Stocks are hitting record highs right now. All three major indexes surged last week thanks to strong rate cut signals from Fed Chair Jerome Powell. For example, the S&P 500 closed on Friday above $3,000 for the first time. Meanwhile the Dow Jones Industrial Average also enjoyed its first close above $27,000 on Thursday, and the Nasdaq Composite ended the week up 1% at $8,244.
So where does this leave investors looking for new stock ideas? Let’s put it this way: Did you ever copy from the smart kid in class and then score straight A’s? Now you can replicate this savvy move with top investor trades — and make some money while you’re at it.
I scanned for the most popular stocks to buy right now according to top investors. This is based on data collected from the top 10% of TipRanks’ 76,000 Smart Portfolios.
The data reveals whether these investors are ramping up their holdings over the last month or week, as well as the proportion of the portfolio these investors (on average) dedicate to that stock. What’s more, we can also see whether the Street agrees with these popular stock picks.
Let’s take a closer look at how this all works out now:
Top Investor Stocks to Buy: Amazon (AMZN)
Is there anyone out there who doesn’t like Amazon (NASDAQ:AMZN)? This is the No. 1 most popular stock for investors. Almost half of top investors (45%) hold Amazon in their portfolios. And on average they dedicate a sizable 14.6% chunk of their portfolio to this one stock.
Luckily for investors, analysts are just as upbeat. Out of the 36 analysts covering the stock, only one analyst is staying on the sidelines. Barclays analyst Ross Sandler even highlights Amazon as his favorite stock this earnings season. The e-commerce giant is set to report its earnings on July 25.
“AMZN is our top mega-cap long idea heading into 2Q – you own the name into retail revenue growth acceleration regardless of margin compression, full stop,” the five-star analyst tells investors. He has a $2,050 price target on Amazon — while the Street’s average price target comes out at $2,243. That indicates 12% upside potential from current levels.
Interested in Amazon stock? Get a free AMZN Stock Research Report.
Home Depot (HD)
Home Depot (NYSE:HD) also has the thumbs up from top investors. While investors as a whole actually show a negative HD sentiment, if we look at only top investors the sentiment shifts to “Very Positive.”
Similarly, all analysts have a “Moderate Buy” consensus on HD. But top analysts specifically have a “Strong Buy” HD consensus. And of course, those are the two groups we care about the most.
RBC Capital’s Scot Ciccarelli falls into the bull camp. Following management meetings, he reiterated his buy rating on the home improvement chain. The analyst cited solid core sales trends despite the “noise” of 2019 (i.e. calendar shifts, weather, cycling hurricane sales, lumber pricing and tariffs). He also ramped up his price target from $213 to $229, suggesting 9% upside potential from current levels.
“While home price appreciation/PFRI growth has moderated, trends remain positive, factors like aging housing stock should fuel a steady-growth environment and HD should increasingly capitalize on share gains. We remain buyers of HD shares,” states the analyst. Get the HD Stock Research Report.
If you don’t know whether Visa (NYSE:V) or MasterCard (NYSE:MA) is the stock for you, take inspiration from top investors. Although both are popular picks, Visa comes out on top. That’s with “Very Positive” investor sentiment, and investors ramping up positions by 2.5% over the last thirty days. Indeed, a significant 26% of all best-performing investors hold Visa in their portfolio.
Given the stock’s “Strong Buy” analyst consensus, perhaps that’s not surprising. Most notably, Wells Fargo’s Donald Fandetti just hiked his price target to $200 from $181. He cites his view that “card companies will show slightly improving consumer trends this quarter.” Deutsche Bank’s Bryan Keane has gone even further, raising his V price target to $225 from $177. This suggests shares can climb 25% from current levels.
Meanwhile Nomura’s Bill Carcache adds that, “The safe haven nature of V — which offers potential 15%-20% through-the-cycle compound annual growth — is evidenced by the fact that it continues to trade at historical premium valuations despite deceleration fears.” Get the V Stock Research Report.
Top investors looking for dividend gains are turning to one stock in particular: AT&T (NYSE:T). That makes sense given the company’s generous dividend payout. In fact, T offers a hefty dividend yield of 6.08% versus the tech sector average of just 1%.
This results in an annualized payout, paid quarterly, of $2.04. And with dividend growth of 34 years and counting, T is the highest-yielding Dividend Aristocrat. The Dividend Aristocrats are a select group of 57 S&P 500 stocks with over 25 years of consecutive dividend increases.
“Sentiment should improve as the trajectory of subscriber losses improves in late 2019, but our sense is that investors are starting to look past it already — in the meantime the 6.08% dividend will continue to come through,” comments JP Morgan’s Philip Cusick. Get the T Stock Research Report.
Amazon isn’t the only e-commerce giant top investors are snapping up. China’s so-called equivalent Alibaba (NYSE:BABA) is also showing “Very Positive” sentiment right now.
BABA features in an impressive 31% of top investor portfolios. That’s with investors increasing Alibaba positions by 2.7% in the last thirty days.
Meanwhile all the analysts covering BABA stock are bullish. So no hold or sell ratings here. Plus the $222 average analyst price target indicates that shares can surge 32% from current levels, even though the stock is already up 26% year-to-date.
In the stock’s favor is this stark fact: Alibaba holds well over half of market share of China’s online shopping. Stifel Nicolaus’ Scott Devitt recently added BABA to the elite Stifel Select List. He spies a cheap opportunity to own a high quality stock with a long-term investment horizon.
“We continue to like Alibaba as a leading global e-commerce company that holds a dominant market share in China online shopping and operates an efficient, commission/advertising model in its core marketplace businesses, Tmall and Taobao” sums up the analyst. Get the BABA Stock Research Report.
32% of best-performing investors include Nvidia in their portfolio. And that number is up 3% over the last thirty days. However, the percentage of the portfolio dedicated to Nvidia is relatively small.
Analysts are cautiously optimistic on NVDA’s outlook. The stock shows a “Moderate Buy” consensus with a $189 price target (15% upside potential). Note that NVDA is so far trading up 26% year-to-date, which is respectable but less than Micron and way less than AMD’s stellar 89% rally.
Luckily top Merrill Lynch analyst Vivek Arya is on NVDA’s side. On July 22, the analyst stated that, “management remains bullish on its scale, incumbency, developer/software ecosystem and competitive position in some of the largest and fastest growth markets in semis including gaming, cloud acceleration, AI (artificial intelligence), autonomous cars and visual rendering.” He sees the company’s gaming business gradually improving as it recovers from prior crypto-currency headwinds and enters the seasonally strong 2H with very competitive new products. Get the NVDA Stock Research Report.
Shares in cloud communications services firm Twilio (NYSE:TWLO) have exploded by 69% year-to-date. TWLO co-founder Jeff Lawson is now a billionaire, largely thanks to his 5% company stake.
And despite its strong year-to-date growth, both analysts and investors still show a bullish sentiment on the company. Interestingly, only 7% of all portfolios hold Twilio, but when we focus on only top-performing portfolios, this number spikes to 17%.
“By leveraging its early market position, a highly efficient developer-led sales model and growing array of differentiated, higher-level functions on its platform TWLO has delivered exceptional organic growth,” cheers Needham analyst Richard Valera.
Plus “the company’s recent move up the stack into the application space with its Flex contact center adds another, meaningful growth driver to its business,” adds the analyst. Overall, TWLO shows a Strong Buy Street consensus with a $154 average analyst price target. Get the TWLO Stock Research Report.
TipRanks offers investors the latest insight into eight different sectors by tracking the activity of over 5,000 Wall Street analysts. As of this writing, Harriet Lefton did not hold a position in any of the aforementioned securities.