Ken Fisher’s 15 New Purchases/Additions
In this article, we discuss Ken Fisher's 15 new purchases/additions. If you want to skip the investment philosophy of Ken Fisher and the detailed analysis of Fisher Asset Management, go directly to Ken Fisher's 5 New Purchases/Additions.
Ken Fisher, the founder, executive chairman and co-chief investment officer of Fisher Asset Management, predicts that the market conditions in 2023 will resemble those of 1967, as outlined in an article posted in the New York Post. In 1966, inflation was high, there were concerns about a possible recession, and the US Federal Reserve was increasing benchmark interest rates to counter inflation. The S&P 500 Index experienced a 22% decline that year, similar to the 2022 market conditions. However, the market recovered in the fourth quarter of 1966, with a 6% gain, and recorded a YoY rise of 24% in 1967. The current market has also staged a comeback, with a 7.2% gain since October 2022.
In one of the interviews, Ken Fisher suggested that investors can position their portfolio to benefit from a new bull market bounce by investing in categories that have dropped the most during the bear market. He said that we are currently in the early stages of a new bull market that began in October 2022 and expects sectors that were hurt the most last year, such as information technology and other growth-oriented sectors, to perform well in the first part of this new bull market. Ken Fisher also noted that sectors and categories that did well during the recent bear market, such as energy, tend to underperform during the initial bull market bounce, which may seem counterintuitive to some investors.
Regardless of whether a new bull market is already underway or not, Ken advised investors to expect the market to bounce in the near future and suggests investing in categories that suffered the most during the downturn as a way to benefit during a market recovery.
Ken Fisher’s Fisher Asset Management 13F portfolio value also increased from $133.41 billion in Q3 to $147.93 billion in Q4 2022. The fund made 145 new purchases in the fourth quarter, additional purchases in 440 stocks, sold out 168 equities, and reduced holdings in 389 stocks. Some of the popular companies in which Ken Fisher made additional/new purchases in his Q4 portfolio include Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), and General Motors Company (NYSE:GM).
For this article, we focused on the top 100 positions and identified the biggest additions/purchases in the fourth quarter of 2022. Then, we picked the top 15 new purchases/additions in Ken Fisher's top 100 positions.
Ken Fisher's New Purchases/Additions
15. The Walt Disney Company (NYSE:DIS)
Percentage Increase in Stake in Q4: 7%
The Walt Disney Company (NYSE:DIS) is a media and family entertainment company with a global reach. Nelson Peltz’s Trian Partners is a significant position holder in The Walt Disney Company (NYSE:DIS), with approximately 9.03 million shares.
Following a limitation period, JPMorgan analyst Philip Cusick initiated coverage of The Walt Disney Company (NYSE:DIS) on February 13 with an ‘Overweight’ rating and a price target of $135. The analyst informed investors in a research note that the business announced good fiscal Q1 earnings, led by improved Parks profitability and decreased direct-to-consumer losses. In addition, the business is driven by newly appointed CEO Bob Iger's transformation agenda.
Ken Fisher added The Walt Disney Company (NYSE:DIS) to his portfolio in Q4 2010 by buying 5,904 shares worth $221,000. Fisher Asset Management increased its hold in The Walt Disney Company (NYSE:DIS) by 7% in the fourth quarter, ending the period with 5.47 million shares of the company. The stock accounts for about 0.32% of the hedge fund’s portfolio, as Fisher Asset Management owns a $474.84 million stake in the company.
Just like Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), and General Motors Company (NYSE:GM), The Walt Disney Company (NYSE:DIS) is one of the new purchases/addition in Ken Fisher’s 13F investment portfolio.
Madison Funds made the following comment about The Walt Disney Company (NYSE:DIS) in its Q4 2022 investor letter:
“The Walt Disney Company (NYSE:DIS) reported a disappointing fourth quarter with revenue and earnings below consensus which was followed by the board replacing then-CEO Bob Chapek and the return of Bob Iger as CEO. Parks remained a bright spot while losses at direct-to-consumer increased and linear networks continued to be challenged by cord cutting.”
14. Target Corporation (NYSE:TGT)
Percentage Increase in Stake in Q4: 7%
Target Corporation (NYSE:TGT) is a general merchandise shop in the United States. Target Corporation (NYSE:TGT) shares have offered investors returns exceeding 7% in the past month as of February 18.
Target Corporation (NYSE:TGT) has a ‘Moderate Buy’ consensus recommendation based on 8 buy ratings, 8 hold ratings, and 0 sell ratings. Ray Dalio’s Bridgewater Associates is the company's largest stakeholder, with 923,244 shares worth $137.60 billion.
In the fourth quarter of 2010, Ken Fisher opened a new position in Target Corporation (NYSE:TGT). Fisher Asset Management loaded up on Target in the fourth quarter of 2022, increasing its hold on the company by 7%. The hedge fund owns 5.09 million shares of the company, worth $759.21 million.
Madison Funds made the following comment about Target Corporation (NYSE:TGT) in its Q4 2022 investor letter:
“Despite having already addressed excess inventories, Target Corporation (NYSE:TGT) reported a disappointing third quarter and further cut fourth quarter guidance. Although sales were slightly better than expected, Target saw a slowdown in discretionary sales. Gross margins were below expectations with higher markdowns, increased shrink, and incremental costs. Long-term, we expect Target to be able to return to operating margins in the 6% to 8% range as inventories return to normal levels as well as seeing a normalization in supply chain costs.”
13. Illinois Tool Works Inc. (NYSE:ITW)
Percentage Increase in Stake in Q4: 8%
Illinois Tool Works Inc. (NYSE:ITW) produces and distributes industrial items and equipment worldwide. The firm also enjoys a wide range of competitive advantages supporting long-term EPS growth and sustainable earnings. Among these are Illinois Tool Works Inc. (NYSE:ITW)’s enormous economies of scale, providing a price advantage and greater resources for investment in R&D and marketing compared to its rivals. It also has a sizable intellectual property portfolio, including over 17,000 issued and pending patents.
As per the 13F filings for the second quarter of 2015, Ken Fisher’s Fisher Asset Management added Illinois Tool Works Inc. (NYSE:ITW) to its portfolio by purchasing 2,230 shares. The investment fund also strengthened its position in Illinois Tool Works Inc. (NYSE:ITW) by buying 151,004 additional shares. This makes their stake in Illinois total 2.27 million shares worth $500.44 million.
Phill Gross and Robert Atchinson’s Adage Capital Management is a significant stakeholder of Illinois Tool Works Inc. (NYSE:ITW), with 431,799 shares worth $95.13 billion. On February 9, UBS analyst Steven Fisher maintained a ‘Neutral’ rating and increased his price objective on Illinois Tool Works Inc. (NYSE:ITW) to $245 from $213.
12. Capital One Financial Corporation (NYSE:COF)
Percentage Increase in Stake in Q4: 8%
Capital One Financial Corporation (NYSE:COF) provides a variety of business and retail banking, credit card, and other financial services. With over 100 million clients, Capital One Financial Corporation (NYSE:COF) is a major participant in the credit card industry. In the past, the corporation has targeted customers with less-than-ideal credit ratings with its offers. What is shockingly obscure, though, is that Capital One is one of the largest full-fledged banks in the country, in addition to being the principal lender behind its cards. It presently holds assets worth close to $400 billion and loans totaling more than $300 billion.
Securities filings for the third quarter of 2015 reveal that Ken Fisher added Capital One Financial Corporation (NYSE:COF) to his portfolio by acquiring 7,189 shares worth $521,000. In the fourth quarter of 2022, he increased his stake in Capital One Financial Corporation (NYSE:COF) by 8%, and his 0.58% stake in the company is now worth about $870.33 million.
Based on 6 buy ratings, 6 hold ratings, and 3 sell recommendations, Capital One Financial Corporation (NYSE:COF) has a consensus rating of ‘Hold.’ Capital One Financial Corporation (NYSE:COF)’s largest investor is Natixis Global Asset Management’s Harris Associates, which owns 12.60 million shares of the company.
Here is what Oakmark Funds has to say about Capital One Financial Corporation (NYSE:COF) in its Q4 2022 investor letter:
“Additionally, we initiated a position in Capital One Financial Corporation (NYSE:COF) during the quarter. Capital One is one of the largest issuers of Visa and Mastercard credit cards in the U.S. The company also has a banking network, offers auto and home loans, and manages assets for institutional and high-net-worth clients. We like that Capital One possesses a strong capital position and a common equity tier-1 ratio that exceeds both regulators’ requirements as well as the company’s own internal target. We appreciate the company’s good underwriting track record and its history of lower than expected loss rates given its business mix and yield. In our view, Capital One’s management team is focused on the long term as evidenced by its consistent reinvestment in technology development, and its online/branch bank provides a stable deposit base with decent funding cost. At roughly 5x 2022 consensus earnings and 1.1x tangible book value per share, the stock trades at a significant discount to the market and our estimate of intrinsic value.”]
11. Johnson Controls International plc (NYSE:JCI)
Percentage Increase in Stake in Q4: 9%
Johnson Controls International plc (NYSE:JCI) creates, produces, commissions, and retrofits building systems and products internationally and in the Americas, Europe, and Asia-Pacific. Johnson Controls International plc (NYSE:JCI)’s largest investor is Ken Griffin’s Citadel Investment Group which owns 5.72 million shares that are worth $366.07 billion.
Johnson Controls' price target was increased by Mizuho analyst Brett Linzey on January 13 from $72 to $78 while retaining a ‘Buy’ rating for the stock. The analyst forecasted that Q4 results should mostly be in line with expectations despite the presence of macro warning signs. She was optimistic about the short-term fundamentals for the industrial technology sector.
Fisher Asset Management holds more than 5.47 million shares in Johnson Controls International plc (NYSE:JCI) worth over $349.99 million in the fourth quarter of 2022. This represents 0.23% of their portfolio. Fisher’s stake in Johnson Controls International plc (NYSE:JCI) stock increased by 9% in the past few months, latest data reveals.
Here is what Aristotle Capital Management Value Equity said about Johnson Controls International plc (NYSE:JCI) in its Q1 2022 investor letter:
“As investors since the fourth quarter of 2017, we have enjoyed a front-row view of the large transformation that has taken place at Johnson Controls. Once a multi-industrial corporation, the company successfully turned itself into a pure-play buildings solutions and technology provider. Catalysts we previously identified for Johnson Controls included synergies following its merger with Tyco International, which provides fire safety and building security products, as well as benefits from its separation of non-building-focused businesses, such as automotive seating and batteries. With all catalysts in sight now nearing completion, and Johnson Controls now a better business for it – with higher recurring revenues and lower capital intensity – we decided to exit our investment to help fund the purchases of Xcel Energy and Atmos Energy.”
10. ServiceNow, Inc. (NYSE:NOW)
Percentage Increase in Stake in Q4: 9%
ServiceNow, Inc. (NYSE:NOW) offers cloud-based solutions for defining, structuring, administering, and automating enterprise services throughout North America, Europe, the Middle East, Africa, Asia Pacific, and other regions. SCGE Management, with 935,100 shares, is the biggest stakeholder in the company.
Ken Fisher's Fisher Asset Management bought 108,079 more shares of ServiceNow, Inc. (NYSE:NOW) in Q4. This amount represents a 9% increase over Fisher holdings in ServiceNow relative to the prior three-month period. According to the diversified holding company's 13F filings with the US Securities and Exchange Commission, Fisher Asset Management initially took a stake in ServiceNow, Inc. (NYSE:NOW) in the second quarter of 2014.
In the last quarter, the company had 1,637 total customers with more than $1 million in annual contract revenue. In addition, ServiceNow, Inc. (NYSE:NOW) reported subscription revenue of $1.86 billion, up 22% YoY.
RBC Capital analyst Matthew Hedberg boosted his price objective on ServiceNow, Inc. (NYSE:NOW) to $510 from $500 on January 26 and maintained an ‘Outperform’ rating on the shares following its Q4 earnings beat. The business produced great software outputs and suggestions in a difficult situation, the analyst claimed in a research report.
Polen Capital mentioned ServiceNow, Inc. (NYSE:NOW) in its Q4 2022 investor letter. Here is what the fund said:
“ServiceNow, Inc. (NYSE:NOW) is an $80 billion market cap business based in California. Its purpose is to make the world of work, work better for people. Getting a job done in an enterprise (what the company refers to as “workflow”) usually requires different people in various functions of an organization to work together. Often, they rely on different technology systems and inefficient manual processes to complete each step of the job before moving on to the next.
ServiceNow believes the most effective digital transformation initiative utilizes tools that can integrate workflows across siloed systems, departments, processes, and people. The company is solving what is arguably the biggest pain point in the biggest profit pool in the world (enterprises). Consider the explosion in data growth and all the software point solutions emerging constantly. ServiceNow wrangles all this into a fully integrated dashboard on a global scale with global customers in every industry. Nearly 100% of revenues are subscription based with a 99% renewal rate, and the company currently has no direct competition, according to our research. ServiceNow started with IT workflow, and today, ~40% of net new annual contract value is in non-IT workflows. Through constant innovation, the business has continued to expand its total addressable market, and we think it can grow free cash flow (FCF) at a 20%+ annualized rate for the next three to five years. At less than 30x FCF, we thought the valuation was attractive.”
9. Bank of America Corporation (NYSE:BAC)
Percentage Increase in Stake in Q4: 9%
Bank of America Corporation (NYSE:BAC) is a bank and financial holding corporation that provides banking and nonbank financial services. Bank of America has a 'Moderate Buy' consensus rating based on 7 buy recommendations, 5 hold ratings, and 2 sell ratings.
In Q4 of 2022, Fisher Asset Management ramped its stake in Bank of America Corporation (NYSE:BAC) stock by 9%. According to the company's 13F filings, the hedge fund has been a stakeholder in Bank of America since the fourth quarter of 2010. After its latest purchase, the hedge fund holds more than 22.13 million shares in the company worth over $732.92 million, representing 0.49% of its portfolio.
In 2022, Bank of America opened more than 1 million new checking accounts, saw $115 billion in net inflows to investment accounts, and increased digital sales by 22% year on year. Furthermore, the bank's net interest income increased by 29% yearly in the fourth quarter. Legendary investor and billionaire Warren Buffett's Berkshire Hathaway is the biggest stakeholder in Bank of America Corporation (NYSE:BAC), as of the end of the fourth quarter.
Here is what Ariel Investment said about Bank of America Corporation (NYSE:BAC) in a Q3 2022 investor letter,
“We initiated three new positions in the quarter. We added leading financial institution Bank of America Corporation (NYSE:BAC) which serves individual consumers, small and middle-market businesses, and large corporations with a full range of banking, investing, asset management, and other financial and risk management products and services. The current company was formed through various mergers including NationsBank, FleetBoston, US Trust, Countrywide Financial, and Merrill Lynch with the legacy commercial bank to form a national banking powerhouse and bulge bracket investment firm. As one of the ‘Big Four’ U.S. banks it enjoys scale driven cost advantages and economies of scale which provide meaningful competitive advantages and potential for strong returns in the largely commoditized banking industry. A survivor of the financial crisis, BAC has emerged with a solid capital base and stands to benefit from a rising interest rate environment.”
8. Salesforce, Inc. (NYSE:CRM)
Percentage Increase in Stake in Q4: 10%
Salesforce, Inc. (NYSE:CRM) is the world's largest provider of CRM software and one of the stocks in which Fisher Asset Management has increased its holdings. The hedge fund upped its position by 10% or 1.15 million shares. Fisher Asset Management's total holdings were worth $1.84 billion as of December 31.
Over the past month, shares of Salesforce, Inc. (NYSE:CRM) have returned 10.09%, compared to the S&P 500 composite's 1.68% change. With 8.15 million shares, Harris Associates is the biggest stakeholder in Salesforce, Inc. (NYSE:CRM).
On February 15, Barclays analyst Raimo Lenschow boosted his price objective on Salesforce, Inc. (NYSE:CRM) from $180 to $195 while maintaining an ‘Overweight’ rating on the stock. According to the analyst, finding interesting stories in software for Q4 earnings would be challenging.
Here is what Aristotle Atlantic Partners, LLC said about Salesforce, Inc. (NYSE:CRM) in its Q3 2022 investor letter:
“We sold Salesforce, Inc. (NYSE:CRM) to reduce our weighting in the Information Technology sector. Salesforce held their investor day, and the company reiterated their organic Fiscal Year 2026 revenue target of $50 billion. This target remains more back-end loaded based on current slowing macroeconomic conditions and requires new annual contract growth well ahead of what the company has been averaging for the past few years. We are skeptical that the company will be able to achieve this revenue target organically and see Merger & Acquisitions (M&A) being key to achieving the growth. While we believe Salesforce has shown good success in growing its non-CRM clouds, we do see more competitive pressures emerging for the Marketing and Customer Service Clouds, specifically on the pricing side during a global economic slowdown.”
7. Unilever PLC (NYSE:UL)
Percentage Increase in Stake in Q4: 11%
Unilever PLC (NYSE:UL) is a significant household and personal care product manufacturer. Unilever PLC (NYSE:UL) shares are up 1.23% year to date. Unilever has a consensus recommendation of 'Moderate Buy,' based on 1 buy, 0 hold, and 0 sell ratings.
In 2022, the company's underlying revenues increased by 9%. Fisher Asset Management elevated its position in Unilever PLC (NYSE:UL) by 11% in Q4 2022, holding more than 7.73 million shares worth over $389.06 million. The stock accounts for 0.26% of the fund’s total 13F portfolio.
As of December 31, 2022, Gardner Russo & Gardner was the lead stakeholder in Unilever PLC (NYSE:UL). The fund owns more than 5.46 million shares of stock, which are worth $275.06 billion.
Here is what Fundsmith said about Unilever PLC (NYSE:UL) in its 2022 yearly investor letter:
“Last year I wrote about Unilever PLC (NYSE:UL) and attracted a virtual tsunami of comment for my remarks about Unilever, purpose and Hellmann’s mayonnaise. Events soon overtook this commentary insofar as Nelson Peltz’s Trian Partners announced that it had bought a stake in Unilever and he was invited to join the board. We are asked to suspend disbelief that this was in no way linked to the subsequent announcement that Alan Jope will be leaving the CEO role. This explanation sounds like it was lifted from the script of Miracle on 34th Street.…” (Click here to read the full text)
6. Lam Research Corporation (NASDAQ:LRCX)
Percentage Increase in Stake in Q4: 17%
Lam Research Corporation (NASDAQ:LRCX) provides advanced semiconductor wafer manufacturing equipment and services globally. Alkeon Capital Management is the company’s largest shareholder, with shares worth $253.54 billion.
Atif Malik, a Citi analyst, maintained a ‘Buy’ rating and a $560 price target on the shares of Lam Research Corporation (NASDAQ:LRCX) on January 31. He also launched a 90-day "positive catalyst watch." After relative underperformance over the previous six months due to poor memory end demand and worries about capital cuts, Citi anticipated the stock to outperform the group.
Securities filings reveal that Fisher Asset Management increased its stake in Lam Research Corporation (NASDAQ:LRCX) by 17% during the fourth quarter of 2022. The fund presently owns more than 2.64 million shares of Lam Research Corporation (NASDAQ:LRCX) worth over $1.11 billion, representing 0.75% of the portfolio.
Like Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG), and General Motors Company (NYSE:GM), Lam Research Corporation (NASDAQ:LRCX) is one of the new purchases/addition in Ken Fisher’s 13F investment portfolio.
Vulcan Value Partners shared its outlook on Lam Research Corporation (NASDAQ:LRCX) in its Q1 2022 investor letter. Here’s what the firm said:
“Lam Research Corp. designs and manufactures equipment used in the fabrication of semiconductors. Recent supply chain issues have negatively impacted the industry and has resulted in chip shortages. The industry is performing well, exceeding our expectations, and Lam Research’s fundamentals remain strong. The long-term secular drivers of demand and growth in the industry continue to be very powerful. Lam Research is experiencing increasing returns on capital, higher margins, and more stable results.”
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Disclosure: None. Ken Fisher's 15 New Purchases/Additions is originally published on Insider Monkey.