Title: Three Dow Jones Stocks Seeing Billionaire Investments Galore in 2023
In the realm of savvy investors, paying attention to the right billionaires can uncover potential stock gems for improved returns. Three such billionaire kings, Chase Coleman of Tiger Global Management, Andreas Halvorsen of Viking Global Investors, and Bill Ackman of Pershing Square, have amassed fortunes by excelling at picking winning stocks.
All three share a long-term vision when it comes to investing, and they've identified some key performers in the Dow Jones Industrial Average (^DJI 0.25%). Let's dive into three top stocks they've been pouring their wealth into:
1. Amazon
Chase Coleman, who gained experience working under Julian Robertson, the legendary hedge fund manager, has focused his Tiger Global Management on investing in long-term, growth-oriented companies that leverage tech innovations. With a net worth estimated at a whopping $6 billion (as per Forbes), Coleman's Tiger Global has been holding onto Amazon (AMZN 0.01%) shares for over five years.
Amazon's robust financial performance, featuring balanced sales and profit growth, has been driving its shares to new highs as we move towards 2025. The company's game-changing cloud services business, Amazon Web Services (AWS), remains a significant profit driver. AWS posted a 19% year-over-year sales increase in the latest quarter, highlighting the significant opportunities in the cloud computing and AI service sectors.
Although Amazon's core e-commerce business is not growing as rapidly, it's worth noting that the sales dollar growth trails the increase in unit sales. This growing trend shows more customers opting for Amazon for essentials like health, beauty, and personal-care products.
This massive e-commerce dominance and potential in cloud services make it easy to understand why Coleman hasn't let go of his Amazon stock. As things stand, Amazon shares will likely continue delivering strong returns for long-term investors.
2. Sherwin-Williams
Now, lets focus on two investments that billionaire investment managers Jim Olsen (of Viking Global Investors) and Chase Coleman (of Tiger Global Management) made in the third quarter of last year. Sherwin-Williams (SHW 0.94%) stocks saw an influx of interests, as Ole Andreas Halvorsen tripled his stake while Chase Coleman started his new investment in the company.
Over the last 10 years, Sherwin-Williams has nearly doubled the S&P 500's return. A possible recovery from home remodeling and lower interest rates could further boost its performance in the coming years.
Despite a 1% year-over-year sales growth in the latest quarter, Sherwin-Williams outperformed its 10-year average annual growth by 7.5%. The residential paint segment, in particular, posted the fifth consecutive sales growth quarter in a weak market.
With clear demand recovery in sight if interest rates and inflation subside, Sherwin-Williams is set to make waves as a leader in paints, coatings, and related sectors across industrial and residential markets. The company's management aims to achieve 2024 adjusted earnings per share between $11.10 to $11.40, up 8.7% at the midpoint.
While the stock's forward price-to-earnings ratio of 34 appears expensive, the billionaires' belief in the company's investments likely stems from their expectations that Sherwin-Williams will strengthen its competitive moat, positioning it to reignite market share growth in the industry.
3. Nike
Bill Ackman, the founder of Pershing Square Capital Management, has had remarkable success with architecting annualized returns in excess of 15% over the last two decades, significantly outperforming the S&P 500 return of 10%. In the second quarter, Ackman scooped up Nike (NKE -1.11%) stocks for the first time, then quadrupled his stake in the third quarter.
Buying shares of struggling brands can be a lucrative move when they begin to recover. Nike shares are currently trading at their lowest in four years after a 10% sales drop year over year. Ackman's optimism stemmed from the company's renewed focus on sports, as well as its aggressive new product development plans.
New CEO Elliott Hill, an ex-Nike veteran, is poised to rejuvenate the company's fortune. With a full plate of new strategic initiatives and streamlined operations, Nike is better positioned to bounce back.
In light of the promising turnaround, the stock's price-to-sales ratio of 2.44 is its lowest in 10 years, indicating tremendous growth potential when the iconic sportswear brand starts gaining momentum once again.
Just because a billionaire has taken an interest in a stock doesn't automatically translate to monetary gains. Always remember to conduct your own thorough research before investing, and consider your own comfort level with the stock.
In addition to their long-term investments in tech-driven growth companies, both Chase Coleman and Jim Olsen recognize the potential of the finance sector. As a result, they've also been pouring their wealth into financial stocks, such as Sherwin-Williams. Coleman recently started investing in Sherwin-Williams, while Olsen tripled his stake in the third quarter of last year, recognizing its strong performance and growth prospects in the coming years.
The financial management of these billionaire investors further underscores the importance of diversifying investments to maximize returns. By mixing their portfolios with both tech-focused and financial stocks, they aim to minimize risks and maximize profit opportunities, making intelligent investments in both the tech and finance spheres of the financial market.
