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10 Best Vanguard Stocks to Buy Now

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·15 min read
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  • AAPL
  • BRK-B
  • MSFT
  • TSLA
  • AMZN
  • JPM-PL
  • V
  • JNJ

In this article, we discuss the 10 best Vanguard stocks to buy now based on Vanguard Group's holdings.. If you want to skip our detailed analysis of these stocks, go directly to the 5 Best Vanguard Stocks to Buy Now.

Vanguard stocks, which we will analyze in this article based on Vanguard Group's holdings, are popular among buy-and-hold investors, who acquire stocks, ETFs, bonds, and other securities and retain them in their portfolios for an extended time. The Pennsylvania-based asset management firm provides low-cost index funds that help regular people grow their retirement funds over time. The investment firm offers commission-free access to 209 US funds and 232 non-US funds in the international market. As of January 31, 2021, Vanguard manages more than $7 trillion global assets under management.

Passive investing has gained more popularity through the years. According to the Investment Company Industry 2021 review, index mutual fund total net assets have increased significantly over the last twenty years, from $384 billion to $4.8 trillion. Meanwhile, Vanguard Group Inc offers investment advice and services to more than 30 million investors worldwide.

Tech giants Apple Inc. (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), and Amazon.com, Inc. (NASDAQ: AMZN) are some of the top holdings of Vanguard Group Inc. Apple Inc. (NASDAQ: AAPL) has an enormous market value of $2.4 trillion. In the fall, the California-based tech corporation is scheduled to unveil the latest generation of iPhones. Currently, 8 Wall Street analysts are bullish on AAPL stock, with an average price target of $156.01 per share. In the second quarter of 2021, Apple Inc.'s (NASDAQ: AAPL) revenue increased 54% to 89.6 billion, up from $58.3 billion in the same period in 2020. At the end of the first quarter, Vanguard Group Inc owned 610,849,992 shares of Apple Inc. (NASDAQ: AAPL) worth $151 billion, representing 4.17% of Vanguard's investment portfolio. The stock has gained 14% in the last month.

California-based Microsoft Corporation (NASDAQ: MSFT), a part of Vanguard stocks, is gaining investors' attention. Due to the ongoing demand for cloud computing services that cater to work-from-home consumers, Goldman Sachs became extremely bullish on Microsoft Corporation (NASDAQ: MSFT) in March. On June 28, Jefferies also maintained a Buy rating on Microsoft Corporation, with a price target of $310 per share. At the end of the first quarter, Vanguard Group Inc owned 610,849,992 shares of Microsoft Corporation (NASDAQ: MSFT) worth $144 billion, representing 3.96% of Vanguard's investment portfolio. The stock has gained 8% in the last month.

Online retail giant Amazon.com, Inc. (NASDAQ: AMZN) has also gained 11.4% in the last month. On July 7, AMZN shares achieved an all-time high of $3,645 per share, only one day after Jeff Bezos' predecessor, Andy Jassy, took over as Amazon.com, Inc. (NASDAQ: AMZN). As of July 8, AMZN shares traded at $3,731.41. At the end of the first quarter, Vanguard Group Inc owned 32,614,254 shares of Amazon.com, Inc. (NASDAQ: AMZN) worth $100 billion, representing 2.78% of Vanguard's investment portfolio.

10 Best Vanguard Stocks to Buy Now
10 Best Vanguard Stocks to Buy Now

Photo by Austin Distel on Unsplash

While Vanguard Group Inc retained its reputation in the last decades, the hedge fund industry as a whole has had its reputation tarnished in the previous decade, when its hedged returns failed to keep up with the unhedged returns of market indices. On the other hand, Insider Monkey's research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26, 2021, our monthly newsletter's stock picks returned 206.8%, vs. 91.0% for the SPY. Our stock picks outperformed the market by more than 115 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.

We chose the top 10 Vanguard Group Inc holdings, taking into account analyst ratings, fundamentals, and future development potential, to provide you with an accurate list of the best Vanguard stocks to buy right now. With this context in mind, here is our list of the 10 best Vanguard stocks to buy now.

Best Vanguard Stocks to Buy Now

10. Visa Inc. (NYSE: V)

Vanguard's Stake Value: $30,304,201,000 Percentage of Vanguard Group's 13F Portfolio: 0.83% Number of Hedge Fund Holders: 164

We start our list of the 10 best Vanguard stocks to buy now with the digital payment network giant Visa Inc. (NYSE: V). In June, Visa Inc. stated its plans to acquire Tink, a Swedish third-party open banking platform, for $2.2 billion. (NYSE: V) currently pays an annual dividend of $1.28 per share, with a 0.54% dividend yield. Visa Inc. shares have returned 32% to investors in the past year.

The company has a market cap of $528 billion. The firm reported GAAP net income of $3.0 billion or $1.38 per share in the second quarter of 2021, down 2% and flat year over year. The company's second-quarter net revenue contracted 2% to $5.7 billion due to decreased payments volume. On June 8, Credit Suisse maintained an Outperform rating on Visa Inc. with a price target of $285 per share.

At the end of the first quarter of 2021, institutional investor Vanguard Group Inc owned 143,126,627 shares in the firm worth $30.3 billion. There were 164 hedge funds in the database of Insider Monkey held stakes worth $26.6 billion in Visa Inc. (NYSE: V), down from 166 the preceding quarter worth $23.6 billion.

Like Apple Inc. (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), Tesla, Inc. (NASDAQ: TSLA), Amazon.com, Inc. (NASDAQ: AMZN) and Johnson & Johnson (NYSE: JNJ), Visa Inc. (NYSE: V) is one of the best Vanguard stocks to buy.

9. Berkshire Hathaway Inc. (NYSE: BRK-A)

Vanguard's Stake Value: $34,690,441,000 Percentage of Vanguard Group's 13F Portfolio: 0.95% Number of Hedge Fund Holders: 111

Berkshire Hathaway Inc. (NYSE: BRK-A) ranks 9th on the list of 10 best Vanguard stocks to buy now. Once just a textile company, the Omaha-based holding company run by Warren Buffett expanded its business in the sectors of insurance, utility, renewable energy, freight rail transportation, and retail. Last month, Berkshire Hathaway Inc. made a $500 million investment in Brazil's most prominent digital bank, Nubank. Shares of BRK-A increased 54% in the last twelve months.

The company has a market cap of over $637 billion. Berkshire Hathaway Inc. (NYSE: BRK-A)'s first-quarter revenue grew 5% to $64.6 billion, up from $61.3 billion in the same quarter in 2020. In the previous year, the company's overall stock buybacks amounted to $24.7 billion.

At the end of the first quarter of 2021, institutional investor Vanguard Group Inc owned 135,790,660 shares in the firm worth $34.7 billion. Out of the hedge funds being tracked by Insider Monkey, New Jersey-based asset management firm Eagle Capital Management is a leading shareholder in Berkshire Hathaway Inc. (NYSE: BRK-B) with 4.7 million shares worth more than $1.2 million.

In their Q4 2020 investor letter, GoodHaven Capital Management mentioned Berkshire Hathaway Inc. (NYSE: BRK-B) and emphasized their views on the company. Here is what the fund said:

"Berkshire's recent operating results have been solid. The investment portfolio has rebounded dramatically, the stock buyback pace accelerated in Q3 2020, and they have been more active in putting cash to work. Our material Berkshire purchases made earlier in the year, as the markets swooned and critics lambasted Berkshire, now look even better. A glance at some of Berkshire's recent new investments (Dominion's natural gas assets, Barrick Gold, EW Scripps, Snowflake, and a basket of Japanese trading companies) points to corporate culture, management team, and organization that continues to evolve. I'm not surprised, but am glad to see the proof of that part of our thesis. Sadly, we all know that one way or another Mr. Buffett and Mr. Munger's tenure at Berkshire will end one of these days. That time – whenever it is – is not the time to evaluate and react to how one feels about a post-Buffett/Munger Berkshire – that time was yesterday – which we have. Berkshire engenders a lot of criticism for perceived "underperformance". However, from mid-2015 through mid-2020 Berkshire's book value/share growth slightly beat a much riskier S&P 500, though the stock lagged. This is part of the opportunity. We estimate that Berkshire at present sells for only about 1.2x book value and materially below our estimate of intrinsic value using Mr. Buffett's "five asset laden groves" methodology."

8. Johnson & Johnson (NYSE: JNJ)

Vanguard's Stake Value: $37,756,232,000 Percentage of Vanguard Group's 13F Portfolio: 1.04% Number of Hedge Fund Holders: 81

Johnson & Johnson (NYSE: JNJ) ranks 8th on the list of 10 best Vanguard stocks to buy now. The New Jersey-based pharmaceutical giant sells healthcare products and medical devices. At the end of the first quarter, Vanguard Group Inc owned 229,730,647 shares of Johnson & Johnson (NYSE: JNJ) worth $37.8 billion, representing 1.04% of Vanguard's investment portfolio. Johnson & Johnson (NYSE: JNJ) currently pays its shareholders an annual dividend of $4.24 per share, with a 2.50% dividend yield. Johnson & Johnson (NYSE: JNJ) shares have returned 18.3% to investors in the past twelve months.

Johnson & Johnson (NYSE: JNJ) has a market cap of $446 billion. In the first quarter of 2021, Johnson & Johnson reported net earnings of $6.2 billion or $2.32 diluted earnings per share, up from $2.17 diluted EPS in the previous year. The company's first-quarter revenue grew 7.9% to $22.3 billion, up from $20.6 billion in the same period in 2020. Analysts expect Johnson & Johnson (NYSE: JNJ) to post a $2.28 earnings per share on the following earnings report on July 21, representing a 36.53% increase year over year.

At the end of the first quarter of 2021, 81 hedge funds in the database of Insider Monkey held stakes worth $6.91 billion in Johnson & Johnson (NYSE: JNJ).

Like Apple Inc. (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), Tesla, Inc. (NASDAQ: TSLA), Amazon.com, Inc. (NASDAQ: AMZN) and JPMorgan Chase & Co. (NYSE: JPM), Johnson & Johnson (NYSE: JNJ) is one of the best Vanguard stocks to buy.

7. Tesla, Inc. (NASDAQ: TSLA)

Vanguard's Stake Value: $39,138,521,000 Percentage of Vanguard Group's 13F Portfolio: 1.07% Number of Hedge Fund Holders: 62

Tesla, Inc. (NASDAQ: TSLA) ranks 7th on the list of 10 best Vanguard stocks to buy now. The California-based EV company was founded in 2003 and has grown to be one of the biggest manufacturers of fully electric self-driving cars globally. Vanguard Group became the third-largest shareholder in Tesla, Inc. (NASDAQ: TSLA) when the firm bought 57 million shares in February 2021. At the end of the first quarter, Vanguard Group Inc owned 58,596,739 shares of Tesla, Inc. (NASDAQ: TSLA) worth $39.1 billion, representing 1.07% of Vanguard's investment portfolio. Shares of TSLA jumped 8% in the last month.

The company has a market cap of $621 billion. The company's first-quarter revenue was $10.4 billion, up 74% from $5.98 billion in the same quarter the previous year. In the second quarter of 2021, Tesla, Inc. (NASDAQ: TSLA) produced and delivered over 200,000 electric automobiles, up from the prior record of 184,800 in the first quarter and 90,900 a year ago. JPM analyst Ryan Brinkman boosted his second-quarter earnings-per-share projection to 91 cents from 86 cents for overcoming forecasts in-car deliveries. On July 7, J.P. Morgan maintained an Underweight rating on Tesla, Inc. (NASDAQ: TSLA), with a raised price target of $160 per share.

At the end of the first quarter of 2021, 62 hedge funds in the database of Insider Monkey held stakes worth $10.01 billion in Tesla, Inc. (NASDAQ: TSLA), down from 68 the preceding quarter worth $12.3 billion.

Like Apple Inc. (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), Amazon.com, Inc. (NASDAQ: AMZN) and Johnson & Johnson (NYSE: JNJ), Tesla, Inc. (NASDAQ: TSLA) is one of the best Vanguard stocks to buy.

In the Q4 2020 Investor Letter, Baron Opportunity Fund highlighted a few stocks, and Tesla Inc. (NASDAQ: TSLA) is one of them. Here is what the fund said:

"Tesla, Inc. designs, manufactures and sells fully electric vehicles, solar products, and energy storage solutions. The stock increased on strong financial results, including profitability that exceeded market forecasts and strong growth across different geographies and vehicle programs. Indeed, in the third quarter, Tesla delivered almost 140,000 total vehicles – with strong unit-level economics of 27.7% GAAP automotive gross profit margins – and another quarter of GAAP profitability and strong free cash flow (almost $1.4 billion). Recently, Tesla announced a record of over 180,000 total vehicle deliveries for the fourth quarter, effectively hitting its goal of 500,000 deliveries for the calendar year, a projection given before the COVID pandemic. In addition, we believe newly released full self-driving functionality should yield further improvements in unit economics and open exciting new growth opportunities. Lastly, Tesla joined the S&P 500 Index, a meaningful milestone that significantly expands the potential shareholder base."

6. JPMorgan Chase & Co. (NYSE: JPM)

Vanguard's Stake Value: $40,046,861,000 Percentage of Vanguard Group's 13F Portfolio: 1.10% Number of Hedge Fund Holders: 111

JPMorgan Chase & Co. (NYSE: JPM) ranks 6th on the list of 10 best Vanguard stocks to buy now. The New York-based company was founded in 1799 and offers financial services globally. JPMorgan Chase & Co. is expanding its sustainable investment initiatives, announcing last month that it will purchase OpenInvest. This San Francisco-based start-up specializes in value-based investing and ESG portfolio management. At the end of the first quarter, Vanguard Group Inc owned 263,068,129 shares of JPMorgan Chase & Co. (NYSE: JPM) worth $40 billion, representing 1.10% of Vanguard's investment portfolio. JPM shares have returned 65% to investors in the past twelve months.

In June, JPMorgan Chase & Co. (NYSE: JPM) acquired the U.K.-based digital wealth manager Nutmeg for approximately $964 million. The British fintech start-up is one of the fastest-growing digital banks in the U.K., with over $4.8 billion assets under management.

The company has a market cap of $465 billion. The bank made $14.3 billion in the first quarter, or $4.50 per share, beating Refinitiv analysts' expectations of $3.10 per share. The company's revenue in the first quarter of 2021 came in at $32.3 billion, up 14% year over year. On June 8, Wells Fargo maintained an Overweight rating on JPMorgan Chase & Co., with a price target of $200 per share.

At the end of the first quarter of 2021, 111 hedge funds in the database of Insider Monkey held stakes worth $2.25 billion in JPMorgan Chase & Co. (NYSE: JPM), down from 112 the preceding quarter worth $12.3 billion.

Like Apple Inc. (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), Tesla, Inc. (NASDAQ: TSLA), Amazon.com, Inc. (NASDAQ: AMZN) and Johnson & Johnson (NYSE: JNJ), JPMorgan Chase & Co. (NYSE: JPM) is one of the best Vanguard stocks to buy.

In the Q4 2020 Investor Letter, Bretton Fund spoke about JPMorgan Chase & Co (NYSE: JPM). Here is what the fund said:

"After a strong performance in 2019, we wrote this about our bank stocks in last year's report: "There will be another recession sooner than later, and our banks will see larger loans losses, but we think this is more than priced into the stock, and our banks are well reserved for that eventuality." Little did we know "sooner" really meant "a few weeks from now." Despite the economic shock, the banks still have huge capital cushions that can absorb large loan losses. Our remaining bank investments, JPMorgan and Bank of America, increased their reserves significantly at the beginning of the Covid-19 crisis in anticipation of imminent loan defaults, but with the government stimulus and perhaps a more resilient economy than many would have guessed, actual loan losses are up only slightly. They might happen later in 2021, but with an additional stimulus package and the vaccine rolling out, the large-scale losses may not be as bad as most people predicted. The bigger drag on the bank's earnings power is lower rates, which in our opinion will persist for a long time. Despite this drag, we estimate both JPMorgan and Bank of America will continue to grow revenue and earnings over the next few years, while we believe their stocks remain bargains in a somewhat expensive market. JPMorgan's earnings per share declined 17% last year, and its stock returned -5.5%. Bank of America's earnings, which are more sensitive to interest rates, were down 32%, and its stock returned -11.6%."

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Disclose. None. 10 Best Vanguard Stocks to Buy Now is originally published on Insider Monkey.