In this piece, we will take a look at the 10 large stocks by market capitalization to buy according to Claes Fornell's CSat Investment. If you want to skip ahead to the top five stocks in this list, then head on over to 5 Large-Cap Stocks to Buy According to Claes Fornell's CSat Investment.
Csat Investment Advisory LP is an American investment firm based in Michigan. It is headed by Dr. Claes Fornell, who is known for his unique approach to investment. Dr. Fornell has decades of research experience and he is one of the more unique hedge fund investors out there who use this prowess to invest in the stock market.
His investment firm, which conducts its business as ACSI Funds with the ticker BATS:ASCI, sifts out the companies to invest in by favoring firms that top customer satisfaction surveys. This approach also falls in line with Dr. Fornell's research history, since he has spent his academic time developing methods to achieve high returns alongside lower risk. ASCI Funds uses a technology that is proprietary to Dr. Fornell, and he holds a patent for it in the United States. This technology is now used as an economic indicator, which uses three metrics (satisfaction, expectations, and idealism) to generate a score for each company.
As of the third quarter of this year, CSat Investment's portfolio was worth $119 million, showing little changes in value over the previous quarter. It invests in hundreds of firms out there, and its three largest investments are in Cupertino, California technology giant Apple Inc. (NASDAQ:AAPL), search engine provider Alphabet Inc. (NASDAQ:GOOG), and Southwest Airlines Co. (NYSE:LUV). Cumulatively, the trio represents roughly 11% of the firm's total portfolio.
To pick out the top ten investments of CSat Investment, we took a look at the investment firm's portfolio for Q3 2021 and then determined the market capitalization of the companies. This enabled us to identify the firms with the largest market value. Once this was done, we analyzed the companies by looking at their quarterly reports, analyst ratings, investor letters, and hedge fund sentiment through a poll of 867 hedge funds conducted by Insider Monkey for the third quarter of this year.
With this context in mind, let's now take a look at our list of the 10 large stocks by market capitalization to buy according to Claes Fornell's CSat Investment.
10 Large-Cap Stocks to Buy According to Claes Fornell's CSat Investment
10. Cisco Systems, Inc. (NASDAQ:CSCO)
CSat Investment’s Stake Value: $936,000
Percentage of CSat Investment's 13F Portfolio: 0.78%
Number of Hedge Fund Holders: 63
Market Capitalization as of 12/3/21: $237 billion
Cisco Systems, Inc. (NASDAQ:CSCO) is an American manufacturer of networking equipment that provides several devices to enable its customers to connect with each other and to the Internet. Among the equipment that it provides are WiFi routers, ethernet switches, and network security products.
Dr. Fornell's investment firm owned 18,102 Cisco Systems, Inc. (NASDAQ:CSCO) shares as of the third quarter of this year. This stake was worth $936,000 and it represented 0.78% of the investment firm's portfolio. Similarly, during the same time period, 63 of the 867 hedge funds polled by Insider Monkey held the networking and security firm's shares.
For its first fiscal quarter, Cisco Systems, Inc. (NASDAQ:CSCO) brought in $12.9 billion in revenue and $0.82 in non-GAAP EPS, in a mixed bag performance which saw it miss revenue and beat EPS analyst estimates. Morgan Stanley maintained a $59 price target for the company in October 2021.
As of market close on Friday, December 3, 2021, Cisco Systems, Inc. (NASDAQ:CSCO) had a market capitalization of $237 billion. The company's largest investor is Ken Fisher's Fisher Asset Management who owns 22.8 million shares worth $1.2 billion.
“Also in IT, we added Cisco Systems, which provides IT and networking services in the form of network security, software development and cloud computing. Cisco continues to derive over 50% of its sales from on-premise deployments of its products of enterprise and small and midsize customers, while recurring revenues from software are becoming a larger part of the mix. Return-to-office enterprise spending should offer upside to its core campus business. Cisco was an early technology leader in sustainability over two decades ago, through its Internet-connecting capabilities which supported live concerts in partnership with the United Nations Development Program to raise awareness and funds to fight poverty. Cisco has very strong environmental standards (including driving lower energy consumption in IT departments through new product innovations and a longstanding goal to reduce emissions and reliance on non-renewable energy sources). Its data privacy and supply chain management policies are best in class.”
Cisco Systems, Inc. (NASDAQ:CSCO) joins Alphabet Inc. (NASDAQ:GOOG), Apple Inc. (NASDAQ:AAPL), and Southwest Airlines Co. (NYSE:LUV) in the list of Mr. Fornell's top stocks.
9. Oracle Corporation (NYSE:ORCL)
CSat Investment’s Stake Value: $935,000
Percentage of CSat Investment's 13F Portfolio: 0.78%
Number of Hedge Fund Holders: 56
Market Capitalization as of 12/3/21: $241 billion
Oracle Corporation (NYSE:ORCL) is an American software firm that provides products for both enterprises and consumers. It offers an internet browser, a cloud computing platform, data warehousing, and transaction processing services among others.
As Q3 2021 came to an end, Dr. Fornell's CSat Investment owned a stake of $935,000 in Oracle Corporation (NYSE:ORCL) via 13,330 shares. The stake represented 0.78% of its portfolio. A Q3 2021 Insider Monkey survey found out that 56 of 867 hedge funds owned Oracle Corporation (NYSE:ORCL) shares.
Oracle Corporation (NYSE:ORCL)'s largest investor is Jean-Marie Eveillard's First Eagle Investment Management who owns 26 million shares that are worth $2.2 billion. As of 3rd December 2021, the company has a market capitalization of $241 billion.
For its Q1, Oracle Corporation (NYSE:ORCL) brought in $9.7 billion in revenue and $1.03 in non-GAAP EPS, allowing it to beat analyst estimates for EPS only. Credit Suisse set a $110 price target for the company in November 2021, stating that it should do well in the software market.
“Leading contributors in the First Eagle Global Fund this quarter included Oracle Corporation. Oracle continues to make progress reinventing itself for the cloud-computing environment. Impressively, it has affected this turnaround primarily through organic research & development and smaller, well-priced acquisitions rather than expensive, headline-grabbing mergers. Results in recent quarters have suggested Oracle’s subscription-based model is gaining traction, and we believe the company will be a strong competitor in the huge addressable public cloud market. With a high level of insider ownership and a strong balance sheet, Oracle has been a strong cash flow generator and has historically returned excess cash to shareholders in the form of dividends and share buybacks.”
8. The Walt Disney Company (NYSE:DIS)
CSat Investment’s Stake Value: $1.9 million
Percentage of CSat Investment's 13F Portfolio: 1.66%
Number of Hedge Fund Holders: 101
Market Capitalization as of 12/3/21: $265 billion
The Walt Disney Company (NYSE:DIS) is an entertainment provider that is best known for its television studios and its theme parks. Its parks are globally renowned for their unique features and the company is an iconic American brand.
The Walt Disney Company (NYSE:DIS) brought in $18 billion in revenue and $0.37 in non-GAAP EPS for its fourth fiscal quarter, missing analyst estimates for both. Loop Capital reduced its price target to $190 from $205 in November 2021, outlining that a larger content portfolio will affect profitability but increase its subscription base.
CSat Investment owned 10,728 The Walt Disney Company (NYSE:DIS) shares during the third quarter of 2021. These were worth $1.9 million and represented 1.66% of its portfolio. 101 of the 867 hedge funds polled by Insider Monkey owned the company's shares during the same time period.
The Walt Disney Company (NYSE:DIS) market capitalization stood at $265 billion as of Friday, December 3rd, 2021.
In addition to Southwest Airlines Co. (NYSE:LUV), Alphabet Inc. (NASDAQ:GOOG) and Apple Inc. (NASDAQ:AAPL), The Walt Disney Company (NYSE:DIS) is one of the notable stocks in CSat's portfolio.
The Walt Disney Company (NYSE:DIS)'s largest investor is Ken Fisher's Fisher Asset Management, which owns 11 million shares worth $1.8 billion. It was mentioned by RiverPark Funds in a Q2 2021 investor letter which outlined that:
“DIS shares declined for the quarter, taking a pause after a big fourth quarter and first quarter stock price advance, as Disney+ subscriber numbers were disappointing to investors. Disney+, the company’s DTC streaming business, had blown past previous subscriber projections, having gone from zero to 104 million in 17 months, but investors were now expecting 109 million subscribers. Management still expects significant continued growth to 230-260 million subscribers in 2024.
DIS is blessed with a deep library of unique content that includes both live sports (providing large, non-time shifted audiences) and incomparable brands including Disney, Marvel, Pixar and Lucasfilm, as well as the ABC network. The company also has a wealth of upcoming new content, expecting over 100 original titles per year, including two new Star Wars spin-off series, 10 Star Wars films, 10 Marvel films, 15 Disney and Pixar films and 15 Disney and Pixar series.
Now that the disruption in its theme park, cruise and theatrical businesses appears to be coming to an end, we believe that Disney is among the best-positioned media companies in the new landscape to combine multi-channel and DTC distribution. We also note that DIS has an extremely strong balance sheet and a growing pool of free cash flow to be used both to return to shareholders and to invest in future opportunities.”
7. Netflix, Inc. (NASDAQ:NFLX)
CSat Investment’s Stake Value: $2.1 million
Percentage of CSat Investment's 13F Portfolio: 1.8%
Number of Hedge Fund Holders: 106
Market Capitalization as of 12/3/21: $266 billion
Netflix, Inc. (NASDAQ:NFLX) is an online television and film streaming services, provider. It offers customers content through its website, and in addition to sourcing productions from others, it has also developed its own capabilities over the years.
Mr. Fornell's investment firm held 4,141 Netflix, Inc. (NASDAQ:NFLX) shares worth $2.1 million and constituting 1.8% of its portfolio during Q3 2021. During the same time period, 106 of the 867 hedge funds polled by Insider Monkey had holdings in the streaming provider.
Netflix, Inc. (NASDAQ:NFLX) had a market capitalization of $266 billion as of December 3rd, 2021.
Keybanc raised the company's price target to $725 from $690 in November 2021, sharing its belief that the company should grow strongly when compared to its peers. Netflix, Inc. (NASDAQ:NFLX) brought in $7.4 billion in revenue and $3.19 in GAAP EPS for its Q3, beating analyst estimates for EPS.
Netflix, Inc. (NASDAQ:NFLX)'s largest shareholder is Ken Fisher's Fisher Asset Management, which owns 4 million shares worth $2.5 billion.
Ensemble Capital mentioned the company in its Q3 2021 investor letter, stating that:
“Netflix stock had a disappointing first half of 2021 performance, treading water while the S&P 500 rallied, after a very strong 67% return in 2020. It benefited from the global pandemic in 2020, signing on 36.6 million new subscribers vs the typical 25 million or so it typically does. Total subscribers exceeded 200 million, up 22% over the previous year. However, in the first half of 2021, new subscriber additions slowed substantially, totaling only 5.5 million due to slower new content additions impacted by production delays, a resumption of outdoor activity as people everywhere adjusted to living with COVID, and the impact of a “pull-forward effect” on subscriber growth in last year’s very strong results. The third quarter saw new content velocity start to pick up, which is usually what drives new subscribers to the service, with expectations of an even stronger content slate going into the final quarter of the year, causing the stock to increase 15% in the quarter.”
6. JPMorgan Chase & Co. (NYSE:JPM)
CSat Investment’s Stake Value: $1 million
Percentage of CSat Investment's 13F Portfolio: 0.88%
Number of Hedge Fund Holders: 101
Market Capitalization as of 12/3/21: $467 billion
JPMorgan Chase & Co. (NYSE:JPM) is a financial services company that offers consumer banking, wealth management, commercial banking, and investment banking services. It is one of the largest banks in the world.
During Q3 2021, CSat Investment owned 6,909 JPMorgan Chase & Co. (NYSE:JPM) shares. These were worth $1 million and made up 0.88% of its portfolio. Of the 867 hedge funds surveyed by Insider Monkey for the same time period, 101 had holdings in the bank.
JPMorgan Chase & Co. (NYSE:JPM) is a part of Mr. Fornell's favorite stocks, with others being Southwest Airlines Co. (NYSE:LUV), Alphabet Inc. (NASDAQ:GOOG), and Apple Inc. (NASDAQ:AAPL).
For its Q3, JPMorgan Chase & Co. (NYSE:JPM) raked in $29.9 billion through revenue and $3.74 through GAAP EPS, beating analyst estimates for EPS only. Its price target was raised to $210 from $200 by Wells Fargo in October 2021, which outlined that the bank has sound fundamentals.
JPMorgan Chase & Co. (NYSE:JPM) was worth $467 billion in market value as of the market close on Friday, 3rd December 2021.
JPMorgan Chase & Co. (NYSE:JPM)'s largest investor is Ken Fisher's Fisher Asset Management who owns 7 million shares worth $1.1 billion.
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Disclosure. None. 10 Large-Cap Stocks to Buy According to Claes Fornell's CSat Investment is originally published on Insider Monkey.