Every quarter, I take a close look at 13F regulatory filings. These filings – which large investment managers that own US stocks are required to complete – allow me to find out what shares the world’s best stock market investors have been buying recently.
Here, I’m going to highlight three shares that big-name money managers were buying in the third quarter of 2023. I’ll also provide my take on each.
Amazon
First up, we have Amazon (NASDAQ: AMZN).
This stock was bought heavily by several big names in the investment world during Q3, including billionaire hedge fund manager David Tepper, who runs Appaloosa Management, and Brad Gerstner of Altimeter Capital.
It’s worth noting that Gerstner – who’s generally considered to be one of the world’s best tech investors – more than tripled his holding in the e-commerce/cloud computing powerhouse.
I like the look of Amazon at current levels. It’s quite expensive (which adds risk). Currently, its forward-looking price-to-earnings (P/E) ratio is about 40.
Yet with the company having cut costs in recent years, its profits are now rising rapidly. Next year, for example, net profit is forecast to rise about 36%.
Meanwhile, its top line is still growing at a healthy clip, thanks to solid growth in both its e-commerce and cloud businesses.
Given the top- and bottom-line growth, I think the stock can continue to rise from here.
Marriott International
Up next is hotel group Marriott International (NASDAQ: MAR), which owns some of the world’s most popular hotel brands including Marriott, Sheraton, and W Hotels.
This stock was bought by UK fund manager Terry Smith, who runs the popular Fundsmith Equity. 13F filings show that in Q3, he snapped up around 4.2m shares, which probably cost him somewhere around $800m.
I can see why Smith likes this stock. Right now, the travel industry is booming and hotel companies are doing really well.
Marriott, for example, just posted net income of $752m for Q3, up 19% year on year.
And the longer-term prospects look good too. In the long run, the travel industry looks set to benefit from a number of powerful trends including rising global wealth and the retirement of Baby Boomers.
Of course, a downturn in consumer spending presents a risk in the near term.
I like the long-term growth story though.
I’ll point out that I’ve recently been buying shares in rival InterContinental Hotels, which is listed on the London Stock Exchange.
Alphabet
Finally, we have Alphabet (NASDAQ: GOOG), the owner of Google and YouTube.
This was snapped up by billionaire hedge fund manager Bill Ackman, who runs Pershing Square Capital Management (and has an investment trust in the FTSE 100) and several other top hedge fund managers, including David Tepper and Stanley Druckenmiller.
Alphabet is another tech stock I’m bullish on (it’s my second-largest holding).
This is a company that operates in a range of fast-growing industries including digital advertising, cloud computing, streaming, self-driving cars, and more.
So, it looks poised to generate solid growth in the years ahead.
Meanwhile, its valuation seems very reasonable.
Currently, the forward-looking P/E ratio is only a little above 20.
Of course, the big risk here is Microsoft’s move into search.
I think Alphabet has what it takes to remain a leader in this space, however.
