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Watching the stocks billionaires are buying isn't a bad investment strategy. These people have spent years honing their craft, and though not always correct, they have a fairly consistent track record of beating the market. By following their picks, you might be able to stay ahead of where the smart money thinks the better opportunities lie.
That doesn't mean blindly buying what they buy. You still need to perform your own due diligence. But in a universe of thousands of stocks to choose from, narrowing down the list to a more manageable level by using their superior models and algorithms simplifies the selection process.
Below are three stocks that billionaire investors are loading up on. Let's see if these companies are right for your portfolio, too.
Key Points About This Article:
- Billionaire investors have made a career out of having to correctly invest their money, and while they don't always get it right, it is still a valuable exercise in watching where they are making their bets.
- With thousands of stocks on the market, following the smart money narrows down the universe, making it easier to perform your due diligence.
- If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report . It features a software stock we’re confident has 10X potential.
Modiv Industrial (MDV)
Woman adjusting industrial equipment
Modiv Industrial (NYSE:MDV) is a real estate investment trust (REIT) that focuses on single-tenant industrial manufacturing properties. It has 43 properties across 15 states representing 29 tenants. Its biggest tenant is farm and construction equipment manufacturer Lindsay ( NYSE:LNN ) that accounts for 13% of its revenue while the second-biggest tenant is a Kia (OTC:KIMTF) auto dealership in Los Angeles County accounting for 11% of the total.
While Vanguard is the largest shareholder of MDV stock , owning $4.6 million worth of stock, it hasn't bought any shares in over a year. Blackrock ( NYSE:BLK ), though, was incrementally boosting its position by 5% or more than 95,000 shares, while Jim Simons' Renaissance Technologies hedge fund increased his stake by 20% when it picked up an additional 8,000 shares, bringing his total holdings to 47,000 shares. They are worth $666,000.
Wall Street has a buy rating on Modiv Industrial with a consensus price target of $18 per share, implying 9% upside in the stock. The REIT is an attractive investment because of the patience management exhibits in making acquisitions. "We take the Buffett-esque view that, at this stage of the market cycle, we can afford to stand over the plate looking for the fat pitch without fear of strikes being called," it recently told investors .
Shares are up 20% year-to-date and with a dividend yielding 6.8% annually, adding MDV stock to your portfolio makes for a compelling growth and income position.
Lockheed-Martin (LMT)
Two F-35 Lightning II fighter jets over mountainous terrain
The world's largest defense contractor is also a stock billionaires can't stop buying. Lockheed-Martin ( NYSE:LMT ) generated $67.6 billion in annual sales last year, almost wholly from weapons systems sales to government clients, both foreign and domestic. The F-35 fighter jet is Lockheed's most important program as it represents 26% of total revenue. Its Skunk Works advanced weapons systems is among the most-secretive programs as it is where highly classified next-generation aircraft are developed.
Among Lockheed's biggest shareholders are State Street ( NYSE:STT ) and BlackRock, both of which own billions of dollars in stock, but other money managers have been scooping up shares. Israel Englander at Millennium Management recently picked up almost a half million shares to bring his holdings value up to $255 million.
While analysts have a buy rating on LMT stock, they also think it is fairly valued at current prices. Still, with a number of global hot spots raging, government stockpiles depleted, and the inexorable rise of defense spending, Lockheed-Martin is a long-term buy-and-hold stock for any portfolio.
Super Micro Computer (SMCI)
Man standing in front of bank of servers
One of last year's top-performing tech stocks has lost two-thirds of its value from its recent high. Despite that, Super Micro Computer ( NASDAQ:SMCI ) is still up 49% year-to-date, showing just how far it rose. The maker of computers, servers, networks, storage solutions, and data center workstations optimized for artificial intelligence still has plenty of room to run.
Outsized demand from data centers ensures its business will keep busy, undoubtedly attracting billionaire investors. Trading firm Jane Street Group nearly tripled its position in Super Micro, growing its stake to 826,000 shares worth $679 million. Englander also picked up over half a million shares, putting him as the fifth largest owner of the stock at $510 million.
Although Wall Street has a hold rating on SMCI stock, analysts also have a consensus price target of $790 per share, which implies a near-doubling in value. They also expect Super Micro to grow earnings 60% annually long-term, suggesting there is substantial growth potential inherent in its shares.
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