generic 10 Best Guru Stocks To Buy Now
In this article, we discuss 10 best Guru stocks to buy now. If you want to see more stocks in this selection, check out 5 Best Guru Stocks To Buy Now.
Guru ETF allows investors access to the best investments of some of the largest, most well-known hedge funds in the finance world. By replicating the strategies of top hedge funds, Guru aims to take advantage of their elite research and resources to exceed US equity benchmarks. Guru has an expense ratio of 0.75%, enabling higher cost efficiency while providing access to best hedge fund ideas.
Guru ETF was established in April 2012 and it has $45.58 million in net assets as of October 18, 2022. The portfolio has 77 holdings and a 30-day SEC yield of 0.60%. The fund distributes dividends semi-annually. Guru ETF seeks to provide investment results that track the price and yield performance, before fees and expenses, of the Solactive Guru Index. As of September 30, Guru’s 10-year annualized returns were 7.58%, compared to the benchmark return of 7.92% over the same period.
Guru invests primarily in the information technology, healthcare, consumer discretionary, industrials, communication services, and financial sectors. The best Guru stocks to buy now include Texas Pacific Land Corporation (NYSE:TPL), The Allstate Corporation (NYSE:ALL), and Bausch Health Companies Inc. (NYSE:BHC).
Our Methodology
We selected the top 10 stocks from Guru ETF’s portfolio as of October 18. The stocks are ranked according to the fund’s stake value in each holding. Insider Monkey’s database of 895 elite hedge funds tracked as of the end of the second quarter of 2022 was used to assess the hedge fund sentiment around the securities.
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Best Guru Stocks To Buy Now
10. Humana Inc. (NYSE:HUM)
Number of Hedge Fund Holders: 69
Percentage of Guru Index ETF’s Net Assets as of October 18: 1.55%
Humana Inc. (NYSE:HUM) was founded in 1961 and is headquartered in Louisville, Kentucky. It is a health and well-being company in the United States, operating through three segments – Retail, Group and Specialty, and Healthcare Services. As of October 18, Guru ETF features 1,406 shares of Humana Inc. (NYSE:HUM) and the stock represents 1.55% of the total net assets.
On September 20, RBC Capital analyst Frank Morgan raised the price target on Humana Inc. (NYSE:HUM) to $544 from $541 and maintained an Outperform rating on the shares. The analyst renewed his model after the company's updated outlook on its Investor Day, noting that its "strong" long-term earnings targets are supported by growth in key Medicare Advantage and value-based care initiatives. Humana Inc. (NYSE:HUM)’s core Medicare Advantage franchise should see moderate growth in 2023 before exceeding market growth in 2024, the analyst told investors in a research note.
According to Insider Monkey’s data, 69 hedge funds held stakes worth $3.72 billion in Humana Inc. (NYSE:HUM) at the end of June 2022, compared to 66 funds in the prior quarter worth $3.11 billion. Ken Griffin’s Citadel Investment Group is the leading stakeholder of the company, with 1.10 million shares valued at $519 million.
Like Texas Pacific Land Corporation (NYSE:TPL), The Allstate Corporation (NYSE:ALL), and Bausch Health Companies Inc. (NYSE:BHC), Humana Inc. (NYSE:HUM) is one of the best Guru stocks to invest in.
Here is what Baron Funds specifically said about Humana Inc. (NYSE:HUM) in its Q3 2022 investor letter:
“We added to our position in Humana Inc. (NYSE:HUM), a managed health care company which we believe is benefiting from favorable secular trends, including the aging of the population, increasing adoption of Medicare Advantage over traditional Medicare, and the shift to value-based health care. Humana has two businesses, a health plan business and a health care services business. The health plan business is focused on the Medicare Advantage (MA) program, a government program under which the Center for Medicare & Medicaid Services (CMS) contracts with private sector health insurance companies to provide health insurance benefits in exchange for contractual payments from CMS. Overall Medicare enrollment is growing as the baby boomer generation ages into the Medicare program and MA is growing faster than traditional Medicare because MA companies provide additional benefits like dental, vision, and hearing coverage at no extra cost. These trends should continue to drive growth in MA enrollment for many years. Humana is a strong number two player in MA after UnitedHealth and has typically grown its MA business faster than the market.
In Humana’s health care services business, which is branded CenterWell, the company provides pharmacy services, home care services, and operates primary care clinics. Humana is one of the largest senior-focused, value-based primary care organizations and is also the largest home health organization in the country. Humana’s health care services business is higher margin and faster growing than the health plan business and should help drive margin expansion and earnings growth for the consolidated business. At a recent Investor Day, management provided a 2025 adjusted EPS growth target of $37, representing a 14% CAGR from 2022.”
9. Chesapeake Energy Corporation (NASDAQ:CHK)
Number of Hedge Fund Holders: 67
Percentage of Guru Index ETF’s Net Assets as of October 18: 1.55%
Chesapeake Energy Corporation (NASDAQ:CHK) is an Oklahoma-based independent exploration and production company, engaged in the acquisition, exploration, and development of properties for the production and exploration of oil, natural gas, and natural gas liquids in the United States. Chesapeake Energy Corporation (NASDAQ:CHK) stock represents 1.55% of the total net assets of the Guru ETF, which makes it one of the best Guru stocks to buy now.
On October 19, Jefferies analyst Lloyd Byrne initiated coverage of Chesapeake Energy Corporation (NASDAQ:CHK) with a Buy rating and a $150 price target. He believes the "Option Value" of energy is up again, supported by a restricted capital cycle. While this is most prominent in oil & gas, it is also apparent in energy transition names, as per the analyst. He believes energy's "Option Value can stay higher for longer" without a meaningful uptick in investment across the industry, though he added that the present macro downturn is "likely to incrementally gain focus" within the group.
According to Insider Monkey’s second quarter database, 67 hedge funds were bullish on Chesapeake Energy Corporation (NASDAQ:CHK), compared to 59 funds in the prior quarter. Howard Marks’ Oaktree Capital Management is the largest stakeholder of the company, with 10.50 million shares worth $851.6 million.
Here is what ClearBridge Investments Dividend Strategy has to say about Chesapeake Energy Corporation (NYSE:CHK) in its Q1 2022 investor letter:
“In the early days of the invasion, we made two measured changes to the portfolio based on longer-term fallout we anticipated from Russia’s invasion of Ukraine. First, we initiated small positions in U.S. natural gas producers Chesapeake (NYSE:CHK).
Given its superior environmental profile compared to other fossil fuels, we have long favored natural gas in our energy holdings. Combustion of natural gas releases 50% less CO2 than coal, 25% less CO2 than gasoline and dramatically less particulate and pollution, per the U.S. Energy Information Administration. With the advances in shale production this century, the U.S. has become a natural gas powerhouse with some of the lowest-cost and largest reserves in the world. But because natural gas is difficult to ship across the ocean (it must be liquefied, which requires expensive infrastructure on both ends of the voyage), America’s gas bounty has ironically proved a burden for U.S. producers.
The surplus of natural gas in North America has resulted in low prices and weak earnings for gas-focused producers. Exports, while growing, are restrained by the high cost of building export infrastructure. Europe, in a Faustian bargain, has relied on abundant, inexpensive Russian gas transported by pipeline.
Despite the abundance of low-cost resources and a superior environmental profile, the investment case for U.S. natural gas producers was previously unfavorable due to oversupply in the domestic market.
In the days preceding the invasion, we were quick to realize the war would change global energy flows. Europe is shifting away from Russia and toward new sources of imported liquified natural gas. We purchased our stakes in Chesapeake to capitalize on these trends. The recently announced energy pact between the U.S. and Europe represents an early positive datapoint in support of this investment thesis.”
8. Snowflake Inc. (NYSE:SNOW)
Number of Hedge Fund Holders: 65
Percentage of Guru Index ETF’s Net Assets as of October 18: 1.56%
Snowflake Inc. (NYSE:SNOW) was incorporated in 2012 and is based in Bozeman, Montana. The company provides a cloud-based data platform in the United States and internationally. Guru ETF owns 4,114 shares of Snowflake Inc. (NYSE:SNOW) as of October 18, with market value exceeding $712 million. Snowflake Inc. (NYSE:SNOW) is one of the best Guru stocks to invest in.
Canaccord analyst Kingsley Crane on October 10 assumed coverage of Snowflake Inc. (NYSE:SNOW) with a Buy rating and raised the price target to $220 from $200. The company has demonstrated "a remarkable ability to grow at scale," doubling total revenue consecutively in the last three fiscal years, noted the analyst. He added that he cannot overstate the extent to which Snowflake Inc. (NYSE:SNOW)’s "simple and flexible" consumption-based pricing model has aided swift growth. He sees its FY29 financial targets as "surprisingly reasonable" and argues that they represent upside to shares from present levels.
According to Insider Monkey’s Q2 data, 65 hedge funds were long Snowflake Inc. (NYSE:SNOW), compared to 81 funds in the earlier quarter. Brad Gerstner’s Altimeter Capital Management is the biggest position holder in the company, with 17 million shares worth $2.36 billion.
Here is what Baron Fifth Avenue Growth Fund has to say about Snowflake Inc. (NYSE:SNOW) in its Q2 2022 investor letter:
“During the quarter, we added to three of our cloud infrastructure positions – Snowflake Inc., Cloudflare, Inc., and Datadog, Inc.While investors are concerned that a weakening macroeconomic environment will be a near term headwind to growth as customers may slow down their cloud expansions, we remain focused on the long term – duration of growth, competitive advantages, and innovative capabilities and are happy to increase our positions at a more attractive price. For example, Snowflake, the leading data cloud provider, during its recent user conference, announced several new products, which significantly expand its addressable market…” (Click here to see the full text)
7. Arch Capital Group Ltd. (NASDAQ:ACGL)
Number of Hedge Fund Holders: 23
Percentage of Guru Index ETF’s Net Assets as of October 18: 1.56%
Arch Capital Group Ltd. (NASDAQ:ACGL) provides insurance, reinsurance, and mortgage insurance products worldwide. The company was incorporated in 1995 and is based in Bermuda. Guru owns 14,653 shares of Arch Capital Group Ltd. (NASDAQ:ACGL), worth $712.7 million.
On October 14, investment advisory Barclays raised the price target on Arch Capital Group Ltd. (NASDAQ:ACGL) to $55 from $53 and maintained an Overweight rating on the shares ahead of the Q3 results. Analyst Tracy Benguigui issued the ratings update.
According to Insider Monkey’s Q2 data, 23 hedge funds held stakes worth $1 billion in Arch Capital Group Ltd. (NASDAQ:ACGL), compared to 38 funds in the prior quarter worth $1.3 billion. Bob Peck and Andy Raab’s FPR Partners is the leading position holder in the company, with 10.5 million shares valued at $476.5 million.
Here is what Baron Funds specifically said about Arch Capital Group Ltd. (NASDAQ:ACGL) in its Q2 2022 investor letter:
“Arch Capital Group Ltd. (NASDAQ:ACGL)’s share price declined 6.1% in the quarter and hurt performance by 30 bps. This was as the company continued to increase premiums written while raising prices. This strong pricing is resulting in robust returns on investments with increased earnings and cash flow that the company is using to repurchase its shares. We continue to believe that Arch will continue to generate mid-teens returns on capital. Arch’s valuation remains attractive.”
6. First Horizon Corporation (NYSE:FHN)
Number of Hedge Fund Holders: 43
Percentage of Guru Index ETF’s Net Assets as of October 18: 1.57%
First Horizon Corporation (NYSE:FHN) is a Tennessee-based bank holding company for First Horizon Bank. The company operates through three segments – Regional Banking, Specialty Banking, and Corporate. Guru owns 29,811 shares of First Horizon Corporation (NYSE:FHN) as of October 18, worth more than $715 million and representing 1.57% of the total assets.
On October 18, First Horizon Corporation (NYSE:FHN) reported its financial results for the third quarter of 2022. The company announced a Q3 non-GAAP EPS of $0.44, beating market estimates by $0.01. The revenue of $875 million increased 18.6% year-over-year, topping market consensus by $55.17 million. The bank saw resilient growth in loans and net interest income during the third quarter. First Horizon Corporation (NYSE:FHN)’s merger with IberiaBank remains on track to deliver approximately $200 million in annualized net cost savings by Q4, with $184 million in savings already realized.
According to Insider Monkey’s Q2 data, 43 hedge funds were bullish on First Horizon Corporation (NYSE:FHN), compared to 44 funds in the earlier quarter. Simon Sadler’s Segantii Capital is the largest stakeholder of the company, with approximately 12 million shares worth $260 million.
In addition to Texas Pacific Land Corporation (NYSE:TPL), The Allstate Corporation (NYSE:ALL), and Bausch Health Companies Inc. (NYSE:BHC), First Horizon Corporation (NYSE:FHN) features as one of the best stocks in the Guru portfolio.
Here is what Ave Maria specifically said about First Horizon Corporation (NYSE:FHN) in its Q2 2022 investor letter:
“First Horizon Corporation (NYSE:FHN) is a leading regional bank that merged with IBERIABANK Corporation in 2020 forming a regional financial services company with 412 branches across 12 southern states. On February 28, 2022, The Toronto-Dominion Bank (TD Bank) reached an agreement with First Horizon Corporation to acquire the bank for $25 per share.”
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Disclosure: None. 10 Best Guru Stocks To Buy Now is originally published on Insider Monkey.
