In this piece, we will take a look at the top 12 stocks to buy in 10 different sectors for the next 3 months. If you want to skip our introduction to how spreading a portfolio across several sectors might help long term performance according to financial literature, then you can take a look at the Top 5 Stocks To Buy In 10 Different Sectors for the Next 3 Months.
The spread of technology and the broad use of the Internet by people belonging to all walks of life has significantly increased the exposure that people have to information. This is true for politics, sports, and finance - as both those who work in these industries and others whose well being is tied to their performance are able to stay abreast with the latest developments. Social media stocks such as Meta Platforms, Inc. (NASDAQ:META), and private companies like Elon Musk's well known X (formerly called Twitter) enable a connected world and a much well informed global populace.
For instance, if you're interested to learn from those who spend the better part of their day dabbling in all things finance, then you can always consult Twitter. Diverse viewpoints are important when it comes to risking money on stocks, and another common way of hedging an investment portfolio's risk is through diversification as well. In finance theory, diversification reduces the variance that a broader portfolio's returns might face. In other words, it reduces the wild downswings that might significantly reduce principal value in case of an untoward event in one industry, providing investors with peace of mind and better chances of optimal cardiovascular performance.
Additionally, the sheer plethora of information available to investors through the Internet and traditional media also allows them to rapidly tailor and trim their investments in response to news. For instance, it takes mere seconds for all major stock indexes such as the NASDAQ, the S&P 500, and the NYSE to fall when the Federal Reserve surprises investors by beefing up interest rates, or rise when macroeconomic and political stability is assured. When it comes to investing in stocks that belong to different sectors, a well-informed investor is easily able to keep up to date with the performance of sectors that are completely different from each other such as high technology biotechnology stocks and good old oil crude oil exploration and production stocks.
Even if we were to ignore complex mathematical complications of standard deviation and other variables that professionals rely on when investing in stocks in different sectors, doing so also seems to make sense on an intuitive scale. For instance, let's consider two different sectors and recent stock market events to see how this might work. After Russia invaded Ukraine in 2022 and the Federal Reserve started to increase interest rates in response to record inflation levels, the bifurcation of the stock market into different sectors became clear. We've briefly mentioned one of these, i.e., oil and energy, above, and the second sector is technology. After the Russian invasion and the official settling in of the Federal Reserve's latest interest rate hiking cycle, oil stocks soared as investors correctly realized that they would benefit from a shakeup in the global oil industry.
At the same time, tight macroeconomic conditions created by high interest rates and high inflation meant that big ticket technology and high growth stocks such as Meta Platforms, Inc. (NASDAQ:META) and Tesla Inc. (NASDAQ:TSLA) posted double or even triple digit percentage losses on the stock market. For the investor who was prudent enough to have invested in different sectors at the start of 2022, the juicy returns and dividends offered by oil stocks would have helped ease or even reverse the pain that technology stocks experienced in 2022.
With these details in mind, let's take a look at some top stocks in different sectors. The notable picks are Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and Meta Platforms, Inc. (NASDAQ:META).
To make our list of the stocks to buy in different sectors, we scanned Insider Monkey's database of 910 hedge fund portfolios and picked out stocks from Technology, Materials, Real Estate, Financial Services, Healthcare, Industrial, Communications, Consumer Cyclical, Consumer Defensive, Utilities, and Energy sectors with the highest hedge fund shareholders as of Q3 2023. Out of these, the stocks with the highest number of hedge fund investors were chosen.
For these best stocks from ten different sectors, we used hedge fund sentiment. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
Top 12 Stocks To Buy In 10 Different Sectors for the Next 3 Months
12. American Tower Corporation (NYSE:AMT)
Number of Q3 2023 Hedge Fund Shareholders: 60
Sector: Real Estate
American Tower Corporation (NYSE:AMT) is the real estate stock with the highest number of hedge fund investors in our database. Perhaps this is unsurprising since it caters exclusively to the needs of the technology industry. American Tower Corporation (NYSE:AMT)'s shares are rated Buy on average and the average share price target is $229.59.
During last year's third quarter, 60 out of the 910 hedge funds covered by Insider Monkey's research had held a stake in American Tower Corporation (NYSE:AMT). Charles Akre's Akre Capital Management was the firm's largest hedge fund shareholder due to its $1.1 billion investment.
Just like Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Meta Platforms, Inc. (NASDAQ:META), American Tower Corporation (NYSE:AMT) is another top stock in different sectors.
11. Teck Resources Limited (NYSE:TECK)
Number of Q3 2023 Hedge Fund Shareholders: 75
Sector: Basic Materials
Teck Resources Limited (NYSE:TECK) is a mining company that produces coal, metals, and other products. Amidst a slowdown in the global economy particularly due to China's troubles, the firm has struggled on the financial front as of late since it has missed analyst EPS estimates in all four of its latest quarters.
After digging through 910 hedge fund portfolios for their Q3 2023 shareholdings, Insider Monkey discovered that 75 had held a stake in the firm. Teck Resources Limited (NYSE:TECK)'s biggest stakeholder in our database is Eric W. Mandelblatt's Soroban Capital Partners as it owns $433 million worth of shares.
10. T-Mobile US, Inc. (NASDAQ:TMUS)
Number of Q3 2023 Hedge Fund Shareholders: 79
Sector: Communication Services
T-Mobile US, Inc. (NASDAQ:TMUS) is an American telecommunications carrier headquartered in Bellevue, Washington. 2024 can shape up to be an important year for the firm, as it is targeting for more customer growth by partnering up with SpaceX to offer satellite phone services.
As of September 2023 end, 79 out of the 910 hedge funds covered by Insider Monkey's research had bought and owned T-Mobile US, Inc. (NASDAQ:TMUS)'s shares. Warren Buffett's Berkshire Hathaway owned the largest stake which was worth $734 million.
9. Exxon Mobil Corporation (NYSE:XOM)
Number of Q3 2023 Hedge Fund Shareholders: 79
Exxon Mobil Corporation (NYSE:XOM) is the biggest non public oil exploration and production firm in the world. February 2024 is shaping up to be an important month for the firm as not only is it exiting from Equatorial Guinea after three decades, but Exxon Mobil Corporation (NYSE:XOM) is also increasing its focus on commodities trading by growing its presence in London.
For their third quarter of 2023 shareholdings, 79 out of the 910 hedge funds tracked by Insider Monkey were the firm's investors. Exxon Mobil Corporation (NYSE:XOM)'s biggest stakeholder among these is Jean-Marie Eveillard's First Eagle Investment Management as it owns 13.1 million shares that are worth $1.5 billion.
8. Kenvue Inc. (NYSE:KVUE)
Number of Q3 2023 Hedge Fund Shareholders: 85
Sector: Consumer Defensive
Kenvue Inc. (NYSE:KVUE) sells over the counter healthcare, beauty, and other associated products. A freshly listed stock, the firm was out with some good news for investors in February 2024 when it declared a 20 cent dividend for the first quarter.
Insider Monkey scoured through 910 hedge fund portfolios for their September quarter of 2023 shareholdings and found that 85 had bought a stake in Kenvue Inc. (NYSE:KVUE).
7. Union Pacific Corporation (NYSE:UNP)
Number of Q3 2023 Hedge Fund Shareholders: 90
Union Pacific Corporation (NYSE:UNP) is one of the oldest companies on our list since it was set up in 1862. A railroad company with a presence all over the U.S., the shares are rated Buy on average and the average analyst share price target is $256.44.
By the end of 2023's third quarter, 90 out of the 910 hedge funds covered by Insider Monkey's research had invested in the company. Eric W. Mandelblatt's Soroban Capital Partners owned the largest Union Pacific Corporation (NYSE:UNP) stake which was worth $1.6 billion.
6. Thermo Fisher Scientific Inc. (NYSE:TMO)
Number of Q3 2023 Hedge Fund Shareholders: 109
Thermo Fisher Scientific Inc. (NYSE:TMO) is a diversified medical equipment company that sells devices used in research, drug development, diagnostics, and other areas. The firm was out with some sobering news for investors in January 2024 when its full year revenue and profit guidance fell below analyst estimates, based on part on weaker prospects for a Chinese recovery.
As of September 2023 end, 109 out of the 910 hedge funds tracked by Insider Monkey had held a stake in Thermo Fisher Scientific Inc. (NYSE:TMO). Chris Hohn's TCI Fund Management was the largest shareholder due to its $1.6 billion investment.
Amazon.com, Inc. (NASDAQ:AMZN), Thermo Fisher Scientific Inc. (NYSE:TMO), Microsoft Corporation (NASDAQ:MSFT), and Meta Platforms, Inc. (NASDAQ:META) are some top hedge fund stock picks in every sector.
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Disclosure: None. Top 12 Stocks To Buy In 10 Different Sectors for the Next 3 Months is originally published on Insider Monkey.