ready? Hedge funds have now revealed their transactions for the first quarter of
2019. Thanks to 13F forms filed with the SEC we now know which stocks hedge
funds are buying and selling. Such transactions provide a valuable glimpse into
the latest ‘Smart Money’ flows.
One fund manager in particular stands out from the crowd. Billionaire Warren Buffett– otherwise known as the Oracle of Omaha- is the chairman and CEO of the massive Berkshire Hathaway fund. The fund’s last reported 13F filing for Q1 2019 includes $199,483,708,000 in managed 13F securities.
trades always generate intense speculation, and this quarter is no different.
Bear in mind the fund only reports transactions 45 days after the end of the
last quarter, so it is possible that shares have been bought or sold since the
last filing date.
further ado, let’s turn to TipRanks to
discover 3 stocks Warren Buffett is buying now:
Welcome to this quarter’s big winner. Buffett has at last initiated a position in Amazon with 483,300 shares worth about $860.6 million. This means Amazon still has a way to go before it becomes one of the fund’s major players. Although Buffett disclosed the new investment earlier this month, only now can we see the size of this stake.
But be aware: Buffett himself was not responsible for this particular investing decision. “One of the fellows in the office that manage money … bought some Amazon, so it will show up in the 13F,” Buffett told CNBC on May 2. “Yeah, I’ve been a fan, and I’ve been an idiot for not buying” Amazon shares, Buffett said. “But I want you to know it’s no personality changes taking place.”
hedge fund guru has long been vocal about his appreciation for both Amazon and CEO
Jeff Bezos- now the world’s richest person. “I made the wrong decisions on
Google and Amazon,” Buffett told shareholders back at the annual Berkshire
Hathaway in 2018. “We’ve looked at it. I made the mistake in not being able to
come to a conclusion where I really felt that at the present prices that the
prospects were far better than the prices indicated.”
Of Amazon CEO Jeff Bezos, the 88-year-old billionaire revealed: “I had a very very very high opinion of Jeff’s ability when I first him, and I underestimated him… I’ve watched Amazon from the start. I think what Jeff Bezos has done is something close to a miracle … The problem is when I think something will be a miracle, I tend not to bet on it. It would have been far better obviously if I had some insights into certain businesses.”
Amazon: Word on the Street
In fact, Amazon is one of the Street’s most popular stocks right now. We can see from TipRanks that 34 out of 34 analysts rate the stock a ‘Buy’. These analysts still see AMZN as a compelling investment opportunity with 19% upside potential. Plus Amazon has a Smart Score of 10/10- thanks to its support from multiple datapoints including positive technicals, fundamentals, and news sentiment.
Five-star Monness analyst Brian White is even more bullish than consensus. He has just reiterated his price target of $2,300 (23% upside) following strong 1Q:19 results with significant profit upside. “Amazon has forged ahead with new initiatives and innovations… We believe the company’s growth path is very attractive across the e-commerce segment, AWS, digital media, advertising, Alexa and more” explains White.
JP Morgan (JPM)
up the fund’s holding in JP Morgan by 18% to 59.5 million shares worth just
over $6 billion. Given that this position was only initiated in 3Q18, it has
quickly become one of the fund’s larger holdings. Like with Amazon, Buffett is
clearly a believer in JPM’s management team.
said he reads CEO Jamie Dimon’s annual shareholder letter for insights into the
banking industry. And he also partnered with both Dimon and Bezos last year on
a not-for-profit health venture for employees called Haven. Meanwhile one of Buffett’s
senior investing lieutenants, Todd Combs, sits on JP Morgan’s board of
cautiously optimistic on JP Morgan’s prospects. The stock holds a Moderate Buy consensus,
while the average analyst price target stands at $122 (11% upside potential).
“We view JPM as a high-quality core holding in the group. At ~10x our 2020 EPS estimate and ~1.9x TBV, we believe the shares are reasonably priced, but not quite the bargain they were even in the fairly recent past. At this juncture, we think BAC and C are more timely, but JPM is a well-managed company that should create value over time” explains top-rated Oppenheimer analyst Chris Kotowski. He currently has a Hold rating on the stock.
Interestingly, however, JPM still scores a ‘perfect’ Smart Score of 10. That’s thanks to a bullish outlook from hedge fund managers, corporate insiders, and even financial bloggers.
RedHat is a leading provider of enterprise open source solutions, including
high-performing Linux, cloud, container, and Kubernetes technologies. Buffett
significantly increased the fund’s RHT holding in Q1 by 22% to 5.1 million
shares worth $9.34 million.
Monnness analyst Brian White has just attended the RedHat summit. At the event IBM CEO Ginni Rometty reaffirmed that Red Hat will remain an independent company after IBM completes its $34 billion acquisition. The deal has just received approval from the US Department of Justice, and is now waiting for EU approval.
“Growing revenue by 17% per annum over the past five years and showing new engines of growth in the ADOET business, we believe investors will continue to pay a premium for the company’s subscription model and the strong secular trends supporting the open source software movement” cheers White. He reiterated his buy rating on RHT with a $190 price target on May 9 (this is also the price paid by IBM per share- a 63% premium on RHT shares back in October when the deal was announced).
Note that RedHat boasts a Smart Score of 9, placing it firmly in the Outperform category. See what other financial experts say about RedHat here.
And it’s goodbye to: Verizon (VZ)
In the quarter the fund exited Verizon completely – the only stock to be sold off. Verizon is only guiding for a low single-digit percentage growth in 2019 and recently reported lackluster earnings results.
Meanwhile the fund slashed holdings of the following stocks:
- Halving its position in multinational energy company Phillips 66 (PSX) to just 5.5 million shares valued at $528 million.
- Reducing the Charter Communications (CHTR) holding by 18%. The remaining holding is now worth approx. $1.9 billion.
- Trimming low-cost US airline Southwest Airlines (LUV) by 2% to 53.6 million shares worth $2.8 billion.
- Selling almost 17 million shares in Wells Fargo (WFC). However, WFC remains the fund’s third biggest holding with a value of $19.8 billion. Year-to-date, WFC has stayed flat- and over the last three years the stock has lost 6%. Nonetheless Buffett only paid an estimated average price for the shares of $30/ stock, and the financial giant is now trading considerably higher at $46/share.
Find fresh investing inspiration
Here we have looked at Warren Buffett’s latest stock picks. But TipRanks covers more than just hedge funds. It tracks and ranks thousands of insiders, bloggers and analysts. The Analysts’ Top Stocks tool reveals which ‘Strong Buy’ stocks analysts have a very bullish consensus on right now. Go to the Analysts’ Top Stocks Tool now.
Source: TipRanks Blog