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US superinvestors – highest conviction stocks in 2023

We look at the investment portfolios of Warren Buffett, Bill Ackman, and Ray Dalio, and dig into some of their biggest holdings.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

This article is more than 6 months old

It was correct at the time of publishing. Our views and any references to tax, investment and pension rules may have changed since then.

The US not only boasts some of the biggest companies in the world but also some of the most high-profile investors.

We look at 3 industry titans and dig into some of their biggest holdings.

This article isn’t personal advice. If you’re not sure an investment is right for you, seek advice. Investments and any income from them will rise and fall in value, so you could get back less than you invest. Past performance is not a guide to the future. Ratios shouldn’t be looked at on their own.

Investing in an individual company isn’t right for everyone because if that company fails, you could lose your whole investment. If you cannot afford this, investing in a single company might not be right for you. You should make sure you understand the companies you’re investing in and their specific risks. You should also make sure any shares you own are part of a diversified portfolio.

Remember, before you can trade US shares, you need to complete and return a W-8BEN form.

Warren Buffett – Apple

Buffett manages his investments through his holding company, Berkshire Hathaway, and his biggest investment needs no introduction. Apple, accounting for nearly 40% of Berkshire’s equity portfolio at the last count.

Back in 2016, eyebrows were initially raised when Buffett began building his stake in Apple. But it was timeless business principles that attracted Buffett to the tech giant. Strong brand power, healthy cash flows, and a management team laser-focused on what consumers want – these qualities rarely go out of fashion with investors.

The Apple ecosystem of products and services is purpose-built to complement and work together seamlessly. And as far as we’re concerned, they keep hitting the nail on the head.

The truth is, Apple’s made itself an indispensable part of many people’s everyday lives – evidenced by the extreme brand loyalty consumers show when it’s time to upgrade their phone. In fact, the iPhone had a record quarter, making up 54% of the company’s $94.8bn revenue.

Strong cash flows help to fund the mammoth share buyback program, with another $90bn worth recently being announced. Since 2016, Apple’s returned more than $488bn to shareholders in the form of buybacks alone.

Learn the difference between Dividends and Buybacks

Apple's Share Buybacks

Source: Apple annual reports

But there are some challenges to keep in mind.

A big proportion of Apple’s products are made in China, exposing it to supply chain challenges. A slew of Chinese lockdowns and rising China-US tensions have already disrupted its production there. While the wheels are currently in motion to move some production away from China, it will take both time and money to do so.

Added to that, Apple’s got to continually stir-up demand through frequent and successful product launches – and at a price point that consumers can stomach. Even with the brand power of Apple, that could become more difficult if cost-of-living pressures continue to mount.

We don’t doubt Apple’s ability to deliver, but those strengths are well priced in and its valuation sits comfortably ahead of the long-term average.



Bill Ackman – Lowe’s Companies

Bill Ackman is the founder and CEO of Pershing Square Capital Management, a hedge fund with more than $15.2bn of assets under management.

At nearly 20% of the investment portfolio, Ackman’s largest holding is Lowe’s Companies – a US-listed home improvement and hardware chain. With more than 1,700 stores across the US, Lowe’s offers almost everything you’d need to fix up or redecorate your home.

Like-for-like first-quarter sales fell 4.3% to $22.3bn. That’s not a huge surprise. Some pullback was to be expected as the post-pandemic boom of DIY sales normalised, and lumber prices fell.

Around two-thirds of Lowe’s revenue comes from non-deferrable repair and maintenance work, which should remain relatively unaffected if wider economic conditions get worse. Upgrading your phone can wait but fixing a leaky ceiling can’t.

Operating margin shows how much revenue is being converted into profit, before paying things like interest and tax. It’s a useful measure of how efficiently a company’s being run.

In Lowe’s case, the operating margin improved from 14.0% to 14.7%, which shows the group’s running an even tighter ship than last year. This higher margin meant that despite the dip in first-quarter revenue, operating profit stayed flat at $3.3bn.

Lowe's operating margin

Source: Lowe’s Companies’ financial statements

Despite a strong showing, there are challenges for Lowe’s to wrestle with.

Good customer service plays a big part in gaining repeat business, especially in the home improvement game. With so many products to choose from, Lowe’s customers often want help finding the most suitable option – having knowledgeable staff on hand to help is key.

Attracting enough staff isn’t easy in today’s market, especially with low unemployment. To help, Lowe’s is set to hike wages, but this will likely add some downward pressure to the recently improved margins.

The group’s currently trading at a valuation of 15.4 times next year’s earnings – below its long-term average and comfortably below its direct competitor, Home Depot. That looks like an attractive valuation to us, but keep in mind, competition between the two titans is likely to remain fierce.



Ray Dalio – Procter & Gamble

In 1975, Ray Dalio founded one of the world’s largest hedge funds, Bridgewater Associates. Over the years, he served in several roles from CEO, Chairman and Co-Chief Investment Officer. Despite having stepped back from day-to-day duties last year, his influence very much remains.

With Dalio at the helm, Bridgewater built its stake in Procter & Gamble into the group’s largest single company holding, 4.5% of the total equity portfolio.

Procter & Gamble may not be a household name in the UK, but some of its products are. Household and personal lines make up the core of its portfolio, boasting brands like Gillette, Oral-B and Head & Shoulders.

This may seem like a pretty simple way to think about an investment but, consumer staples tend to hold up well during tough times – after all, you don’t stop washing your hair or brushing your teeth during a recession.

So, there’s an underlying demand that’s pretty solid, and on top of that, you can add brand power – that combination is a potent mix. And history’s proved this, with Procter boasting 67 years of consecutive dividend increases. It should be remembered though that dividends are variable and not guaranteed and this may not continue into the future.

Procter & Gamble's dividend per share

Source: Refinitiv Eikon Datastream 19.06.23

Cutting to the chase, there’s nothing here that’s going to shoot the lights out. Sales are expected to grow in the low single digits for the next few years, with a slightly better operating profit outlook if costs ease off. But sometimes that’s exactly what you want, steady performance and strong operating metrics.

Of course, there’s no guarantee things will continue that way, and the current environment certainly offers up challenges. Not least of which is how to deal with inflation without taking a big hit to volumes.

In recent results, management called out the tricky cost environment, and we saw 7% price hikes pushed through to help keep it at bay. Results were relatively strong, though there was a wobble in volumes, which fell 3%.

Performance was still good enough for full-year guidance to get a bump higher, perhaps a small sign that some of the challenges may be starting to ease – time will tell.


Unless otherwise stated, estimates, are a consensus of analyst forecasts provided by Refinitiv. These estimates aren’t a reliable indicator of future performance. Investments rise and fall in value so investors could make a loss.

This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication. Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing. Please see our full non-independent research disclosure for more information.

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    This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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