In this article, we will take a detailed look at Hedge Funds and Insiders Are Buying These 10 Stocks. For a quick overview of such stocks, read our article Hedge Funds and Insiders Are Buying These 5 Stocks.
Stocks are moving higher after the Federal Reserve’s indication that it’s still eyeing three rate cuts this year. While many analysts have voiced their skepticism about the Fed’s claim, investors seem to keep looking beyond the rate cuts debate. Market analysts believe the AI-led rally has the potential to further boost stock prices despite valuation concerns. In a fresh note, Wells Fargo analysts said that the S&P 500 valuations are “stretched” by “most measures.” However, they said the stocks could still move higher as companies have higher earnings and revenue growth along with “acceptable” debt levels. Wells Fargo analysts also drew a contrast between the tech bubble of March 2000 and the market rally of today, adding that the market conditions today don’t have resemblance with the tech bubble of the past because of the underlying strengths of companies. However, Wells Fargo analysts did recommend investors to decrease their exposure to sectors like IT, Communications Services and Consumer Discretionary — which they believe are overvalued — and instead invest in undervalued stocks from sectors like Energy, Industrials and Healthcare.
UBS Still Expecting a Soft Landing
UBS in its report after the latest Federal Reserve decision also said that it continues to believe the US economy remains on a healthy track as the firm expects three rate cuts this year starting June. UBS said it believes a soft landing scenario still “makes sense” because of “moderating” growth, a decline in inflation and expected rate cuts. In this backdrop, UBS said it continues to recommend investors to buy quality stocks and bonds.
Luis Louro / shutterstock.com
Which quality stocks are currently in demand? In this article we decided to see the stocks corporate insiders and hedge funds are loading up on. For that we first used Insider Monkey’s insider trading stock screener to identify stocks that have seen heavy insider buying activity over the past few weeks. From these stocks we chose 10 stocks with the highest number of hedge fund investors. Some top names in the list include Humana Inc (NYSE:HUM), Snowflake Inc (NYSE:SNOW) and Caesars Entertainment Inc (NASDAQ:CZR). But why is it important to keep tabs on hedge fund and insider activity? 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).
10. Devon Energy Corp (NYSE:DVN)
Number of Hedge Fund Investors: 50
Devon Energy Corp (NYSE:DVN) ranks 10th in our list of the stocks hedge funds and corporate insiders are loading up on. Devon Energy Corp’s (NYSE:DVN) CEO Rick Muncrief on March 4 amassed 15,000 shares of Devon Energy Corp (NYSE:DVN) at $44.42 per share. Since then the stock has increased by 9%.
As of the end of the fourth quarter of 2023, 50 hedge funds out of the 933 funds tracked by Insider Monkey had stakes in Devon Energy Corp (NYSE:DVN).
9. Blackstone Inc (NYSE:BX)
Number of Hedge Fund Investors: 51
Reginald J. Brown is a board member at Blackstone Inc (NYSE:BX). On February 21, Brown loaded up on 2,400 Blackstone Inc (NYSE:BX) shares at $125.63 per share. Since then the stock inched up just 1.24%.
Morgan Stanley recently issued a list of high conviction stocks set to grow amid productivity gains in the US on back of the AI wave. Blackstone Inc (NYSE:BX) made it to the list.
Out of the 933 hedge funds in Insider Monkey’s database, 51 hedge funds had stakes in Blackstone Inc (NYSE:BX). The biggest stake in Blackstone Inc (NYSE:BX) is owned by Stephen Mandel’s Lone Pine Capital which owns a $290 million stake in Blackstone Inc (NYSE:BX).
Baron Real Estate Fund stated the following regarding Blackstone Inc. (NYSE:BX) in its fourth quarter 2023 investor letter:
“We remain optimistic about the long-term prospects for Blackstone Inc. (NYSE:BX) and Brookfield because we believe both companies are likely to increase market share in a secular growth opportunity for alternative assets.
Institutional allocations to alternative investment assets such as real estate, infrastructure, and private equity are likely to continue to grow significantly in the years ahead because alternatives have a long track record of generating attractive relative and absolute returns with less volatility than several other investment options.
We are bullish on the long-term prospects for Blackstone and Brookfield. Both companies are led by exceptional management teams that attract and retain exceptional talent. They are two of the largest real estate managers in the world with impressive investment track records. Both Blackstone and Brookfield have global franchises, strong brands, and loyal customers.
We believe the shares of both companies are attractively valued and are optimistic about the long-term potential for the Fund’s investments in both companies.”
8. Biogen Inc (NASDAQ:BIIB)
Number of Hedge Fund Investors: 51
Biogen Inc (NASDAQ:BIIB) ranks eighth in our list of the stocks with recent insider purchases that are also popular among hedge funds. On February 15, Eric K Rowinsky, a director at Biogen Inc’s (NASDAQ:BIIB) board, amassed 455 shares of Biogen Inc (NASDAQ:BIIB) at $222.54 per share. The stock is down by about 2.35% since then.
Out of the 933 funds tracked by Insider Monkey, 51 hedge funds had stakes in Biogen Inc (NASDAQ:BIIB). The biggest stakeholder of Biogen Inc (NASDAQ:BIIB) is Samuel Isaly’s OrbiMed Advisors which owns a $214 million stake in Biogen Inc (NASDAQ:BIIB).
In addition to BIIB, stocks like Humana Inc (NYSE:HUM), Snowflake Inc (NYSE:SNOW) and Caesars Entertainment Inc (NASDAQ:CZR) are also seeing insider buying activity.
Last month, the company talked about 2024 guidance during its earnings call:
“As has been the case in previous years, we expect Q1 to be seasonally weaker quarter, as compared to Q4 for our MS business in the U.S., and that’s driven by higher discounts and allowances and some channel dynamics. We also expect contract manufacturing revenue to be significantly lower throughout 2024, as compared to 2023. This is in part due to completing certain batch commitments in 2023, as part of the 2020 sale of Hillerod, which is located in Denmark. We had manufacturing operations there. And these batch commitments contributed roughly $320 million in 2023, which will not recur in 2024.
The increase in revenue from new product launches and decrease in contract manufacturing revenue, along with lower idle capacity charges, are expected to have a favorable impact on cost of sales as a percentage of revenue for 2024. We also believe we can grow our operating income at a low-double-digit percentage and operating margins by a mid-single-digit percentage, as compared to 2023. We expect this to be driven by improved cost of sales as a percentage of revenue, as well as lower expected operating expenses, resulting from our Fit for Growth initiative. On Fit for Growth, we continue to expect to generate approximately $1 billion in gross savings and $800 million in savings net of reinvestments by 2025. We have achieved approximately $200 million of savings in 2023 and are on track to realize another $200 million in 2024, which would put us at $400 million or half of the overall net savings by the end of this year with the remainder in 2025.
In 2024, we expect our 50% portion of SG&A spend for LEQEMBI, which, as a reminder, is not included in our Fit for Growth assumptions and the reallocation of resources for ADUHELM to roughly offset. With all of these considerations in mind, we expect our full-year 2024 combined R&D and SG&A spend to total approximately $4.3 billion. We expect our other income and expense line to continue to be a headwind this year, given the reduction in interest income and increase in interest expense as a result of the Reata acquisition. And so in 2024, we expect an improving revenue profile, improved margins, and a return to non-GAAP EPS growth. Our number one goal remains to return to sustainable growth, and we remain committed to this goal and to creating long-term value for our shareholders.”
Read the full earnings call transcript here.
7. American International Group Inc (NYSE:AIG)
Number of Hedge Fund Investors: 51
American International Group Inc (NYSE:AIG) is one of the notable stocks that is being bought by both hedge funds and corporate insiders. On March 14, John Inglis, a director at American International Group Inc’s (NYSE:AIG) board, loaded up on 659 shares of American International Group Inc (NYSE:AIG) at $75.39 per share. Since then through March 21 the stock has gained about 1.1%
Out of the 933 funds in Insider Monkey’s database, 51 hedge funds had stakes in American International Group Inc (NYSE:AIG). The biggest hedge fund stakeholder of American International Group Inc (NYSE:AIG) during this period was Natixis Global Asset Management’s Harris Associates which owns a $1.5 billion stake in American International Group Inc (NYSE:AIG).
In addition to AIG, hedge funds are also buying Humana Inc (NYSE:HUM), Snowflake Inc (NYSE:SNOW) and Caesars Entertainment Inc (NASDAQ:CZR).
Diamond Hill Large Cap Strategy stated the following regarding American International Group, Inc. (NYSE:AIG) in its fourth quarter 2023 investor letter:
“Other top contributors in Q4 included Allstate, American International Group, Inc. (NYSE:AIG) and Target. Insurance company AIG is likewise benefiting from improved underwriting margins while simultaneously making progress selling its stake in life insurer Corebridge and redeploying the proceeds into share repurchases at attractive prices.”
6. Willscot Mobile Mini Holdings Corp (NASDAQ:WSC)
Number of Hedge Fund Investors: 53
Workspace and storage solutions company WillScot Mobile Mini Holdings Corp (NASDAQ:WSC) ranks sixth in our list of the stocks hedge funds and insiders are buying. WillScot Mobile Mini Holdings Corp’s (NASDAQ:WSC) CEO Bradley L. Soultz on March 4 bought 5,000 shares of WillScot Mobile Mini Holdings Corp (NASDAQ:WSC) at $47.76 per share. Since then the stock has lost about 1.8% in value.
As of the end of the fourth quarter of 2023, 53 hedge funds tracked by Insider Monkey had stakes in WillScot Mobile Mini Holdings Corp (NASDAQ:WSC). The most notable stake in WillScot Mobile Mini Holdings Corp (NASDAQ:WSC) is owned by Leon Cooperman’s Omega Advisors which owns a $133 million stake in WillScot Mobile Mini Holdings Corp (NASDAQ:WSC).
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Disclosure. None. Hedge Funds and Insiders Are Buying These 10 Stocks was initially published on Insider Monkey.