The idea goes that success generates success. Many investors interpret that adage to suggest that they should follow successful investors' investments. If you don't get the same return as those others, you may be able to ride their coattails to make some good gains.
Fortunately for those wishing to invest like billionaires, many of the world's top investors must publish their purchases and sales quarterly. Three Motley Fool authors looked for prominent investors' reported transactions to determine what market-moving money managers are buying. They found wealthy investors buying Nvidia, Starbucks, and Learn why and decide if following those investors' leads might help you develop money.
The Magnificent Seven stock is hot right now. Nvidia's Eric Volkman: Ray Dalio's Bridgewater Associates is clearly invested in AI's future. Bridgewater's more than quintupling of its investment in Nvidia, a Magnificent Seven stock related with AI, sends that message.
Many data centers employ Nvidia GPUs to power AI. The hurry to build these features has boosted demand for all kinds of technology to enable them, and Nvidia GPUs are leading the way. It's no surprise the company's recent quarterly results were strong. Is tripling revenue year-over-year impressive? That pales in comparison to Nvidia's 265% fourth-quarter top line growth and roughly 500% non-GAAP (adjusted) net income increase.
AI has a long runway and can be used to various processes and systems, creating many revenue streams. Nvidia's products will likely drive additional blowout quarters if they remain central.
One major issue with Nvidia is that practically every investor wants the company in their portfolio. Despite its stellar recent fundamentals, the company is expensively valued, therefore its exponential share price growth may be over.
More than a shock Starbucks' Jason Hall: In recent SEC form 13-F filings, I found something unusual for Starbucks: In their latest quarter, D.E. Shaw and Renaissance Technologies, two of the most successful quantitative trading firms, bought shares. For those unfamiliar, David Shaw and Jim Simons, the founders of the former and latter, are worth about $40 billion combined. Their firms are the most successful quantitative trading funds
Shaw and Renaissance make most of their money immediately. They use data and high-speed trading to wager on many equities. D.E. Shaw added 1,607 stocks, opened approximately 594, and sold 535 last quarter. One quarter has over 2,700 stocks.
Shaw and Renaissance didn't disclose when they bought, held, or sold Starbucks shares. We know they both owned some at quarter's end. With shares of the global coffee giant down over 6% since the fourth quarter of 2023 and 20% off the high, these corporations may have a short-term profit potential.
That's their game. We can't win with individual investors. Starbucks is attractive long-term. Comps in China are up 10%, and same-store growth in the U.S. is 5%. Also this year, management expects 15%-20% EPS growth. With growth, a price below 23 times earnings, and a dividend yield of 2.5%, long-term investors can profit from Starbucks.
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