The coronavirus bear market has been a big challenge for investors and money managers, yet the stocks managed to rebound powerfully. This only shows the spring up of confidence that the economy will eventually recuperate from the damage caused by the coronavirus.
Although the coronavirus still raises a concern with new variants emerging, major indexes have proven the capability to bounce back firmly from challenges and to reach fresh heights. The economy is springing up after the pandemic, let’s now take a look at the stocks that the smart money are buying right now!
The 13F Filing—which shows the portfolio big investors hold at the end of every quarter— should be analyzed keenly to know what moves the famous investors are up to from quarter to quarter.
Moreover, there’s a website called Dataroma, which tracks the portfolio of about 72 super investors, including Warren Buffett, Michael Burry, Michael Munger, Bill Ackman, and other famous investors. The platform tracks all the listed super investors to see what stocks they are buying or selling the most.
Here are the top 10 stocks that big investors around the world are buying now.
Anthem (ANTM)
Anthem is a U.S insurance provider that was bought by five of the super investors in the quarter. Currently, Anthem is having a strong revenue growth from an increase in Medicare membership, perhaps because of the pandemic. Understandably, as healthcare proved to be so important for the masses, investors see future growth in this company.
Amazon (AMZN)
Amazon made a lot of profit from the lockdown conditions during the pandemic, particularly in their e-commerce business.
Though Amazon is an ever-growing company, it only follows small revenue growth in the past, but it has grown in revenue quite a lot during the pandemic, leading to a really immense income and cash flow.
Amazon is a great business that has been consistently compounding over the years, and its P/E ratio is now sitting at 61.02. Despite the high P/E ratio, there are big money investors who added Amazon to their portfolio. Perhaps, they strongly believe that Amazon will continue growing in the years to come, which will eventually justify the valuation they gambled with.
Visa (V)
Visa is a multinational financial services company. The company makes money when someone uses a Visa card as a method of payment. Every time an individual uses a Visa card, and they will take a very small portion of money for their service. Although the corporation earns just a small amount from every financial service, they make quite a lot of profit because of its frequent use.
The company stocks suffered due to the lockdown, whereas the income and the revenue had a drop in 2020. However, the company is bouncing back, and six well-known investors listed in the Dataroma purchased it.
Altimeter Growth Corp. 2 (AGCV)
Altimeter Growth Corp. 2 is a special purpose acquisition company created to invest and bring in world-class technology companies. Technically, they operate a black check company to acquire businesses or assets through the capital exchange, stock purchase, asset acquisition, and reorganization. It is a publicly-traded shell company that levers money from investors to acquire private companies.
It has not bought anything yet right now, but AGCB has closed a deal of about $40 billion with Grab, which operates around Southeast Asia.
Aon Plc (AON)
AON is a multinational insurance company.
Warren Buffett, a well-respected investor, bought more than four million AON shares in the first quarter of 2021. Out of 8 Analysts, there are three that claim AON is a strong buy.
Wells Fargo (WFC)
Wells Fargo is one of the leading banks in the United States. Six big investors bought stocks during the first quarter of 2021, and 24 out of 72 big investors listed on Dataroma had these stocks in their portfolios. This stock is quite a popular one.
Over the past few quarters, Wells Fargo ranked 1st on the top stocks that most super investors buy in Quarter 3 and Quarter 4 of 2020 because the stock price plummeted. During the March crash in 2020, the prices were down until the last quarter. In 2021, the company will bounce back to where it was before the pandemic happened.
From the most bought stocks in 2020, its position went down to number 5 because it has regained its high value. Interestingly, those who bought WFC on the very last day of quarter 1 acquired a 20% increase just within two months of holding the stock.
Alibaba Group Holdings (BABA)
Alibaba has the biggest percentage impact in the entire super investor portfolio in this quarter. BABA is already about 20% of Charlie Munger’s portfolio and 14% of Mohnich Pabrai’s.
To those who are not so familiar with Alibaba, it is a big and famous Chinese e-commerce company that is incredibly similar to Amazon (AMZN) in the United States.
The company has more than 800,000,000 active customers and is continuously growing at full tilt without any signs of slowing down. Statistics from the Quick FS show a massive 10-year compound annual growth rate— 56.3% in revenue, 58.2% in assets, 48.2% in free cash flow, and 68.6% in earnings per share.
The image shows the free cash flow over the years, and the growth is almost unbelievable.
The 10-year median return on assets was 13.0%, the return on equity was 22.3%, and the return on invested capital was rolling to 30.4%. Yet, its current price is not big because the stocks had fallen in October 2020 because the Chinese government is not really getting along well with the company.
The Chinese government struck Alibaba with a $2.9 billion fine in an anti-monopoly probe. However, the super investors believed in the company so much that they didn’t stop them from investing.
UnitedHealth Group Inc. (UNH)
UnitedHealth Group (UNH) is an American Health and Insurance Group company— by far the largest insurance company by net premiums and the second-largest healthcare company after CVS. The company was $257.1 in revenue.
UNH was held by 16 out of 72 super investors within Dataroma.
Microsoft Corp. (MSFT)
Microsoft is one of the largest and well-known companies worldwide. Millions of people around the globe use the software they provide, may it be in business, school, or work. The growth still holds up, although it is already a large company.
The company’s 10-year compound annual growth rate in revenue is 8.6%, 13.3% in assets, 7.4% in free cash flow, and 10.6% in earnings per share. The management team maintains a healthy return of assets by 14.2%, return on equity by 28.8%, and return on invested capital by 23.5%.
Unlike the other technology stocks out in the market, Microsoft stocks are quite inexpensive.
Facebook Inc. (FB)
Facebook has been around for quite a few years, and it holds so much potential. The stock has a substantial margin, is very scalable, and is still set to grow over the coming years. It probably holds the cleanest balance sheet you could ever have— they don’t have debts, its compound annual growth rate is crazily high, and the management team is investing quite high in the business.
Out of 72 super investors in Dataroma 24 are holding Facebook stocks, which makes it the most owned stock by the investors within the platform. There are about 4.6 billion around the world that are accessing the internet. As of January 2021, 71% of them use at least one Facebook application monthly, and 58% of them use it daily.
