13 Best Stocks To Buy Now According To Billionaire Cliff Asness
In this article, we discuss the 13 best stocks to buy now according to billionaire Cliff Asness. If you want to read about some more stocks in the Asness portfolio, go directly to 5 Best Stocks To Buy Now According To Billionaire Cliff Asness.
Cliff Asness, the head of AQR Capital Management, stands out as one of Wall Street's most accomplished hedge fund managers. AQR, short for Applied Quantitative Research, traces its origins to Goldman Sachs' asset management division, a leading global investment bank. With an initial investment of $10 million from a select group of investors in 1995, Asness utilized quantitative methods to swiftly expand the Goldman Sachs Global Alpha Fund to over $100 million within a matter of months. Despite Asness departing from Goldman Sachs to establish his hedge fund in 1998, the Alpha Fund continued its growth trajectory, managing assets worth $12 billion by 2007.
Cliff Asness often appears on television and podcasts, where he shares his expertise on financial matters. In a Bloomberg podcast last year, he expressed apprehension about overinflated stock prices, cautioned about challenges in the commercial real estate sector, and even forecasted the possibility of a looming financial crisis.
“My biggest concern is stocks and bonds seem to be taking a very, very different view. Bonds are pricing in multiple, severe cuts over the next year to two years. That is a forecast for a recession, and not a mild one. Equities are whistling past the graveyard. If inflation stays sticky, or it comes down because we enter a non-trivial recession, it’s equities that I think are a scary place. They’re not priced very consistently with bonds, and we’re going to find out who’s right in the next year.”
Asness recently grabbed attention by reiterating his stance on emerging-market equities outperforming the US market, despite this trade's lackluster performance in recent years. AQR allocates approximately $8 billion of its $99 billion under management to an emerging-market equities portfolio, managed collaboratively like its other funds. This perspective challenging the dominance of US stocks aligns AQR with other major players in the industry, such as Morgan Stanley Investment Management.
In addition, the billionaire's hedge fund closed out 2023 with impressive double-digit returns across several of its funds, driven by strong performance in stock selection, bonds, European natural gas, and iron ore, as reported by Reuters. The investment manager achieved a net return of 18.5% for the year in its AQR Absolute Return strategy, its longest-running multi-strategy fund. This marked a notable comparison to the almost 44% net return achieved in 2022. Asness had predicted in January 2023 that this particular investing approach, involving "going long cheap companies and shorting expensive ones" within specific sectors, would be particularly appealing for the year. With that in mind, lets look at some of the top stocks in the AQR Capital Management portfolio, which include the likes of Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG).
Cliff Asness of AQR Capital Management
Our Methodology
These were picked from the investment portfolio of AQR Capital Management at the end of the fourth quarter of 2023. To provide readers with a more comprehensive overview of the companies, the analyst ratings for each firm are mentioned alongside other details. A database of around 933 elite hedge funds tracked by Insider Monkey in the fourth quarter of 2023 was used to quantify the popularity of each stock in the hedge fund universe.
13. Humana Inc. (NYSE:HUM)
Number of Hedge Fund Holders: 86
AQR Capital Management's Stake: $351.6 million
Humana Inc. (NYSE:HUM), headquartered in Kentucky, offers fully insured medical and specialty health insurance benefits to its customers. Latest 13F filings show that AQR Capital Management owned 1.7 million shares of Humana Inc. (NYSE:HUM) at the end of the fourth quarter of 2023 worth $351.6 million.
On December 12, Argus upgraded Humana Inc. (NYSE:HUM)’s stock from a Hold to a Buy rating, with a $550 price target. This upgrade followed the company's decision to discontinue merger discussions with The Cigna Group (NYSE:CI), a move perceived to have multiple downsides according to the analyst.
By the end of last year’s fourth quarter, 86 out of the 933 hedge funds covered by Insider Monkey’s research had bought a stake in Humana Inc. (NYSE:HUM). Ken Griffin’s Citadel Investment Group owned the biggest stake which was worth $688 million.
Much like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), Humana Inc. (NYSE:HUM) is one of the best stocks to buy according to billionaire Cliff Asness.
12. The Cigna Group (NYSE:CI)
Number of Hedge Fund Holders: 76
AQR Capital Management's Stake: $352.6 million
The Cigna Group (NYSE:CI) is a for-profit American multinational managed healthcare and insurance company headquartered in Bloomfield, Connecticut. With a global presence spanning 30 countries, the company serves over 86 million customers and continues to be a prominent leader in providing global healthcare benefits. Securities filings show that AQR Capital Management owned over 1.179 million shares of The Cigna Group (NYSE:CI) at the end of December 2023 worth $352.6 million, representing 0.66% of the portfolio.
As of the close of Q4 2023, 76 hedge funds in Insider Monkey’s database reported having stakes in The Cigna Group (NYSE:CI), a slight increase from the previous quarter. The consolidated worth of these stakes is more than $4.49 billion.
Davis Funds mentioned The Cigna Group (NYSE:CI) in its Q3 2023 investor letter. Here is what the firm has to say:
“In the attractive healthcare sector, we look beyond the obvious to identify businesses that simultaneously have exposure to this growth industry and also trade at low prices. We’re especially drawn to companies like Cigna Group, whose products or services play a part in helping to mitigate healthcare’s constantly rising costs. The healthcare industry has been a growing part of the U.S. economy for decades. As a result, many companies in this sector trade at high valuations reflecting their robust but well-known reputation for growth. For value-conscious investors like us, investing in healthcare requires looking beyond the obvious to identify businesses that have exposure to this growth industry but which trade at low prices. Furthermore, recognizing that the constantly rising cost of healthcare cannot go on forever, we have been particularly drawn to companies whose products or services play some role in managing or reducing the cost of care. As a result, we have positions in Cigna Group, a well-regarded provider of managed care.
11. PulteGroup, Inc. (NYSE:PHM)
Number of Hedge Fund Holders: 38
AQR Capital Management's Stake: $379.78 million
PulteGroup, Inc. (NYSE:PHM) is a prominent American residential home-construction company headquartered in Atlanta, Georgia, United States. As of 2023, it held the position as the third-largest home-construction company in the United States in terms of the number of homes closed. Cliff Asness’ investment firm reduced its stake in PulteGroup, Inc. (NYSE:PHM) by 11% to $379.78 million in the fourth quarter of 2023.
In the fourth quarter, PulteGroup, Inc. (NYSE:PHM) reported a profit of $711 million or $3.28 per share, a decrease from $882 million or $3.85 per share in the same period last year. The company sold 7,615 homes, which was below expectations, at an average price of $547,000, down from $561,000 a year ago. The decline in home sales was attributed to the surge in the average rate on a 30-year mortgage to nearly 8%, the highest level in two decades. These high rates led many potential homebuyers to postpone their purchases and prompted sellers to offer concessions. However, as mortgage rates moderated in the latter half of the quarter, PulteGroup, Inc. (NYSE:PHM) experienced a 57% increase in net new orders to 6,214 homes valued at approximately $3.4 billion. This growth was driven by a more favorable selling environment and a decrease in cancellations, which decreased to 9% of backlog from 11% in the same quarter of the previous year.
After looking through 933 hedge funds for their fourth quarter of 2023 shareholdings, Insider Monkey discovered that 38 were the firm’s investors.
10. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 91
AQR Capital Management's Stake: $436.8 million
Broadcom Inc. (NASDAQ:AVGO) is a leading global technology company specializing in the design, development, and supply of semiconductor and infrastructure software solutions. Catering to a wide array of industries such as networking, storage, broadband, wireless, and industrial sectors, Broadcom Inc. (NASDAQ:AVGO) has established itself as a key player in the tech industry. Latest 13F filings show that AQR Capital Management owned 391,343 shares of Broadcom Inc. (NASDAQ:AVGO) at the end of December 2023 worth $436.8 million
According to data from Insider Monkey’s fourth quarter database, Ken Fisher’s Fisher Asset Management holds the largest stake in Broadcom Inc. (NASDAQ:AVGO), with 2.13 million shares valued at $2.37 billion. Overall, 91 hedge funds expressed bullish sentiment towards the stock.
9. Adobe Inc (NASDAQ:ADBE)
Number of Hedge Fund Investors: 105
AQR Capital Management's Stake: $448.26 million
Headquartered in California, Adobe Inc. (NASDAQ:ADBE) stands as a versatile software company, offering an extensive range of products and solutions tailored to empower individuals, teams, and enterprises in content creation, publishing, and promotion. Renowned across various sectors, including content creators, students, and professionals, Adobe Inc. (NASDAQ:ADBE) also operates a Digital Experience segment, catering to brands and businesses in managing, implementing, and monetizing customer experiences. Securities filings indicate that AQR Capital Management held over 751,372 shares of Adobe Inc. (NASDAQ:ADBE) as of the end of December 2023, valued at $448.26 million, accounting for 0.84% of its portfolio.
On December 13, Adobe Inc. (NASDAQ:ADBE) reported a Q4 non-GAAP EPS of $4.27 and revenue of $5.05 billion, surpassing Wall Street estimates by $0.13 and $30 million, respectively. Notably, the company repurchased approximately 1.8 million shares during the fourth quarter of 2023.
After digging through 933 hedge fund portfolios for 2023’s December quarter, Insider Monkey found that 105 had held a stake in Adobe Inc. (NASDAQ:ADBE). Ken Fisher’s Fisher Asset Management was the biggest investor, owning 4.5 million shares that are worth $2.7 billion.
8. Cisco Systems, Inc. (NASDAQ:CSCO)
Number of Hedge Fund Holders: 60
AQR Capital Management's Stake: $614.9 million
Cisco Systems, Inc. (NASDAQ:CSCO) is a global corporation that specializes in designing, manufacturing, and selling networking and communication products worldwide. Its product portfolio includes switches, routers, wireless products, and computing solutions. At the end of the third quarter of 2023, Cliff Asness held over 12.17 million shares of Cisco Systems, Inc. (NASDAQ:CSCO), valued at $614.9 million, representing 1.15% of the portfolio.
On November 15, Cisco Systems, Inc. (NASDAQ:CSCO) released its financial results for the first fiscal quarter of 2024. The company reported a non-GAAP EPS of $1.11 and revenue of $14.67 billion, surpassing Wall Street estimates by $0.08 and $40 million, respectively.
At the end of the fourth quarter of 2023, 60 hedge funds in the database of Insider Monkey held stakes worth $2.71 billion in Cisco Systems, Inc. (NASDAQ:CSCO), compared to 64 in the previous quarter worth $1.64 billion.
Here is what Oakmark Funds has to say about Cisco Systems, Inc. (NASDAQ:CSCO) in its Q3 2023 investor letter:
“Cisco Systems, Inc. (NASDAQ:CSCO) is the leading networking solutions company. Networking equipment becomes more important as businesses modernize their IT infrastructure, and Cisco is well positioned to capture this demand given its broad portfolio and highly effective go-to-market strategy. Cisco is transitioning away from selling mainly transactional hardware and toward selling more software and subscriptions. This shift is expected to accelerate revenue growth, improve operating margins and build recurring revenue. Despite these notable business improvements, Cisco still trades near a trough valuation relative to the S&P 500 Index. More recently, Cisco announced its intention to acquire Splunk, a leader in security and observability, adding to its already strong position in the increasingly important security market. At a low-teens multiple of our estimate of normalized earnings, Cisco is trading comfortably below our estimate of intrinsic value.”
7. Meta Platforms Inc (NASDAQ:META)
Number of Hedge Fund Investors: 242
AQR Capital Management's Stake: $636.6 million
Meta Platforms, Inc. (NASDAQ:META) is an American multinational technology company that provides social networking services, advertising solutions, and more through various platforms, including Facebook, Instagram, Threads, and WhatsApp. AQR Capital Management owned 1.79 million shares of Meta Platforms, Inc. (NASDAQ:META) at the end of December 2023, valued at $636.6 million, representing 1.19% of the portfolio of the fund.
On February 1, Meta Platforms, Inc. (NASDAQ:META) declared its first-ever quarterly dividend of $0.50, payable by March 26 to the shareholders of record on February 22. As of February 11, the stock’s dividend yield was 0.43%.
A total of 242 hedge funds in Insider Monkey’s database had stakes in Meta Platforms Inc (NASDAQ:META). The biggest stakeholder in Meta Platforms Inc (NASDAQ:META) was Rajiv Jain’s GQG Partners which owns a $3.95 billion stake in Meta Platforms Inc (NASDAQ:META).
Meta Platforms, Inc. (NASDAQ:META) was mentioned in First Pacific Advisors’ fourth quarter 2023 investor letter. Here is what it said:
“Meta Platforms, Inc. (NASDAQ:META) saw a welcome recovery in engagement and revenue year-to-date following a tough 2022. The company has continued to offer new solutions that allow advertisers to target customers effectively and efficiently via one of the world’s leading digital platforms. Moreover, operating profits are rising due to an organization-wide focus on improving productivity and accelerating the time to market for new products. However, overall profitability continues to be weighed down by losses in the Reality Labs segment. But, there is positive optionality that Meta will emerge from the AI arms race as one of the leading players in the industry.”
Meta Platforms, Inc. (NASDAQ:META), Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG) are some of the best stocks to buy according to Cliff Asness.
6. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 166
AQR Capital Management's Stake: $685.03 million
Alphabet Inc. (NASDAQ:GOOG), a major player in the technology sector, is renowned for its flagship product, Google, which handles billions of daily queries as a leading search engine. The company's portfolio includes various platforms for video streaming and productivity, with YouTube being a standout asset. Additionally, Alphabet Inc. (NASDAQ:GOOG) is involved in the retail of electronic devices, offering a range of products such as smartphones, ultra-thin notebooks, and speakers. Regulatory filings reveal that AQR Capital Management owned over 4.9 million shares of Alphabet Inc. (NASDAQ:GOOG) at the end of the fourth quarter of 2023, valued at $685.03 million, representing 1.28% of the portfolio.
As of the close of the fourth quarter of 2023, 166 hedge funds held stakes in Alphabet Inc. (NASDAQ:GOOG). The most significant stakeholder during this period was Ken Fisher’s Fisher Asset Management, which owned a $6.3 billion stake in Alphabet Inc. (NASDAQ:GOOG).
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Disclosure. None. 13 Best Stocks To Buy Now According To Billionaire Cliff Asness is originally published on Insider Monkey.
