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6 Stocks the Smart Money is Buying for 2024
In this article, we'll explore the six stocks that some of the world's top investors are buying with billions of dollars. By understanding the strategies of elite investors like Warren Buffett, Bill Ackman, Michael Burry, and Seth Klarman, we can enhance our own investing skills. These financial giants have recently made significant purchases, providing us with a treasure trove of insights. Stick around until the end, as you might just discover your next great investment idea.
Carl Icahn's Bold Move: JetBlue Airways (JBLU)
Carl Icahn, a renowned activist investor, has set his sights on JetBlue Airways. JetBlue is a U.S.-based airline focusing its operations on six major cities: New York, Boston, Orlando, Fort Lauderdale, Los Angeles, and San Juan, Puerto Rico. By concentrating its efforts in these key locations, JetBlue competes effectively against industry giants like Delta and American Airlines.
Icahn, who bought nearly 10% of JetBlue's shares, aims to turn the struggling airline around. He successfully placed two of his representatives on JetBlue's board to drive profitability. Despite JetBlue being unprofitable since 2020 and its stock plummeting from $21 in 2021 to just $7 now, Icahn sees potential for a significant rebound.
Warren Buffett's Bet on Chevron (CVX)
Warren Buffett, the Oracle of Omaha, has been investing heavily in Chevron, an oil company, over the past few years. Berkshire Hathaway, Buffett’s company, now owns nearly 7% of Chevron, making it the largest non-index fund owner. Chevron, a supermajor oil company, operates across all three segments of the oil and gas industry: upstream, midstream, and downstream.
Chevron's impressive market cap of $280 billion and its $235 billion in revenue in 2022 showcase its dominance. Buffett's significant investment suggests confidence in Chevron's ability to maintain strong financial performance, especially with its $38 billion in cash flow that year.
Seth Klarman's Special Situation: Jacobs Solutions (J)
Seth Klarman's recent large purchase in Jacobs Solutions highlights a unique investment strategy. Jacobs Solutions provides technical professional services, including engineering and construction, for various clients. Typically, consulting companies don't have a wide moat, but Klarman's interest lies in a special situation.
Jacobs Solutions is undergoing a complex transaction, separating part of its business and merging it with another company. This intricate deal presents a potentially lucrative opportunity. Klarman’s strategy involves digging deep to uncover hidden value, and Jacobs Solutions fits this model perfectly.
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Bill Ackman's Royalty Stream: Alphabet (GOOGL)
Bill Ackman has added Alphabet, Google's parent company, to his highly concentrated investment fund. Google now represents nearly 20% of his portfolio. Ackman favors businesses with royalty-like revenue streams, where they earn a percentage of industry sales without heavy investment in physical assets.
Google’s business model mirrors this. For example, companies pay Google to place their products in search results. Despite not manufacturing these products, Google profits from their sales. Concerns over competition from AI company OpenAI and its product ChatGPT briefly drove Google’s stock down, creating a buying opportunity for Ackman.
Michael Burry's Healthcare Play: HCA Healthcare (HCA)
Michael Burry, known for his bold and often controversial investments, has invested in HCA Healthcare. HCA is the largest for-profit hospital operator in the U.S., running 175 hospitals and numerous outpatient centers. The company generated nearly $65 billion in revenue in 2023, with a $5.2 billion profit.
Despite concerns about future healthcare industry regulations potentially reducing profitability, Burry sees value in HCA’s current operations. His investment highlights confidence in HCA’s ability to navigate industry challenges and continue generating strong returns.
Mohnish Pabrai's Value Find: Warrior Met Coal (HCC)
Mohnish Pabrai, inspired by Warren Buffett and Benjamin Graham, has invested in Warrior Met Coal, a company producing metallurgical coal for the steel industry. Coal companies are often overlooked due to environmental concerns, creating potential bargains for value investors.
Warrior Met Coal, trading at a low PE ratio of six, has paid out nearly $30 per share in dividends over the past seven years. With a market cap of $3 billion and $750 million in cash, the company is financially robust. Pabrai’s investment underscores his belief in the long-term value of this undervalued stock.
Conclusion
These six stocks showcase the diverse strategies of some of the world's greatest investors. From Carl Icahn’s activist approach with JetBlue to Warren Buffett’s confidence in Chevron’s enduring value, these investments provide valuable lessons in identifying opportunities and understanding market dynamics. By studying these super investors, we can gain insights into building a robust investment portfolio.
Key Takeaway: Investing like the pros involves deep analysis, understanding market trends, and seizing opportunities created by market fluctuations. By following the strategies of these financial giants, we can improve our own investing acumen and make more informed decisions.
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- Author:Jiroop
- URL:https://jiroop.com/article/smart-money-stocks-2024
- Copyright:All articles in this blog, except for special statements, adopt BY-NC-SA agreement.
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