5 Stocks the Smart Money is Buying for 2024.

so as you guys know I love tracking the 13f filings of the world's super investors to see what they're buying and selling from quarter to quarter but I follow this website called Data Roa which actually compiles a list of 80 famous investors and each quarter they show lists of the most bought stocks overall and also the most held stocks so in this video let's look at the five most bought stocks from the super investors heading into 2024 and whether there's anything we can take away from the list for our own investing also just quickly a reminder as always that by mentioning the stocks in this video I'm in no way implying a buy hold or sell recommendation this video should be taken as information and entertainment only and remember all advice is General in nature and it might not be right for you so with that said coming in as our fifth most bought stock leading into 2024 we have Visa Visa was bought by seven super investors in Q4 and congratulations to them as the stock is already up around 8% to start the year Visa is actually a fairly common stock that features on these list of super invest to buyers is quite frankly it has a very big competitive advantage in its Network effect it has a product that is scalable across the entire Earth's population and it's basically formed an oligopoly with MasterCard and American Express that makes it a very handsomely profitable company which only needs to charge a very small fee per transaction to make a hell of a lot of money in fact in their 2023 annual report Visa noted they processed 22.6 billion payments on their networks with a total value of 12.3 trillion but here's the thing they only need to charge a very very very small fee to the card holders the merchants and the banks to make a lot of money off 12.3 trillion of volume and that's exactly what happens in 2023 they managed to profit $17.2 billion up 15% from the year before and this is very much one of those companies that has such a comfortable competitive position that the numbers more or less do just Trend up consistently over time it's honestly what long-term investors love to see so I'm not surprised to see it feature on our list then coming in at number four we have Charter Communications Charter Communications which operates under the brand name spectrum is of course an American telecommunications and mass media company that offers Cable Television Internet phone and mobile services but interestingly the stock is currently sitting at its lowest level since 2019 now I do have to preface this by saying that Charter is not personally a business I follow but it seems as though there are three main factors behind their decline the first is slowing growth revenue is growing very slowly in fact they've grown Revenue by 31% total in 6 years and net income is much the same growing from 3.5 billion in 2017 to 4.5 billion now the second closely related factor is mediocre subscriber performance their residential business is by far the most important to them and while they have been posting decent mobile additions broadly customer count is flat Revenue per customer is flat and with more spending to upgrade their Network the free cash flow is also declining then lastly debt the company does have a high debt load around $98 billion which is scaring off investors in a higher interest rate environment especially when they continue to do things like share repurchases with the money the one thing I reckon the super investors may see in Charter however is simply the value it does have a PE of around 10 right now so maybe some super investors see value if the company can upgrade its Network and drive more subscribers although some are arguing that even the current multiple is too high given its recent growth but then moving on coming in at number three we have Amazon so Amazon was bought by seven super investors in Q4 of 2023 which honestly did surprise me is the stock Rose about 80% in 2023 and it's currently sporting a PE ratio of around 60 the only thing I can maybe subscribe to is the idea that the super investors were potentially taking advantage of this dip in October where the stock fell down to $120 per share but even still it seems pretty expensive and Amazon is an interesting story because it really is the tale of two strategies throughout the 2010s it was very much growth for growth sake under bezos's rule and they did grow and the stock exploded but that also caused them some troubles for example during the pandemic the company's warehouses were overstaffed operating expenses with skyrocketing and ultimately Amazon needed a change in strategy and a key factor in the stocks renewed success has been Andy chassis's focus on higher profitability which mainly comes from greater focus on their services business over their products business in fact in 2022 Amazon recorded more full year service Revenue than product revenue for the first time and that's naturally been improving margins in Q3 last year Amazon reported an operating margin of 7.8% the highest since it peaked in the first quarter of 2021 but then they maintain that profitability in Q4 and it's having an impact the company has gone from a cash burning machine to a cash generating machine producing $ 36.8 billion in free cash flow in Q4 a start contrast to the netive 11.5 billion in Q4 of 2022 so there are definitely things to be excited about for Amazon shareholders but time will tell if buying at the current price pays off okay moving on into second place we have Microsoft Microsoft like the rest of the Magnificent 7 Rose dramatically in 2023 up 57% as of the time of recording their meteoric rise over the last 12 months has given the stock a monster market cap of over $3 trillion and now sits Standalone as the S&P 500's most valuable company this stock was also bought by eight super investors in Q4 but interestingly on this list none of the stocks this quarter will actually stand out buers like what we've seen in Prior quarters for example in my last Super investor portfolio update which was q1 of 2023 the number two spot was held by Amazon but at the time there were 13 super investors buying in and in fact had Microsoft only been bought by eight of these super investors back then it would only just scrape in at number five and I'll talk a little bit more about this in a second but generally what we saw this quarter is much less buying than usual from the super investors so I'd encourage you to definitely take that into account as well but yes Microsoft comes in at number two it's a big Behemoth you can argue it's now overvalued after being swept up in the AI stock market Mania of 2023 but many super investors such as Steve Eisman asworth to motorin are also making the point that Microsoft are the closest out of the ific 7 to actually realizing significant revenues from their work in AI they've already integrated the functionality of chat GPT into their search platform Bing they've added the co-pilot key to Windows keyboards in the first layout change since the addition of the start key in 1994 they've integrated AI into Aur cloud and Office 365 and of course they've already positioned themselves very well as a major investor in open AI with close ties to the management team and a seat on the board now yes Microsoft's efforts in AI I are still very much in their infancy and it's true the success of the next few years will come down more to their sales from Office 365 their cloud services windows and devices like the Surface Pro and the Xboxes but with most of these super investors being notoriously long-term Focus I wouldn't be surprised if eight of them are simply making a long-term bet on Microsoft's future in Ai and with that said we finally come to the number one spot and that is Google Google a shares were bought by eight super investors in Q4 including Michael bar himself so be sure to check out that video if you missed it and also the C-Class shares were bought by three of our super investors similarly to Microsoft Google had an absolutely explosive 2023 up 58% and at the time of recording they have a market cap of $1.78 trillion and ignoring the speculative hype behind AI it isn't actually that surprising to see Google consistently at the top of this list a they saw operating profit from their advertising business rise 19% in 2023 B they Google Cloud business now generates profit instead of being a money pit generating $1.7 billion in profit for them in 2023 and see they have one of the most reassuring balance sheets you'll find Worldwide they have $11 billion in cash or short-term marketable Securities long-term debt of just 13 billion a current ratio that is current assets divided by current liabilities of 2.09 and total assets at about 3.4 times total liabilities so this is extremely reass in for investors and in all honesty it's a big factor as to why the stock commands such a premium pretty much all the time but would the super investors a bunch of long-term value-minded investors really agree to pay that much of a premium just to own these highquality companies like Amazon or Microsoft or Google well this is where I just wanted to take you back to the tables from data Roma because there is something that we should consider particularly this quarter I said earlier that there are a lot fewer super investors buying this quarter than what we usually see for example Google was bought by just 11 super investors this time around versus 23 in my last video from q1 but we also need to consider how many super investors are selling and when we do the story of the video kind of changes a bit while seven super investors bought Visa 11 of them reduced while seven super investors bought Amazon 12 of them reduced while eight super investors bought Microsoft 21 investors reduced and while 11 super investors bought Google 34 of them reduced so while this series is titled what the super investors are buying this quarter probably would have been more accurate to call it what the super investors are selling and let's be real it's not really that surprising to see them on balance selling stocks like Microsoft or Google or Amazon considering Microsoft's 2023 return was 57% Google's was 58% and Amazon's was 80% these investors are very rational super switched on people and it's not surprising to see them sell down after a period of stock market Mania I mean looking at their PE ratios right now it shows you that it appears these stocks on a quick glance seem pretty much priced to Perfection or even a little bit overpriced I mean Google sits at a PE of around 26 but then Microsoft is priced even higher at 36 and Amazon's very high at a PE of 58 and when you're looking at these super investors portfolios individually you can really see the trend you know Buffett did pretty much nothing in Q4 leelou did nothing Bill Amman was mostly selling guy spear did nothing Seth claran mostly reduced heck monish prri barely owns any US stocks at all right now so we have to be careful when just looking at the buyers because as is the case here doesn't really give us the full picture of what's going on so with that said I want to finish the video by going through not the five most bought or most sold Stocks by our super investors but maybe just the five most held stocks because I have a hunch that in 2024 we won't see them buying a whole lot of companies the long-term minded super investors are probably just going to sit back and hold their long-term Compounders so what are the most held stocks well at number five we have Visa at number four we have Amazon then number three is meta number two is Microsoft and number one is Google and what do you notice about these companies they are all businesses with really big competitive advantages and that really highlights the strategy these investors subscribe to find the great businesses that have the Competitive Edge wait until you presented fantastic opportunities to buy them and then just hold them through everything else and let them compound over a very long period of time and that's what the data is showing is going on right now but with that said guys hope you enjoyed the video please leave a like and also I'm excited to share that you can now check out a 100% free course over on new money education that details the exact process of the long-term buffer style value investing strategy we talk through the four key pillars of the value investing approach so if you haven't checked out new money education just yet please come over and do so as I said it is completely free to start and I'd really appreciate it links are in the description down below with that said I'll see you guys in the next one

Channel: New Money

Views: 229,100

Keywords: stock market, stocks to buy, stocks to buy now, warren buffett, investing for beginners, value investing, top stocks, best stocks to buy now, best stocks to buy, michael burry, top stocks to buy now, which stocks to buy, charlie munger, top stock picks, ray dalio, dividend investing, what stocks to buy, warren buffett portfolio, best growth stocks, best stocks to buy 2024, long term investing, stocks to buy 2024

Id: sl1IoOA2gw8

Length: 12min 12sec (732 seconds)

Published: Fri Feb 23 2024