8 Big Company Stocks: We utilized the FinViz stock screener to identify mega-cap equities with an anticipated five-year EPS growth of greater than 15% to select the top stocks of large corporations. Insider Monkey maintained a database of 910 premier hedge funds and extracted the sentiment of hedge funds from it. Subsequently, these securities were ranked based on the number of hedge fund investors in the third quarter of 2023. Over the past decade, the top ten consensus stock choices of hedge funds have outperformed the S&P 500 Index by over 140 percentage points (see details here). Hence, we accord considerable significance to this frequently disregarded indicator.
Top Stocks for Major Corporations to Purchase
8. ASML Holding N.V. (NASDAQ: ASML)
The Dutch corporation ASML Holding N.V. ASML, listed on NASDAQ as (NASDAQ:ASML), produces and distributes semiconductor manufacturing equipment.
ASML Holding N.V. (NASDAQ:ASML) declared an interim dividend of EUR 1.45 per share on January 24. The dividend is scheduled to be paid on February 14.
Alongside Amazon.com, Inc. (NASDAQ:AMZN), Meta Platforms, Inc. (NASDAQ:META), and Microsoft Corporation (NASDAQ:MSFT), ASML Holding N.V. (NASDAQ:ASML) is among the top stocks for large corporations to purchase.
ClearBridge Investments issued the following investor letter regarding ASML Holding N.V. (NASDAQ: ASML) for the fourth quarter of 2023:
“An additional positive development is the acknowledgment of opportunities in generative artificial intelligence (AI) for non-U.S.-based businesses. Semiconductor equipment manufacturers ASML Holding N.V. (NASDAQ: ASML) and Tokyo Electron, which we consider to be enablers of AI, as well as enterprise software manufacturer SAP and IT consultant Accenture, which we consider to be facilitators of AI adoption in new product lines and/or enhanced business models, all experienced significant quarterly gains, whereas our IT holdings lagged behind their mega-cap U.S. counterparts for the majority of the year. These businesses are introducing new, higher-priced products augmented by artificial intelligence, which should have a positive effect on earnings in the near future.
ASML and Tokyo Electron, both of which operate in the IT sector, were the largest contributors to absolute returns on an individual stock basis during the quarter.
US STOCKS-Wall Street ends well down as Powell’s speech affirms hawkish rate stance
7. Merck & Co., Inc. (MRK: NYSE)
The New Jersey-based Merck & Co., Inc. (NYSE:MRK) is engaged in the discovery, development, production, and distribution of animal health products, prescription drugs, and vaccines, among other things.
Merck & Co., Inc. (NYSE:MRK) disclosed its intention to acquire Elanco Animal Health Incorporated’s (NYSE:ELAN) aqua division on February 5 for $1.3 billion in cash. Midway through 2024, the agreement is anticipated to be consummated, and in exchange, the organization will obtain two manufacturing facilities in Canada and Vietnam, in addition to a research facility in Chile.
Merck & Co., Inc. (NYSE:MRK) disclosed its non-GAAP fourth-quarter earnings per share (EPS) for the quarter of $0.03 on February 1, surpassing analyst expectations by $0.14. Quarterly revenue increased by 6% year-over-year to $14.6 billion, $120 million more than the initial projections.
Carillon Tower Advisers stated the following regarding Merck & Co., Inc. (NYSE: MRK) in an investor letter dated Q3 2023:
“We attribute Merck & Co., Inc.’s (NYSE:MRK) poor third-quarter performance primarily to macroeconomic factors,” Although the organization maintains strong clinical and fundamental performance, the biopharmaceutical sector as a whole has been underperforming recently due to investor preference for more cyclical industries.
6. NYSE: BAC Bank of America Corporation
Bank of America Corporation (NYSE:BAC) is a financial institution headquartered in North Carolina that provides an extensive array of services, such as credit and debit cards, wealth management, and more.
Analyst Betsy Graseck of Morgan Stanley upgraded shares of Bank of America Corporation (NYSE:BAC) from Equal Weight to Overweight on January 30. Additionally, she raised the price target for the stock from $32 to $41.
The quarterly dividend of $0.24 was declared by Bank of America Corporation (NYSE:BAC) on January 31. It is scheduled to be paid to shareholders of record on March 1 by March 29. As of the date of writing on February 9th, the dividend yield on the stock stood at 2.91%.
88 hedge funds held Bank of America Corporation (NYSE:BAC) stock during the third quarter, according to Insider Monkey’s database, which keeps track of 910 top hedge funds. Warren Buffett’s Berkshire Hathaway held a substantial stake in the corporation, amounting to 1.03 billion shares, with a valuation of $28.28 billion.
5. Netflix, Inc. (NASDAQ:NFLX)
Netflix, Inc. (NASDAQ:NFLX) is a California-based corporation that provides over-the-top streaming video subscription services in over 190 countries.
Argus increased the price target and maintained a buy rating on Netflix, Inc.’s (NASDAQ:NFLX) stock on January 26. The price target was increased from $575 to $660. The analyst highlighted the company’s emphasis on preventing password sharing, an advertising-supported service plan, and other aspects of its fourth quarter results.
Netflix, Inc. (NASDAQ:NFLX) reported its Q4 GAAP EPS of $2.11 on January 23. The $8.83 billion in revenue increased by 12.5% year-over-year, exceeding analyst expectations by $120 million.
Polen Capital made reference to Netflix, Inc. (NASDAQ:NFLX) in its investor letter for the fourth quarter of 2023. The following was stated:
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“Primary absolute and relative contributors to the performance of the Portfolio in the fourth quarter were Netflix, Inc. (NASDAQ:NFLX), ServiceNow, and Salesforce.
Amid the challenges posed by Netflix’s pandemic growth-over in 2022, the market appeared to hold the belief that the company’s prospects for further revenue or free cash flow expansion were dim. The company subsequently disclosed that more than 100 million households were utilizing Netflix without paying by leasing a paid user account, as the pandemic had slowed user growth. Meaningfully increasing our stake in Netflix during the summer of 2022, we did so after analyzing this information, gaining a better understanding of how the company could monetize shared credentials, and realizing that introducing an ad-supported subscription tier would benefit both Netflix and its customers. We perceived a distinct trajectory towards significantly enhanced monetization of an already resilient and distinctive platform through the sustained dedication to optimizing content expenditure efficiency and expanding free cash flow.
Presently, Netflix has made significant strides in monetizing shared credentials and establishing a framework for consumer autonomy; however, the increase in advertising tier subscribers is still in its nascent phase. Password sharing initiatives may have already harvested the lowest-hanging fruit, but our research indicates there should be substantial increases in free cash flow and revenue in the long run.
Netflix maintains its position as the most advantageous and lucrative streaming service, with prospects for further subscriber growth and pricing increases as it consistently proves its worth to customers. Furthermore, we anticipate substantial advertising revenue in the long run. Nevertheless, it appears that the market has begun to comprehend a portion of this. Due to this, in the fourth quarter, we reduced our holdings from roughly 8% to 5% of the total portfolio.
4. Eli Lilly & Company (LLY: NYSE)
The Indiana-based Eli Lilly and Company (NYSE:LLY) is engaged in the discovery, development, and marketing of human healthcare products.
Q4 non-GAAP EPS for Eli Lilly and Company (NYSE:LLY) was disclosed on February 6, amounting to $2.49, surpassing the consensus estimate by $0.12. The revenue increased by 28.1% year-over-year to $9.35 billion, exceeding expectations by $380 million.
Eli Lilly and Company (NYSE:LLY) was referenced in the investor letter for the fourth quarter of 2023 for Baron Funds. The following was stated:
“Stock selection in the subsector was also favorable due to therapeutics-focused pharmaceutical behemoth Eli Lilly and Company’s (NYSE:LLY) robust gains. Strong sales of the company’s blockbuster diabetes medication Mounjaro and ongoing enthusiasm surrounding the company’s obesity and diabetes franchises continued to propel Lilly’s stock higher, especially after Novo Nordisk released the results of its SELECT trial, which demonstrated a 20% relative risk reduction in overweight patients with cardiovascular disease and no prior history of diabetes.
Eli Lilly and Company is a multinational pharmaceutical corporation that, among other things, discovers, develops, distributes, and sells medications in the fields of oncology, neuroscience, diabetes, and immunology. Strong third-quarter sales of the blockbuster diabetes medication Mounjaro and continued investor interest in the company’s obesity and diabetes franchises contributed to the stock’s strong performance. We maintain our belief that Lilly is in an advantageous position to achieve substantial revenue and earnings growth rates beyond the end of the decade.
We hold a significant stake in Eli Lilly and Company, which we are confident will maintain its leadership position in the GLP-1 medicine class due to its extensive pipeline of next-generation GLP-1 medicines, Mounjaro and Zepbound.
3. AMD, Inc., an Advanced Micro Devices Company
Advanced Micro Devices, Inc. (NASDAQ:AMD) is a manufacturer and distributor of semiconductor devices and products headquartered in California.
A total of 34 Wall Street analysts have followed Advanced Micro Devices, Inc. (NASDAQ:AMD) for the past three months, with 29 of them maintaining a buy rating on the company’s shares. As of the date of composition on February 9, the mean price objective of $194.16 signified a positive movement of 12.79%.
The number of hedge funds that maintained a position in Advanced Micro Devices, Inc. (NASDAQ:AMD) stock increased from 112 to 110 in the third quarter. However, the aggregate value of these positions rose from $6.93 billion in Q2 to $9.156 billion in Q3. Ken Fisher, the leader of Fisher Asset Management, held the largest investment in the company with 27.768 million shares valued at $2.855 billion.
In an investor letter for the fourth quarter of 2023, White Falcon Capital Management made the following regarding Advanced Micro Devices, Inc. (NASDAQ: AMD):
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The market upheaval of 2022 caused the returns to originate, but they did not materialize until 2023. People believe that about 75% of the returns will occur in 2023. It is worth mentioning that the technology firms that we obtained in 2022—Amazon, Docebo, NU, Rover, and Advanced Micro Devices, Inc. (NASDAQ:AMD)—exhibited remarkable performance. Despite the apprehension and unpredictability of the bear market of 2022, it required courage and conviction to purchase and increase holdings in technology companies.
The portfolio’s top five holdings were as follows: Precious Metals royalty basket, Nu Holdings, AMD As well as Converge Technology Services and Amazon.com. AMD has served us well, but we must confess that it has become quite pricey. Even though AI was not in our initial investment thesis, Articles A and B, run by competent management teams, are a great example of how one can “luck” into investing in top companies (as was the case with Amazon).
2. Brinkman Hathaway Berkshire Inc. (NYSE: BRK-B)
Berkshire Hathaway Inc. (NYSE:BRK-B) is an Omaha, Nebraska-based multinational conglomerate. It provides a variety of services via its subsidiaries, including finance, freight rail transportation, and more. The insurance division of Berkshire Hathaway Inc. (NYSE:BRK-B) generates the majority of its revenue.
Based on data from Insider Monkey’s database, hedge fund sentiment toward Berkshire Hathaway Inc. (NYSE:BRK-B) was favorable in the third quarter, as 116 hedge funds held shares, an increase from 109 the previous quarter.
Berkshire Hathaway Inc. Investment experts rank (NYSE:BRK-B) as the seventh most favorable large company stock for investment purposes.
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Salesforce, Inc. (NYSE: CRM
A California-based corporation, Salesforce, Inc. (NYSE: CRM), provides software and applications for customer relationship management to clients around the globe. Our list ranks the company sixth, accommodating 122 hedge fund investors.
Rob Oliver, an analyst at Baird, raised the price target for Salesforce, Inc. (NYSE:CRM) shares from $300 to $310 on January 23. Oliver maintained the shares’ Outperform rating.
In addition to Salesforce, Inc. (NYSE: CRM), Meta Platforms, Inc. (NASDAQ: META), Amazon.com, Inc. (NASDAQ: AMZN), and Microsoft Corporation (NASDAQ: MSFT), these are among the most advantageous stocks for large corporations to purchase.
Polen Capital issued the subsequent statement concerning Salesforce, Inc. (NYSE: CRM) in its investor letter for the fourth quarter of 2023:
During the fourth quarter, Netflix, ServiceNow, and Salesforce, Inc. Both in absolute value and relative importance, CRM contributed most to the performance of the portfolio.
Despite market concerns about the weakened macroeconomy and the rate of adoption of its core CRM product, Salesforce has maintained a healthy rate of revenue growth. Its most established and significant offerings continue to grow at double digits, namely service and sales cloud.
Additionally, management recognized that their cost structure had become excessively inflated, particularly with regard to salespeople. During the past year and a half, the company has expanded operating margins and earnings. As a result, Salesforce has shed excessive fat, rather than lost innovation and sales prowess.”
