The 25 Best Blue-Chip Stocks to Buy Now (According to Hedge Funds)
It's a good idea to keep one eye on the "smart money." Sure, hedge funds' performance doesn't always live up to the hype, but considering they represent more than $3 trillion in assets under management and have built a reputation of having stock-market savvy, it's good to know what they're putting their capital toward.
Helpfully, the folks at WalletHub keep tabs on the stocks that hedge fund managers are buying, selling and holding every quarter. Combing through regulatory filings, WalletHub looks at the positions of more than 400 hedge funds, tallies their positions in individual stocks, then ranks the stocks by their total holdings value.
Spoiler alert: Every one of these companies is massive by market value. Indeed, they would have to be to accommodate so much institutional interest. It also is no surprise that these stock picks are all household names.
Here are the 25 best blue-chip stocks to buy now, based on how popular they are with hedge funds. Given these companies' blue-chip status and strong track records, it's easy to see why they're the ones the "smart money" loves the most.
Berkshire Hathaway
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Market value: $501.0 billion
Dividend yield: N/A
Analysts' opinion: 3 strong buy, 1 buy, 4 hold, 0 sell, 0 strong sell
A bet on Berkshire Hathaway (BRK.B, $202.50) isn't just a bet on chairman and CEO Warren Buffett, the greatest value investor of all time, it's a diversified wager on the broader economy.
Berkshire owns scores of companies outright, from Geico insurance to industrial powerhouse Precision Castparts to the BNSF Railway. It also holds sizeable stakes in everything from Costco (COST) to Sirius XM Holdings (SIRI) to Delta Air Lines (DAL) ... and several of the stocks on this list.
The Oracle of Omaha's record speaks for itself. Under the direction of Buffett and partner Charlie Munger, Berkshire Hathaway created almost $356 billion in wealth from 1976 to 2016, good for an annualized return of 22.6%. Berkshire Hathaway also is the best-performing stock in the Standard & Poor's 500-stock index over the past 50 years.
Pfizer
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Market value: $231.7 billion
Dividend yield: 3.5%
Analysts' opinion: 5 strong buy, 2 buy, 7 hold, 0 sell, 0 strong sell
As the largest pure-play pharmaceutical company in the U.S., $41.73) is a natural holding for institutional investors seeking a balance of income and growth.
