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4 Dow Stocks Billionaire Money Managers Can’t Stop Buying


Whether you’re an everyday investor or a professional money manager who’s been putting your money to work on Wall Street for decades, last year was rough. When the finish line was reached for 2022, all three major U.S. stock indexes had delivered their worst returns in 14 years.

But there was a standout: Amid the proverbial rubble, the iconic Dow Jones Industrial Average (^DJI) stood tall with a loss of a modest 9% in 2022. That compares to the 33% decline the growth-focused Nasdaq Composite endured.

A professional stock trader using a smartphone and stylus to analyze a stock chart displayed on a computer monitor.

Image source: Getty Images.

The Dow Jones consists of 30 generally profitable, time-tested, and multinational businesses. In other words, these mature companies are industry leaders that money managers have been counting on for decades to help their funds build wealth. The Dow’s 30 components can also be a smart place to turn during periods of heightened uncertainty, such as a bear market.

Based on 13F filings with the Securities and Exchange Commission (SEC) in mid-November, it’s abundantly clear that many of Wall Street’s most successful billionaire investors want to own stocks in the Dow Jones Industrial Average. What follows are four Dow stocks billionaire money managers simply can’t stop buying.

Visa

The first Dow Jones Industrial Average stock successful billionaire investors can’t seem to get enough of is payment processor Visa (V -0.13%). Billionaire Ole Andreas Halvorsen of Viking Global Investors more than doubled his fund’s stake by purchasing 2.79 million shares of Visa during the third quarter. Ray Dalio’s Bridgewater Associates followed suit with a purchase of more than 725,000 shares of Visa stock.

The beauty of Visa’s operating model is threefold. First, it’s able to take advantage of disproportionately long periods of economic expansion. Even though Visa is cyclical, recessions tend to be short lived. As U.S. and global gross domestic product climb over time, so does Visa’s profit potential.

Secondly, Visa finds itself with sustained growth opportunities in developed and emerging markets. Visa holds nearly a 53% share of credit card network purchase volume in the U.S. (the No. 1 market for global consumption), and it was the only one of the major four payment networks to significantly expand its share following the Great Recession (2007-2009).  Meanwhile, it likely has a multidecade runway to organically or acquisitively expand into underbanked emerging markets with its smart payment technology.

Third, management’s fiscal discipline kept Visa away from lending. Though acting as both a payment processor and lender could allow Visa to double-dip during the good times, it would eventually expose the company to loan losses during inevitable recessions. By sticking to payment processing and avoiding lending, Visa has positioned itself to bounce back as quickly as possible from downturns.

Chevron

Billionaire money managers have also been pretty excited about the prospects of energy stock Chevron (CVX 0.09%). Warren Buffett’s Berkshire Hathaway and Israel Englander’s Millennium Management respectively gobbled up 3.92 million shares and 3.9 million shares of the integrated oil and gas giant in the September-ended quarter.

Chevron offers investors a way to take advantage of above-average crude oil and natural gas prices. Even before Russia invaded Ukraine and threw a gigantic monkey wrench into Europe’s energy needs, the global energy supply chain was struggling because of the COVID-19 pandemic. Energy companies were forced to pare back their capital expenditures for years, which has made boosting supply difficult for many drillers. In other words, it’s created a recipe for sustainably higher crude oil and natural gas prices.

Chevron brings the safety of its integrated operating model to the table as well. While its upstream drilling assets generate the highest operating margins, Chevron also owns transmission pipelines, chemical plants, and refineries. These are assets that can provide predictable operating cash flow and/or hedge against downside in the price of crude oil and/or natural gas.

Like many big oil companies, Chevron also has a mammoth capital-return program. Management pledged to repurchase up to $15 billion worth of its common stock last year. Further, the company is parsing out one of the largest nominal-dollar dividends on the planet.

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Image source: Getty Images.

Salesforce

A third Dow stock billionaire investors haven’t been able to stop buying is cloud-based customer relationship management (CRM) software solutions provider Salesforce (CRM -0.65%). The latest round of 13F filings showed that billionaire Ken Griffin of Citadel Advisors, along with Halvorsen at Viking Global Investors, respectively purchased 2.67 million shares and 2.4 million shares of Salesforce stock.

CRM…



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