Did you ever copy from the smart kid in class and then score straight A’s? Well, now you can replicate this savvy move with top investor trades — and make some money while you’re at it!
By tracking the most popular hot stocks of investors who consistently outperform the market, you can easily boost your own returns. And unlike following analysts, these are investors who are actually investing their own money. This means no conflicts of interest or corporate politics going on here. Just pure stock picks.
In order to find these key top investor stocks, we used TipRanks’ Individual Investor Sentiment tool. This nifty tool enables you to pinpoint the most popular stocks from the best-performing investors in any sector. Even more usefully we can see if top investors are ramping up their holdings over the last month/week, as well as the proportion of the portfolio these investors (on average) dedicate to that stock.
Interestingly, as we will soon discover, investors don’t always agree with the Street — especially when it comes to controversial hot stocks like Exxon Mobil (NYSE:XOM).
So without further ado, let’s delve into these seven top stock picks:
Hot Stocks: Netflix (NFLX)
Streaming giant Netflix (NASDAQ:NFLX) has had a dramatic run, exploding by over 115% year-to-date. So it’s no surprise that top-performing investors are still displaying a very bullish sentiment on the stock. In both the last week and month, top investors have ramped up their NFLX holdings. And not only that, on average these investors allocate almost 11% of their portfolios specifically to Netflix.
These investors are clearly betting that the stock still has substantial growth potential ahead. And now five-star analyst David Miller of Imperial Capital has joined the bull camp. He has just initiated NFLX coverage with the stock’s highest price target of $503. From current levels this indicates sizable upside potential of 21%.
Miller is skeptical of Netflix detractors who see competition as a big problem for the stock. “In reality, there’s not much competition,” wrote Miller. “As such, we continue to scratch our heads as to why the detractors on this name keep citing ‘competition’ as a reason either to short the stock or sell it prematurely.”
He believes Netflix’s greatest competitive advantage is its pricing structure, and the value the consumer receives for that structure. For just $7.99 per month, consumers have access to a huge library of movies and TV shows dating all the way back to the 1960s. In contrast, consumers can end up cashing out up to $5.99 per film for a rival video-on-demand service.
In total, NFLX scores a “Moderate Buy” analyst consensus rating.
Hot Stocks: Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) has multiple positive catalysts right now. And top investors are clearly upbeat about the stock’s direction. Our data shows that the stock has a “Very Positive” top investor sentiment. In the last week, portfolios holding MSFT increased by 1%. This is with an average holding size of 4.3% of the portfolio.
These investors are banking on the success of Microsoft’s fast-growing Azure cloud platform. “Azure has replaced Windows as the platform underpinning Microsoft’s enterprise offering, and we forecast it exceeding $100 billion revenue over the next decade,” top Atlantic Equities analyst James Cordwell wrote at the end of June. He has just reiterated his MSFT “buy” rating with a $125 price target (22% upside potential).
The analyst adds: “With Office 365, Microsoft has already established a strong position in the software as a service market and there remains robust growth potential as the greater accessibility of the cloud delivery model continues to drive expansion in the user base and customers steadily upgrade from basic packages.”
He models for Azure to reach a whopping $115 billion revenue in 10 years’ time (versus $185 billion for Amazon Web Services). Overall, analysts are very bullish on this “Strong Buy” stock. In the last three months, MSFT has received 17 buy ratings vs just one hold and one sell rating.
Hot Stocks: Pfizer (PFE)
Drug giant Pfizer (NYSE:PFE) is seeing a significant increase in top investor attention this month. Indeed, in the last 30 days the number of top portfolios holding PFE rose 2.7%. This is with an average 2.2% of the portfolio dedicated to the stock.
No doubt these investors will be keeping a close eye on headlines over the next few days. Pfizer has just made two big announcements: 1) that it will split its business into three units beginning 2019, one of which will include a hospital segment; and 2) that it will postpone increasing drug prices for a further six months. The move comes following an “extensive” conversation between President Donald Trump and Pfizer’s CEO Ian Read.
Following these revelations, Cantor Fitzgerald analyst Louise Chen reiterated her “buy” rating. This comes with a bullish $45 price target (20% upside potential). She approves of the drastic business shakeup, writing: “We think this news is positive for PFE and underscores our view that the company’s long-term growth prospects are underappreciated as the impact of LOE [loss-of-exclusivity] headwinds diminish in 2020+.” However the overall analyst consensus remains a more hesitant “moderate buy.”
Hot Stocks: Starbucks (SBUX)
The world runs on coffee. And as one of the world’s biggest coffee chains, Starbucks (NASDAQ:SBUX) is there to reap the rewards. This makes the company something of a stalwart stock in the face of recent volatility. Indeed our data shows that the number of top portfolios holding SBUX have surged on both a one-week and one-month basis.
This makes sense according to five-star Tigress Financial analyst Ivan Feinseth. He has just reiterated his “buy” rating on the stock as: “We believe significant upside exists in the shares from current levels and continue to recommend purchase and are confident long-term investors will be well rewarded.” He adds that the recent weakness in the stock on the CFO departure has created an attractive buying opportunity, especially in light of new business initiatives.
For example, SBUX’s global alliance with Nestlé’s expands Starbuck’s packaged coffee and drink brands globally. Nestlé S.A is paying $7.15 billion plus royalties for the exclusive rights to market, sell and distribute Starbucks brands of packaged coffees and teas. According to Feinseth “SBUX’s strong balance sheet and cash flow will enable it to fund growth and along with the payment from Nestlé, will further its ability to enhance shareholder returns.”
He doesn’t have a price target on the stock. However, the $60 average analyst price target indicates sweet upside potential of 20% from current levels. This is with a “moderate buy” analyst consensus rating.
Hot Stocks: Pepsi (PEP)
Interestingly top investors are piling into Pepsico (NYSE:PEP) over the last month. And so far it would appear they made the right call. On July 10, the drinks giant reported better-than-expected earnings results — defying naysayers who had predicted another quarter of lackluster sales. “Every part of our business in North American Beverages is showing sequential improvement,” CEO Indra Nooyi said. “As we go into the third quarter, we feel good about the trend rate.”
Most notably, PepsiCo’s net revenue increased 2.4% to $16.09 billion, with $5.19 billion of this figure coming from beverages. Nooyi revealed that zero sugar Pepsi and diet Pepsi were “flying off the shelves.” The company is making a robust effort in the diet drinks category as it faces tough competition from rival Coca-Cola. “(PepsiCo) did seem like that they are starting to see some sort of inflection point in the (beverages) results” commented Edward Jones analyst Brittany Weissman.
However, far and away the real success story is the FLNA snacks segment. With new flavors, healthier preparation and more attractive packaging, Pepsi is smashing the salty snacks. In the latest earnings report, Pepsi once again demonstrated solid and accelerating growth for Frito-Lay. “Frito-Lay North America delivered balanced volume growth and net price realization driven by great marketplace execution, innovation and creative brand marketing,” commented Nooyi.
Nonetheless, the Street prefers to wait and see right now with a “hold” consensus rating.
Hot Stocks: Facebook (FB)
Social media giant Facebook (NASDAQ:FB) appears unstoppable right now. And top investors are moving to take advantage of the company’s ongoing success story. In the last week, the number of portfolios holding FB increased by 1.2%. This is with an average of 7.5% of each portfolio allocated to the stock.
Through Facebook, these investors can also get their hands on the rampantly popular photo-sharing app Instagram. The numbers speak for themselves: Instagram can already claim over 1 billion users who visit the app on a daily basis. Plus these users are posting twice as many stories daily as on rival app Snap.
Top BTIG analyst Richard Greenfeld has just reiterated his “buy” rating with a very bullish $275 price target (35% upside potential). He notes that consumers “simply could not care less” about the privacy scandal, while Instagram is behaving likes an “absolute monster.” Highly strategic new Instagram features like Instagram TV and group video chat will further propel growth. He believes that the monetization of Instagram is “still in the early innings” especially when you consider that it is fast becoming the “most powerful and valuable mall in the world.”
Overall, top investors and analysts stand united on FB. As well as a very positive investor sentiment, FB also boasts a ‘Strong Buy’ analyst consensus rating. In the last three months 24 analysts have published FB Buy ratings vs just 1 hold rating and 1 sell rating.
Hot Stocks: Exxon Mobil (XOM)
Last but by no means least we have Exxon Mobil. While the stock has attracted a lot of bearish attention from the Street, this doesn’t appear to have deterred top investors. In fact in the last month the number of best-performing portfolios holding XOM has soared 2.6%. This is in contrast to the Street’s “hold” consensus rating on XOM.
To explain this we can turn to the wisdom of RBC Capital’s Biraj Borkhataria. He says: “The majority of investors we have spoken to in recent months have limited weightings in Exxon, yet it remains one of the most important benchmark stocks for global energy investors. We believe this disconnect provides significant potential upside should the company start to show evidence of delivery.” Great news! He has a “buy” rating and $100 price target on the stock, indicating over 20% upside potential.
And most promisingly, he believes the company is capable of making significant improvements. “From now to 2025 we see the potential for substantial dividend growth alongside superior returns, both of which appear underappreciated to us.” In fact he is confident that Exxon is capable of leading the sector on earnings, cash flow and dividend growth over 2020-23. “Ultimately, we see Exxon’s earnings potential implying dividend growth of c5% per annum over the medium term, vs peers 0%-3%,” he wrote.
TipRanks.com offers exclusive insights for investors by focusing on the moves of experts: Analysts, Insiders, Bloggers, Hedge Fund Managers and more. See what the experts are saying about your stocks now at TipRanks.com.
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