwatch, Call of Duty and Candy Crush in addition to global eSports activities through Major League Gaming. Third, ATVI has had a pristine balance sheet with net cash over the past four years, generated robust free cash flow and traded at an undemanding valuation.
ATVI closed the quarter at $80.11—a nearly 16% discount to the acquisition price. Assuming it takes about a year for the deal to close, a 18.6% return seems to be good upside relative to the risk of a deal not closing due to anti -trust concerns. If the transaction closes it would make Microsoft the third-largest company in gaming by revenue behind Tencent and Sony. There is plenty of competition from these larger players as well as smaller competitors such as EA, Take-Two Interactive, Roblox and Epic Games’ Fortnite. The Fund remains invested in ATVI given the significant discount, but should the discount narrow in the coming quarters the Fund could reduce or eliminate the position.”
2. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 131
Warren Buffett added Apple Inc. (NASDAQ:AAPL) to the Berkshire portfolio in Q1 2016. The billionaire has consistently held on to this position, and in the second quarter of 2022, he lifted his Apple Inc. (NASDAQ:AAPL) stake by 1%. Berkshire Hathaway owned 894.80 million shares of the company in Q2 2022, worth $122.3 billion, representing 40.76% of the total 13F portfolio.
Credit Suisse analyst Shannon Cross on August 16 upgraded Apple Inc. (NASDAQ:AAPL) to Outperform from Neutral with a $201 price target. Apple Inc. (NASDAQ:AAPL)’s installed base of more than 1.8 billion devices increases market adoption of the company’s services and software solutions, creates loyal customer relationships with higher wallet share, and gives notable competitive advantages, the analyst told investors. Apple Inc. (NASDAQ:AAPL)’s sizable cash balance allows the company “ample dry powder” for organic investments, shareholder returns, and continued mergers and acquisitions, the analyst added.
Among the hedge funds tracked by Insider Monkey, Ken Fisher’s Fisher Asset Management featured as a significant stakeholder of Apple Inc. (NASDAQ:AAPL), with roughly 64 million shares worth more than $11 billion. Overall, 131 hedge funds were bullish on the stock at the conclusion of the first quarter of 2022.
Here is what Wedgewood Partners has to say about Apple Inc. (NASDAQ:AAPL) in its Q2 2022 investor letter:
“Apple grew revenues +9%, driven by +17% growth in the Services segment. While iPhone revenues grew a modest +5%, it was on an exceptional year ago comparison of +66%. iPhone continues to capture most industry smartphone profits by focusing on high-end price tiers. Apple is taking nearly two-thirds of the revenue share in the premium ($400 and above) smartphone segment. Further, most of the growth was driven by expansion in the “ultra-premium” price tier of $1000 or more per unit.[1] As we have highlighted in the past, Apple’s relentless focus on the development and integration between hardware (especially integrated circuits) and software continues to add significant value for customers of its products and services. We expect this favorable competitive dynamic to continue for the foreseeable future.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 271
Berkshire Hathaway acquired a position in Amazon.com, Inc. (NASDAQ:AMZN) in the first quarter of 2019. The hedge fund lifted its Amazon.com, Inc. (NASDAQ:AMZN) stake by a whopping 1900% in Q2 2022, holding 10.6 million shares worth $1.13 billion, representing 0.37% of the total 13F securities. On August 5, Amazon.com, Inc. (NASDAQ:AMZN) announced that it is acquiring iRobot for $61 per share in a deal valued at $1.7 billion.
On July 29, UBS analyst Lloyd Walmsley raised the price target on Amazon.com, Inc. (NASDAQ:AMZN) to $180 from $167 and maintained a Buy rating on the shares. The company posted solid Q2 results with “robust” backlog growth, while its Q3 revenue growth outlook of 13% to 17% also exceeded expectations, the analyst told investors in a bullish thesis. He added that Amazon.com, Inc. (NASDAQ:AMZN)’s fulfillment expense and COGS were both less than his estimates, though these were partly offset by higher marketing costs.
According to Insider Monkey’s data, Amazon.com, Inc. (NASDAQ:AMZN) was part of 271 hedge fund portfolios at the end of Q1 2022, compared to 279 funds in the earlier quarter. Jaime Sterne’s Skye Global Management is a notable position holder in the company as of Q1, with 740,500 shares worth $2.4 billion.
Here is what Alphyn Capital has to say about Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2022 investor letter:
“It is interesting to see how sentiment on Amazon went from positive to negative in one quarter, as it transpired that it too was not as immune to post-covid slowdowns as some, myself included, had expected. However, I feel confident that Amazon, as the apex predator in the e-commerce space, will navigate market softness better than most other retailers. Moreover, once it finishes with its current capex cycle, it will continue to improve margins. Andy Jassy is reportedly spending one-third of his time focused on capacity and supply issues in the retail division.”
You can also take a look at Cathie Wood’s 10 Favorite Stock Picks For The Rest of 2022 and 7 Energy Stocks to Buy Now According to Billionaire Leon Cooperman.
