There’s no foolproof method for making money in the stock market, and, in my view, no one should rely on any one technique for picking stocks. After all, using multiple criteria — including analyzing fundamentals, checking charts, and identifying macro trends — should increase one’s chances of success. One method that I will often use is tracking which stocks the big money is buying.
As Kiplinger recently pointed out, “billionaires… have larger-than-life reputations when it comes to investing other rich people’s money,” and have “intimate connections to insiders,” along with the funds to facilitate intensive research. While billionaires do make mistakes (they’re human, after all), it’s still interesting to see which stocks the big money is buying, including:
Institutional investors bought 61.32 million shares of Rivian (NASDAQ:RIVN) last quarter, while selling only 34.13 million shares of the automaker. Additionally, institutions that purchased the name for the first time acquired 11.5 million shares. Also noteworthy is that George Soros, the renowned, billionaire investor, increased his stake in RIVN stock last quarter to 4.19 million shares from 3.58 million shares. And the Healthcare of Ontario Pension Plan last quarter bought 568, 625 shares of RIVN stock.
Another reason to be bullish on RIVN was a note earlier this month from Japanese investment bank Mizuho which raised its price target on the shares to $32, saying that the firm is “executing well” and has a much more attractive valuation than Tesla (NASDAQ:TSLA) and Lucid (NASDAQ:LCID).
A second investment bank, Needham, recently reiterated a “buy” rating on the shares.
Last quarter, institutions acquired 91.666 million shares of Nvidia (NASDAQ:NVDA) and unloaded only 76.4 million of its shares, showing that it’s definitely one of the stocks the Big Money is buying.
JPMorgan (NYSE:JPM) purchased 5.48 million shares of the chip maker, while Morgan Stanley (NYSE:MS) acquired 6.189 million units and Norges Bank, Norway’s state-owned bank, added 2.265 million shares.
Multiple investment banks were very upbeat on NVDA stock in the wake of its Q2 results, with Wedbush’s Dan Ives calling its “guidance and commentary” a “drop the mic event” and comparing the company to superstar sports figures. And Rosenblatt Securities responded to the results by hiking its price target on the name to $1,100, the most elevated level on Wall Street.
Last quarter, institutions acquired 70.8 million shares of Tesla stock and got rid of just under 50 million shares. State Street (NYSE:STT), a major U.S. bank, obtained 4.4 million shares, while Norges, Norway’s state-owned bank, obtained 3.36 million units and Morgan Stanley (NYSE:MS)weighed in with a huge purchase of 5.86 million shares.
Also noteworthy were Goldman Sachs’ (NYSE:GS) acquisition of 3.2 million shares and a purchase of 1.38 million units by Barclays, a major British bank.
In an Aug. 24 article, Barron’s pointed out that Tesla is now significantly more expansive, on a price-earnings ratio basis, than Nvidia. According to the publication, the automaker is changing hands for 50 times analysts’ average 2024 earnings per share estimate, while Nvidia’s equivalent ratio is around 30 times. TSLA stock has zoomed 87% higher so far in 2023, but it’s still down 22% over the last 12 months.
Schrodinger (NASDAQ:SDGR) uses a combination of artificial intelligence and physics to speed up the drug discovery process and make it more efficient. In Q2, over 14 million shares of the stock were acquired by institutions, while they sold only 6.25 million shares. BlackRock (NYSE:BLK) bought 4.57 million shares of the stock, while Vanguard obtained 1.4875 million more shares and State Street purchased 803, 310 additional units.
Also noteworthy is that the Bill and Melinda Gates Foundation held onto all of its 6.98 million shares of SDGR last quarter.
Impressively, SDGR has 1,750 customers globally and is working with most of the world’s largest pharmaceutical companies, while it has a large pipeline consisting of 13 drugs on which it’s collaborating with other companies and 19 of its own “active programs.”
General Electric (GE)
In Q2, institutions bought 55.5 million shares of General Electric (NYSE:GE) and sold 52.6 million shares of the name.
BlackRock acquired a huge 2.97 million shares of GE, while State Street added 1.7 million shares and TCI Fund Management weighed in with a huge purchase of 15.5 million shares. TCI Fund Management was founded by Christopher Hohn, a British multi-billionaire with an estimated net worth of $6.7 billion. Additionally, multi-billionaire Stan Druckenmiller bought GE stock for the first time, snapping up 736,000 shares.
In Q2, the conglomerate’s revenue soared 18% versus the same period a year earlier, while its orders jumped a very impressive 59% year-over-year.
Institutions acquired 159.5 million shares of Microsoft (NASDAQ:MSFT) stock last quarter, while selling 151.67 shares of the name.
Vanguard bought 3.7 million shares, while State Street obtained 1.5 million units. Most impressive, however, were purchases by JPMorgan and and Norges Bank, which obtained 18.4 million shares and 6 million shares, respectively. On Aug. 23, Wells Fargo identified MSFT as one of ten “megacap” stocks that could be poised for a “break out” by the end of this year.
In Q2, institutions bought 62.86 million shares of online sports betting platform DraftKings, (NASDAQ:DKNG), while they sold 43.56 million shares of the name.
BlackRock bought 2.3 million shares, while investment bank D.E. Shaw obtained 2.6 million shares and Invesco weighed in with its acquisition of 2.88 million shares. Also noteworthy is that Whale Rock, an investment advisor owned by billionaire Alex Sacerdote, bought 8.12 million shares of DKNG. On Aug. 8, investment bank Truist upgraded DKNG stock to “buy,” saying that the company “may be the best top-line story in gaming today,”
On the date of publication, Larry Ramer was long SDGR, RIVN, and GE. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.