In this article, we will be taking a look at the 14 best American stocks to buy heading into 2024. To skip our detailed analysis of current US market news, you can go directly to see the 5 Best American Stocks To Buy Heading into 2024.
Will There Be Another Rate Hike?
US markets have had a turbulent year so far, to say the least. With economic pressures, strikes, banking failures, and geopolitical tensions on the rise, it is unsurprising that most investors are feeling apprehensive about the state of the markets and their investments within them. As the year draws to a close, many investors are also on the lookout for further rate hikes by the Federal Reserve and what they may spell out for the economy and the markets.
On October 23, Meera Pandit, the global market strategist at JPMorgan Asset Management, joined CNBC’s “Squawk Box” to discuss the issue of rate hikes. Here are some of his comments on the matter:
“Let’s not take another rate hike off the table. I know that people came out of last week thinking that Powell was very dovish, but I actually heard a very balanced view of ‘we’re in restrictive territory, but further rate hikes might be necessary, but there’s further tightening.”
When asked whether she thinks there will be another rate hike this year, Pandit responded that we might potentially see one in December. Considering the above, US investors, in particular, may be wondering about what are the best American stocks to buy heading into 2024.
What To Invest In During These Times?
It can be safe to say that some financial professionals and investors are expecting one last rate hike from the Fed before the year draws to a close. For those who have been following the US markets diligently throughout the year, it will be clear that US tech stocks are currently some of the best American stocks to buy, especially considering their performance so far. On October 23, Barton Crockett, a senior analyst at Rosenblatt Securities, joined CNBC’s “Squawk Box” to discuss big tech earnings and potential stocks to pick up before the numbers are released. He discussed some of the stocks he believes are names you would want to own at this moment:
“Companies in this camp, I think, include Pinterest, also I think, Amazon is well-positioned for revenue trajectory margin expansion, along with Meta and Alphabet. Those would be the four companies that I’d be looking to accumulate ahead of this.”
While tech stocks like the ones named above, and others like Apple Inc. (NASDAQ:AAPL), are understandably popular picks for investors heading into the end of this year, other major American stocks like Berkshire Hathaway Inc. (NYSE:BRK-B) and UnitedHealth Group Incorporated (NYSE:UNH) may also be valuable options in other sectors. Since there is a variety of companies one can benefit from in the long run in the American markets, we have compiled a list of the top American stocks to buy heading into 2024. These may very well be stocks that will make you rich in 2024 if you invest smartly.
Our Methodology
We used Insider Monkey’s hedge fund data for the second quarter to pick the best 14 American stocks to buy heading into 2024 based on the number of hedge funds holding stakes in them. They are ranked based on this metric, from the lowest to the highest number.
Best American Stocks To Buy Heading into 2024
14. Berkshire Hathaway Inc. (NYSE:BRK-B)
Number of Hedge Fund Holders: 109
Berkshire Hathaway Inc. (NYSE:BRK-B) is a financial company based in Omaha, Nebraska. It is engaged in the insurance, freight rail transportation, and utility businesses across the world and is among the best American stocks to buy at the moment.
A Buy rating was maintained on shares of Berkshire Hathaway Inc. (NYSE:BRK-B) on August 7 by Brian Meredith, an analyst at UBS. The analyst also raised his price target on the stock from $405 to $414.
There were 109 hedge funds long Berkshire Hathaway Inc. (NYSE:BRK-B) in the second quarter. Their total stake value was $15.5 billion.
13.UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 111
As of October 16, Ben Hendrix, an analyst at RBC Capital, maintains an Outperform rating on shares of UnitedHealth Group Incorporated (NYSE:UNH). The analyst also raised his price target on the stock from $572 to $596.
UnitedHealth Group Incorporated (NYSE:UNH) is a managed healthcare company. It operates through its UnitedHealthcare, Optum Health, Optum Insight, and Optum Rx segments. The company is based in Minnetonka, Minnesota.
A total of 111 hedge funds were long UnitedHealth Group Incorporated (NYSE:UNH) in the second quarter, with a total stake value of $10.1 billion.
Baron Funds made the following comments about UnitedHealth Group Incorporated (NYSE:UNH) in its third-quarter 2023 investor letter:
“UnitedHealth Group Incorporated (NYSE:UNH) is a diversified health and well-being company with $200 billion in revenue that operates across four segments, United Healthcare, Optum Health, OptumInsight, and OptumRX, serving 134 million individuals in all 50 states and more than 125 countries. Shares increased on a second quarter upside surprise, including an EPS beat and medical loss ratio of 82.3%, 30 basis points better than investors had feared after management’s warning of higher Medicare Advantage utilization. Investors were also reassured by management confidence that it had priced to trend, which it backed up by raising the low end of 2023 guidance. We remain positive on this market-leading managed care company with revenue twice that of its closest competitor. The company continues to gain Medicare Advantage share given attractive and stable benefits and could achieve greater profitability as medical management is deployed across newer, higher acuity lives. We believe UnitedHealth has a broad number of levers at its command and can sustainably deliver 13% to 16% annual long-term earnings growth.”
12. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 112
We saw 112 hedge funds long Advanced Micro Devices, Inc. (NASDAQ:AMD) in the second quarter. Their total stake value was $6.9 billion.
Advanced Micro Devices, Inc. (NASDAQ:AMD) is a semiconductor company that is based in Santa Clara, California. The company offers x86 microprocessors and graphics processing units alongside chipsets and embedded processors. It is one of the top American stocks to buy for the upcoming year.
Cody Acree, an analyst at Benchmark, maintained a Buy rating on Advanced Micro Devices, Inc. (NASDAQ:AMD) on August 3. The analyst also raised his price target on the stock from $108 to $145.
ARK Investment Management was the largest shareholder in Advanced Micro Devices, Inc. (NASDAQ:AMD) at the end of the second quarter, holding 266,380 shares in the company.
Here’s what Artisan Partners said about Advanced Micro Devices, Inc. (NASDAQ:AMD) in its second-quarter 2023 investor letter:
“Among our top contributors were Advanced Micro Devices, Inc. (NASDAQ:AMD), NU Holdings and Netflix. AMD’s data center CPUs are used in the cloud service provider (CSP) servers. In addition to the broader secular tailwind from cloud adoption, the company has a performance and pricing advantage over Intel, which we believe will enable it to continue capturing market share. However, the recent stock price rally was due to growing excitement around the company’s AI exposure. It will launch its new MI300 graphics processing unit (GPU) chip later this year to compete against the dominant market leader NVIDIA. Similar to its approach that won market share from Intel within the CPU market, AMD’s product will aim to provide similar performance at a more attractive price. AMD is already working with Microsoft and Meta, while Amazon publicly stated that it is evaluating AMD’s inferencing chips. Using assumptions around the total GPU market size, potential market share gains and price points, our research indicates this could be a $20 billion opportunity for AMD. That would nearly double its revenue. While the company has not historically missed many deadlines, there is execution risk as it works to manufacture and distribute these complex chips at scale, which, combined with an elevated valuation after the stock’s strong performance run, led us to trim the position.”
11. Netflix, Inc. (NASDAQ:NFLX)
Number of Hedge Fund Holders: 114
Netflix, Inc. (NASDAQ:NFLX) is a movies and entertainment company operating in the communication services sector. The company is based in Los Gatos, California, and offers TV series, documentaries, feature films, and mobile games on its platform.
Our hedge fund data shows 114 hedge funds long Netflix, Inc. (NASDAQ:NFLX) in the second quarter, with a total stake value of $8.4 billion.
Shares of Netflix, Inc. (NASDAQ:NFLX) were upgraded from Equal-Weight to Overweight on October 19 by Benjamin Swinburne, an analyst at Morgan Stanley. The analyst also raised his price target on the stock from $430 to $475.
Like Apple Inc. (NASDAQ:AAPL), Berkshire Hathaway Inc. (NYSE:BRK-B), and UnitedHealth Group Incorporated (NYSE:UNH), Netflix, Inc. (NASDAQ:NFLX) is one of the best American stocks many elite hedge funds are piling into.
10. salesforce.com, inc. (NYSE:CRM)
Number of Hedge Fund Holders: 122
A Buy rating was reiterated on shares of salesforce.com, inc. (NYSE:CRM) on October 4 by Terry Tillman, an analyst at Truist Securities. The analyst also maintained a price target of $275 on the stock.
In total, 122 hedge funds were long salesforce.com, inc. (NYSE:CRM) in the second quarter. Their total stake value was $7.2 billion.
Based in San Francisco, California, salesforce.com, inc. (NYSE:CRM) is an application software company. It provides Customer Relationship Management (CRM) technology.
9. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 135
Beech Hill Partners was the most prominent shareholder in Apple Inc. (NASDAQ:AAPL) at the end of the second quarter, holding 54,633 shares in the company.
Apple Inc. (NASDAQ:AAPL) is an information technology company based in Cupertino, California. It designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories. It is known as one of the top American stocks to buy.
An Overweight rating was maintained on shares of Apple Inc. (NASDAQ:AAPL) on October 16 by Erik Woodring, an analyst at Morgan Stanley. The analyst also placed a price target of $210 on the stock.
We saw 135 hedge funds long Apple Inc. (NASDAQ:AAPL) in the second quarter, with a total stake value of $193.9 billion.
8. Mastercard Incorporated (NYSE:MA)
Number of Hedge Fund Holders: 139
Mastercard Incorporated (NYSE:MA) was seen in the 13F holdings of 139 hedge funds in the second quarter. Their total stake value was $14.7 billion.
Keybanc analyst Josh Beck maintained an Overweight rating on shares of Mastercard Incorporated (NYSE:MA) on October 18. The analyst also raised his price target on the stock from $435 to $440.
Based in Purchase, New York, Mastercard Incorporated (NYSE:MA) is a transaction and payment processing services company. It offers integrated products and value-added services for account holders, merchants, and financial institutions, alongside its transaction processing services.
7. Uber Technologies, Inc. (NYSE:UBER)
Number of Hedge Fund Holders: 144
Holding 124,652 shares in the company, Beech Hill Partners was the largest shareholder in Uber Technologies, Inc. (NYSE:UBER) at the end of the second quarter.
Bernie McTernan, an analyst at Needham, reiterated a Buy rating on shares of Uber Technologies, Inc. (NYSE:UBER) on September 27. The analyst also maintained a price target of $60 on the stock.
Uber Technologies, Inc. (NYSE:UBER) is a passenger ground transportation company based in San Francisco, California. The company develops and operates proprietary technology applications for ridesharing services and has established itself as one of the best American stocks to buy.
In the second quarter, 144 hedge funds were long Uber Technologies, Inc. (NYSE:UBER). Their total stake value was $7.7 billion.
This is what RiverPark Advisors said about Uber Technologies, Inc. (NYSE:UBER) in its second-quarter 2023 investor letter:
“Uber Technologies, Inc. (NYSE:UBER): UBER was a top contributor for the quarter following better than expected 1Q23 earnings and 2Q23 guidance. Gross bookings of $31.4 billion were up 22% year over year. Mobility gross bookings of $15 billion grew 44% over the last year driven by a combination of product innovation and driver availability. Delivery gross bookings, also $15 billion, were up 12% from last year and accelerated through the quarter. 1Q Adjusted EBITDA of $761 million, up $593 million year over year, significantly beat management’s $660-$700 million guidance and the company generated $549 million of free cash flow versus a loss last year. Management guided to continuing growth in 2Q Gross Bookings (13%-17% growth) and Adjusted EBITDA (of $800- $850 million).
UBER remains the undisputed global leader in ride sharing, with a greater than 50% share in every major region in which it operates. The company is also a leader in food delivery, where it is number one or two in the more than 25 countries in which it operates. Moreover, after a history of losses, the company is now profitable, delivering expanding margins and substantial free cash flow. We view UBER as more than just ride sharing and food delivery, but also as a global mobility platform with the ability to sell to its 130 million users (by comparison, Amazon Prime has 200 million members) and penetrate new markets of on-demand services, such as package and grocery delivery, travel, truck brokerage (the company had $1.4 billion in Freight revenue for 1Q23), and worker staffing for shift work. Given its $4.2 billion of unrestricted cash and $5 billion of investments, the company today has an enterprise value of $84 billion, indicating that UBER trades at 20x next year’s estimated free cash flow.”
6. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 171
Visa Inc. (NYSE:V) was seen in the portfolios of 171 hedge funds in the second quarter, with a total stake value of $24.9 billion.
Visa Inc. (NYSE:V) is another transaction and payment processing services company on our list. It is based in San Francisco, California.
Oppenheimer’s Dominick Gabriele maintained an Outperform rating on shares of Visa Inc. (NYSE:V) on October 18. The analyst also raised his price target on the stock from $248 to $252.
Like Apple Inc. (NASDAQ:AAPL), Berkshire Hathaway Inc. (NYSE:BRK-B), and UnitedHealth Group Incorporated (NYSE:UNH), Visa Inc. (NYSE:V) is one of the top American stocks to buy heading into 2024.
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Disclosure: None. 14 Best American Stocks To Buy Heading into 2024 is originally published on Insider Monkey.