Every quarter, successful and big-time investors, such as Ray Dalio and Warren Buffett file their 13Fs, which gives the public an idea of what they’re buying and selling.
Today, we’ll talk about the top three stocks that investment gurus are buying this quarter. Let’s take a deeper look at the fundamentals and understand why they’re buying these stocks.
Google is one of the stock that super investors are buying today. Google or Alphabet was worth $150 a share back in 2021. The stock had a 30% correction in the second quarter, which was why investors started to buy Google shares.
Google’s 10-year historical average price to free cash flow reached 28.25. Now, the company’s price to free cash flow stands at 24 but it dropped to 20.5, which is its lowest in over a decade.
Google’s stock price is relatively cheap given that it’s a strong company. You should definitely load up on this stock if you’re a long-term investor.
The company’s operating cash flow margin has remained consistent in the past decade. Meanwhile, its free cash flow is more volatile, which means the company remains profitable.
Google has gone through periods wherein it had higher capital expenditures, which means the company is investing money for it to grow. It’s primarily focusing on the growth and expansion of its cloud infrastructure.
There’s a huge demand for cloud services in the Asia Pacific, which is why Google plans to bring Google Cloud to New Zealand, Thailand, and Malaysia. The company expects its cloud services to see massive growth in the coming years, specifically in the Asia Pacific region.
Amazon is the second and another stock that super investors are buying right now. In 2021, Amazon’s stock price reached $186 then it fell by about 45 %. The company was destroyed in the market and investors are using this drop to purchase more shares.
Just like Google, Amazon is also benefitting from the increase in demand for cloud services. They’re both leaders in the cloud market.
Amazon Web Services is growing at an incredible rate of 30% while producing $80 billion in annual revenue. Apart from Amazon Web Services, other areas of the business are seeing double-digit growth. For instance, its third-party seller services grew by 13%, its subscription services by 14%, and its Ad services by 21%.
Amazon’s operating cash flow continues to grow. It even reached $67.2 billion during the first quarter of 2021. Now, its operating cash flow as well as its overall profitability are getting decimated because of inflation.
The company didn’t want to pass off the increasing costs to their merchants and customers. Instead, they took on all of the costs, which negatively affected its margins. Fortunately, it seems like the company is back on track and has started to recover from its losses.
Meta is another tech stock that super investors are buying. It seems like these financial gurus are making the most out of the correction and they’re using the sp500 to buy tech stocks.
Let’s take a look at Meta. In September 2021, Meta was worth $382 per share and then it fell by about 58%. In the past year, the company stock has greatly suffered. Because of that, super investors are taking advantage of the opportunity to load up and add more shares of this company to their portfolio.
So far, Meta ranks as the most purchased tech stock. In the past 12 months, the company’s revenue growth has been dropping significantly and its growth is slowing down.
In terms of its cash flow statement, Meta’s free cash flow has been dropping, too. As for its income statement, Meta’s total operating expenses have reached an all-time high and have increased about 32.6% between 2020 and 2021.
Meta’s operating expenses are skyrocketing because it’s currently investing in the Metaverse. Mark Zuckerberg and Facebook’s primary focus is developing virtual reality. The company even went as far as changing its name from Facebook to Meta.
Metaverse looks promising. It also recorded a revenue increase of 50% year over year during the second quarter of this year. This area of business is growing and it could be a game changer in the future.
Fortunately, this has helped you decide whether or not you should add these stocks to your portfolio.
If you have any questions, feel free to let me know. Also, if you have other ideas or you want to add something to the list, feel free to leave a comment below.
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Recommended books for further reading:
- Intelligent Investor: The Definitive Book on Value Investing – A Book of Practical Counsel
- The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Little Books. Big Profits
- Rich Dad’s Guide to Investing: What the Rich Invest in, That the Poor and the Middle Class Do Not!
- Warren Buffett and the Interpretation of Financial Statements: The Search for the Company with a Durable Competitive Advantage
- A Beginner’s Guide to the Stock Market: Everything You Need to Start Making Money Today
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