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The top 10 rankings are always an interesting conversation – whether it’s a list of the best presidents, colleges, athletes, etc.
Morningstar, a premium investment research firm, has compiled a Top ten list This can be very beneficial for investors.
The list consists of 10 stocks that were recently purchased by 11 top mutual fund managers, as selected by Morningstar.
The funds are:
- Diamond Hill is of great size (DHLX)
- Dodge and Cox Stock (Dodgex)
- JP Morgan Equity Income (OIEJX)
- Growth of Loomis Sayles (LSGRX)
- MFS value (Megex)
- Morgan Stanley growth (msiqx)
- Oakmark (OKMEX)
- Parnassus Basic Stock (Perplex)
- Master blue chips (PGBC) . Raw Price All Cap
- Opportunities (Prox)
- Vanguard earnings growth (fdigx) .
All of these funds are actively managed, and are large-cap funds. At least one share class from each fund has received a top Morningstar rating of Gold. Oh, and all the funds contain 100 shares or less.
To choose stocks for its list, Morningstar compared the 11 funds’ most recent portfolios with their portfolios three months ago to see which stocks the funds are buying.
Morningstar’s list of the 10 best stock funds to buy
The ten stocks include:
No. 1: Tesla (TSLA) The king of electric cars. Morningstar Moat Rating (Lasting Competitive Advantage): Narrow. Morningstar fair value estimate: $200. Thursday price: $181.
The company has suffered numerous problems this year, from declining revenues and deliveries to the judicial rejection of CEO Elon Musk’s compensation package.
RELATED: Cathie Wood unveils surprise target for Tesla stock price
But Morningstar analyst Steve Goldstein is optimistic. “Tesla aims to adjust its investment capital expenditures and operating expenses to accommodate a period of slowing revenue, earnings, and free cash flow growth over the next two years,” Goldstein wrote in a commentary.
Tesla.com
He sees some good news in the future. “We believe the recent price cuts, refreshed Model 3, and improved production at the Austin and Berlin plants should generate better sales through the rest of 2024.”
Cathie Wood’s Ark Investment Management is more enthusiastic about Tesla. It expects the stock price to be $2,600 in 2029.
Ark analysts are excited about Tesla’s robotaxi plans. Musk has focused the company on this sector amid declining car sales, and said that automated taxis will be unveiled in August.
“Nearly 90% of Tesla’s value and profits will be attributed to the robotaxi business in 2029,” Ark analysts wrote in a commentary.
Number 2: Broadcom (Afgo) , a semiconductor giant. Morningstar Moat Rating: Wide. Morningstar fair value estimate: $1,550. Thursday quote: $1,736.
Related: Analysts fix Broadcom stock price targets after earnings
Artificial intelligence is at the forefront of this company. Morningstar analyst William Kerwin raised his fair value estimates following Broadcom’s earnings report on June 12. This came as he raised his forecast for “medium-term” growth for the company’s AI revenue.
More from Wall Street analysts:
- Analyst updates price target for Oracle stock price after earnings
- Analyst reruns price target for Trade Desk stock price after Netflix deal
- Analysts adjust price targets for Micron stock ahead of earnings
“AI chip sales exceeded our expectations, and management raised its full-year guidance for AI and overall company revenue,” Kerwin said. “However, we view the new AI guidance for FY2024 as conservative and representative of a more bullish model.”
Fund managers such as Boeing and Starbucks
Number 3: Boeing (Bachelor’s) , The beleaguered aircraft maker. Morningstar Moat Rating: Wide. Morningstar’s fair value estimate: $221. Thursday price: $176.
Crashes, air accidents and faulty aircraft have blighted the company over the past few years, with problems constantly cropping up.
RELATED: New Boeing whistleblower claims company lost faulty plane parts
But “Boeing can re-establish its position, although some execution and supply risks remain,” Morningstar analyst Nicholas Owens wrote.
“Their narrow-body aircraft are ideal for short, high-frequency flights, while the wide-body aircraft are used for long-haul and intercontinental flights.”
No. 4: Starbucks (Sex) Giant coffee chain. Morningstar Moat Rating: Wide. Morningstar fair value estimate: $96. Thursday price: $80.
RELATED: Former Starbucks CEO Offers Candid Advice for the Coffee Giant
The stock is down 16% year to date amid labor strife at the company, service issues at Starbucks stores, and inflation that has dented customer spending.
“Starbucks’ immediate prospects look cloudy, but its long-term trajectory is enviable,” Morningstar analyst Sean Dunlop wrote.
He said the company’s near-term priorities are “prudent.” They include investing in the in-store employee experience, overhauling stores to better meet the needs of the growing off-premises consumer, and emphasizing a consistent customer experience across all platforms.
The remaining stocks purchased by large funds include:
no 5: Delta Airlines (D) .
No. 6: Derry (to) Agricultural equipment company.
number 7: Charter Communications (CHTR) cable television carrier.
number 8: Real estate income (Hey) a retail real estate (REIT) company.
number 9: Service now (now) a software company.
No. 10: Kenvue KVUE, a health products company.
RELATED: Veteran Fund Manager Picks Favorite Stocks for 2024
The author owns shares in Starbucks and Realty Income.
