It isn’t easy to figure out which stocks billionaires are buying right now. With sky-high inflation, fears of recession, weak economic growth, Russia’s invasion of Ukraine, and a weaker consumer, the Dow Jones Industrial Average is down 12% on the year.
The S&P 500 is down 21%, with the NASDAQ down about 32%.
It’s been a terrible year. Yet, even as markets plunged, billionaire heavyweights have been buying beaten-down names.
That’s because they know every pullback has proven itself to be a long-term buy opportunity. Here’s a quick list of stocks billionaires are buying now.
| CL | Colgate-Palmolive | $73.84 |
| AGNC | AGNC Investment | $8.22 |
| MPW | Medical Properties | $11.45 |
| OXY | Occidental Petroleum | $72.60 |
| PYPL | PayPal | $83.58 |
| NVDA | Nvidia | $83.58 |
| DXCM | DexCom | $120.78 |
Colgate-Palmolive (CL)
Billionaire Dan Loeb’s Third Point just bought about $1 billion worth of Colgate-Palmolive (NYSE:CL).
That’s because the firm sees value in a potential spinoff of its Hill’s Pet Nutrition segment. According to Barron, if the company were to spin it off, that side of the business could see a valuation of about $20 billion.
Colgate-Palmolive’s Hill’s Pet Nutrition segment brought in about $909 million in the second quarter or about 20% of company sales. The company also plans to invest about $700 million in three dry pet food manufacturing plants in the U.S. from Red Collar Pet Foods.
Better, Colgate-Palmolive is just starting to pivot from a recent 52-week low. In addition, as investors wait for the stock to recover, they can collect a yield of 2.58% in the process.
AGNC Investment (AGNC)
With a yield of 18.2%, it’s no surprise billionaire investors are backing up the truck on mortgage real estate investment trust (REIT) AGNC Investment (NASDAQ:AGNC).
Billionaire Ken Griffin’s Citadel Advisors picked up just over 4.2 million shares of AGNC in the second quarter. Even Millennium Management’s Israel Englander bought about 2.8 million shares, as well.
Better, as I noted on Oct. 24, “This particular REIT focuses on mortgage-backed securities that are guaranteed by the U.S. government. While these securities are considered to have very little risk of default, they are susceptible to interest rate hikes. However, if the Fed signals it may soon hit pause on interest rate hikes, AGNC could run.”
Medical Properties (MPW)
Israel Englander’s Millennium Management firm picked up about 1.5 million shares of Medical Properties(NYSE:MPW), a down-and-out medical REIT that’s just starting to rebound. It carries a dividend yield of 10.69% at the moment and is another one of the top stocks billionaires are buying because of its current dividend yield.
The REIT, which has invested in 447 medical properties is now one of the world’s biggest hospital owners. It’s also been able to raise its dividend payments for the last eight years and may be able to raise them even more going forward.
“Healthcare REITs are viewed as a defensive investment against stock market declines,” James Milam, associate director, and lead analyst for healthcare REITs for Sandler O’Neill and Partners said. “Demand for health care facilities is based more on need and demographics than on business cycles.”
Occidental Petroleum (OXY)
Warren Buffett loves Occidental Petroleum (NYSE:OXY). In late September his Berkshire Hathaway firm invested another $350 million into the oil stock. That now raises the firm’s holdings to 194 million shares or 20.8% of the company.
“Buffett and his team, who last added to their Occidental position on Aug. 8, likely resumed buying this week because they saw the energy stock as a bargain once again,” Business Insider reported.
From the looks of a one-year OXY chart, the billionaire could get an opportunity to buy even more on the cheap. That’s because the stock now appears overbought at triple-top resistance dating back to early June.
It’s also over-extended on RSI, MACD, and Williams’ %R. From a current price, I wouldn’t be shocked to see it drop to support around $63 shortly. It’s one of the top stocks billionaires are buying.
PayPal (PYPL)
PayPal (NASDAQ:PYPL) has been beaten silly. Since mid-2021, the stock fell from about $300 to $87.35. All after the company was forced to cut its guidance on concerns sky-high inflation could put a dent in consumer spending.
Around that time, the company also said it only expected about 15 million to 20 million new accounts in 2022 from 48.9 million in 2021.
However, investors aren’t writing off the stock just yet. Not only does PYPL now trade at 3.7x sales, which is below its average of 9.5x sales, but billionaire Ray Dalio’s Bridgewater Associates also picked up another 1.15 million shares in the second quarter.
Better, PayPal got a boost with Amazon (NASDAQ:AMZN) allowing customers to use Venmo at checkout.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) is another one of the top stocks billionaires are buying. In the second quarter, billionaires John Overdeck and David Siegel of Two Sigma Investments bought just over 1.2 million shares of NVDA. While the stock plummeted in recent months, it’s starting to show big signs of life again.
Most recently, the stock jumped on news Meta Platforms (NASDAQ:META) said it would invest more in infrastructure to support its push into digitally immersive experiences.
As noted by Bloomberg contributor Jeran Wittenstein, “Meta Platforms projected capital spending of $34 billion to $39 billion in 2023, up from $30 billion to $34 billion this year.”
Remember, NVDA could be one of the top companies that could help with metaverse infrastructure, especially with a lead position in artificial intelligence and semiconductors.
NVDA is also getting a jump on the Industrial Omniverse, which is being used by Lowe’s (NYSE:LOW), BMW (OTC:BMWYY), Siemens(OTC:SIEGY), and Lockheed Martin (NYSE:LMT).
DexCom (DXCM)
After falling off a cliff, shares of DexCom (NASDAQ:DXCM) are also showing signs of life again.
Since the start of the year, the DXCM sipped from about $140 to a low of just under $70, before recovering to $101.25. Helping, billionaire Steven Cohen and Point72 Asset Management bought more than 900,000 shares of DXCM in the second quarter.
The company, which markets continuous glucose monitoring (CGM) devices, should continue to grow. After all, according to the Centers for Disease Control & Prevention, 37.3 million Americans (one in 10) have diabetes. About 20% of the population has it but has no clue they have it. On top of that, about 96 million Americans are pre-diabetic.
While that’s terrible news for many Americans, it’s helping to drive demand for CGM devices. Plus, according to Precedence Research, the global CGM market was estimated to be worth $4.7 billion in 2021. By 2030, the market could be worth just over $10 billion.
The company also just rolled out its DexCom G7 system for those aged two years and older in the UK, Ireland, Germany, Austria, and Hong Kong.
“Since Dexcom G6 came to market, we’ve eliminated over 15 billion finger pricks and helped improve the lives of more than 1.25 million people with diabetes around the world. We’re thrilled to begin the global rollout of Dexcom G7, our next-generation CGM technology, that vastly improves upon what everyone loves about G6,” Kevin Sayer, chairman, president and CEO, was quoted in a company press release.
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
