In this article, we will take a detailed look at the15 Best Large-Cap Stocks to Buy in 2024.For a quick overview of such stocks, read our article5 Best Large-Cap Stocks to Buy in 2024.
Large-cap stocks rose to prominence when the inflation storm began and the Federal Reserve began raising interest rates. That's because major companies with established business models and strong balance sheets can weather difficult times better than smaller companies. Earlier this month, Morgan Stanley said in a report that US stocks are pricing in a lot of good news for 2024. Goldman Sachs said valuations are no longer cheap but they are not stretched either. Goldman said in the current environment where cost of capital remains high, large-cap stocks are "better insulated" from market pressures when compared to "fragile" small-cap companies.
Citi Picks Top Large-Cap Stocks for 2024
In January 2024, Citi published its large-cap recommendations for 2024. Citi said these are buy-rated large-cap stocks that were selected through a "bottom-up fundamental methodology." Citi said it took into account several metrics while choosing these stocks including health of balance sheets, growth prospects and valuations.
For this article we scanned through Citi's list of large-cap recommendations and picked 15 stocks with the highest number of hedge fund investors. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).
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15. Rockwell Automation Inc (NYSE:ROK)
Number of Hedge Fund Investors: 34
Industrial automation company Rockwell Automation Inc (NYSE:ROK) ranks 15th in our list of the best large-cap stocks to buy. Insider Monkey's database of 910 hedge fund shows that 34 hedge funds had stakes in Rockwell Automation Inc (NYSE:ROK) as of the end of the third quarter of 2023. The biggest stake in Rockwell Automation Inc (NYSE:ROK) is owned by Ken Fisher's Fisher Asset Management which owns a $159 million stake in Rockwell Automation Inc (NYSE:ROK).
Goldman Sachs recently published a list of stocks that could gain if Republicans win the US election 2024. Rockwell Automation Inc (NYSE:ROK)made it to the list as Goldman believes the stock can gain on the back of onshore initiatives involving electrification and automation.
TimesSquare Capital U.S. Mid Cap Growth Strategy made the following comment about Rockwell Automation, Inc. (NYSE:ROK) in its Q3 2023 investor letter:
“In the Industrials sector we gravitate towards business service companies, those focused on automation & efficiency improvements, and essential infrastructure services.Rockwell Automation, Inc.(NYSE:ROK) is a new addition this quarter. They provide industrial automation and digital transformation solutions. There is secular growth stemming from a rapid push towards automated and connected manufacturing; as well as offering an offset to rising labor costs.”
14. CRH PLC (NYSE:CRH)
Number of Hedge Fund Investors: 48
Building materials company CRH PLC (NYSE:CRH) ranks 14th in our list of the best large-cap stocks to buy in 2024. Citi estimates an EPS of $4.60 for CRH PLC (NYSE:CRH) in 2024. As of the end of the third quarter of 2023, 48 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in CRH PLC (NYSE:CRH).
In December, CRH PLC (NYSE:CRH) said it completed the latest phase of its share buyback program, returning a further $1 billion of cash to shareholders.
ClearBridge International Growth EAFE Strategy stated the following regarding CRH plc (NYSE:CRH) in its fourth quarter 2023 investor letter:
“Despite these risks, our holdings in Europe and the U.K. found their footing in the fourth quarter, with eight of the top 10 individual contributors coming from these regions. Irish building materials supplierCRH plc(NYSE:CRH), which has demonstrated strong value creation through M&A and optimization of its portfolio assets over the last several quarters, rose strongly on positive sentiment after its investor day highlighted the company’s accelerating growth in the U.S.”
13. Constellation Brands, Inc. (NYSE:STZ)
Number of Hedge Fund Investors: 50
Last month, Morgan Stanley analyst Dara Mohsenian praised Constellation Brands, Inc.'s(NYSE:STZ)earnings and valuation. The analyst expects solid beer volumes in the future.
As of the end of the third quarter of 2023, 50 hedge funds had stakes in Constellation Brands, Inc. (NYSE:STZ).
12. Bank of New York Mellon Corp (NYSE:BK)
Number of Hedge Fund Investors: 51
Insider Monkey's database of 910 hedge funds shows that 51 hedge funds had stakes in Bank of New York Mellon Corp (NYSE:BK)as of the end of the third quarter. The most significant stake in Bank of New York Mellon Corp (NYSE:BK)is owned by Jean-Marie Eveillard's First Eagle Investment Management which owns a $693 million stake in Bank of New York Mellon Corp (NYSE:BK).
Last month Bank of New York Mellon Corp (NYSE:BK)posted fourth quarter results. Adjusted EPS in the period came in at $1.28, beating estimates by $0.16. Revenue jumped 9.9% year over year to $4.31 billion, beating estimates by $10 million.
11. Deere & Co (NYSE:DE)
Number of Hedge Fund Investors: 55
Deere & Co (NYSE:DE), commonly known as John Deere, makes agricultural machinery. The stock is among the top large-cap recommendations for 2024 by Citi. Deere & Co (NYSE:DE)is also liked by hedge funds since Insider Monkey's proprietary database of 910 hedge funds shows that 55 hedge funds had stakes in Deere & Co (NYSE:DE). The most significant stake in Deere & Co (NYSE:DE)is owned by Michael Larson's Bill & Melinda Gates Foundation Trust which owns a $1.5 billion stake inDeere & Co (NYSE:DE).
10. Lockheed Martin Corp (NYSE:LMT)
Number of Hedge Fund Investors: 60
With a dividend yield of 2.95%, Lockheed Martin Corp (NYSE:LMT) is a notable large-cap stock to buy in 2024. Citi expects Lockheed Martin Corp's (NYSE:LMT) EPS to come in at $26.32 in 2024.
As of the end of the third quarter of 2023, 60 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Lockheed Martin Corp (NYSE:LMT). The biggest stake in Lockheed Martin Corp (NYSE:LMT)is owned by John Overdeck and David Siegel's Two Sigma Advisors which owns a $366 million stake in Lockheed Martin Corp (NYSE:LMT).
RiverPark Advisors made the following comment about Lockheed Martin Corporation (NYSE:LMT) in its Q3 2023 investor letter:
“Lockheed Martin Corporation(NYSE:LMT): LMT is the world’s largest aerospace and defense contractor. With about 70% of its $66 billion in revenue from the U.S. government, the company is well positioned to benefit from U.S. defense budget growth, historically 5%-6% per year, as well as increased global military spending. With a $158 billion backlog and almost 30% of its revenue coming from building F-35 aircraft with deliveries forecast to reach 180 per year (up from 141 in 2022) in the coming years, we believe the company could grow at a higher rate than overall defense budget growth and Street expectations over the next several years. Further, strategic acquisitions, debt repayment, a 2.9% dividend yield, and continued share buybacks from more than $6 billion per year of free cash flow should lead to even greater shareholder returns. We re-initiated a small position in August.”
9. Schlumberger NV (NYSE:SLB)
Number of Hedge Fund Investors: 65
Oilfield services company Schlumberger NV (NYSE:SLB) last month reaffirmed its full-year 2024 guidance and said it expects "significant growth for 2024" in Saudi Arabia despite the country's recent orders to Aramco that indicated a planned reduction in oil production.
Citi expects Schlumberger NV's(NYSE:SLB)EPS in 2024 to total $3.61.
Alger Spectra Fund made the following comment about Schlumberger Limited (NYSE:SLB) in its Q3 2023 investor letter:
“Schlumberger Limited(NYSE:SLB) provides technology for reservoir characterization, drilling, production, and processing to the oil and gas industry. During the period, shares contributed to performance driven in large part by higher oil prices and strong fiscal second quarter earnings results. Within its quarterly report. the company highlighted growing momentum in international offshore markets that reflected market share gains as well as solid end market activity, leading to strong profit margins and healthy free cash flow generation, in our view.”
8. HCA Healthcare Inc (NYSE:HCA)
Number of Hedge Fund Investors: 71
Citi believes HCA Healthcare Inc (NYSE:HCA) is one of the top large-cap stocks to own in 2024. Citi expects HCA Healthcare Inc (NYSE:HCA)'s EPS in 2024 to come in at $19.29.
Out of the 910 hedge funds tracked by Insider Monkey, 71 hedge funds had stakes in HCA Healthcare Inc (NYSE:HCA).
Diamond Hill Large Cap Strategy made the following comment about HCA Healthcare, Inc. (NYSE:HCA) in its Q3 2023 investor letter:
“Health care facilities operatorHCA Healthcare, Inc. (NYSE:HCA) and medical device company Abbott Laboratories were also among our bottom contributors. Despite solid fundamental performance, HCA Healthcare experienced some share price weakness during Q3. This appears to be more a result of short-term noise and sell-side expectations rather than any significant operational or financial issues.”
7. Intuitive Surgical, Inc. (NASDAQ:ISRG)
Number of Hedge Fund Investors: 78
Intuitive Surgical, Inc. (NASDAQ:ISRG)is making waves after posting strong Q3 results and giving updates on its da Vinci 5 surgical robot. During its Q3 earnings call, Intuitive Surgical, Inc. (NASDAQ:ISRG)talked about da Vinci 5:
"As we look to 2024, I’d like to share with you that we have submitted to FDA our 510(k) application for our next generation multiport platform, da Vinci 5. Our design priorities for our new platforms are as follows. First, we look for opportunities to bring better minimally invasive care to more patients. Second, we work to improve the performance of our platforms and existing procedures. Third, we seek to improve care team satisfaction through product utility, dependability, and usability improvements.
And finally, we strive to help lower the total cost to treat per patient episode. Once cleared, we believe da Vinci 5 will make a positive impact on each of these objectives through hundreds of design changes that respond to surgeon and care team inputs and fulfill our design priorities. As just one example, da Vinci 5 possesses four orders of magnitude greater processing power than our Generation 4 products. That means 10,000 times the processing power to gather data, improve sensing, and deliver better digital and analytic performance. Given the sophistication of the technologies involved, we plan a phased launch in the first several quarters after clearance, giving us time to mature our supply and manufacturing processes for the new system.
da Vinci 5 will join our existing robotic surgical system portfolio alongside multiport systems X and Xi and single port system SP, offering surgeons and hospitals their choice of highly capable proven solutions from Intuitive. We have been in communication with FDA on da Vinci 5 for the past several quarters and have completed a comprehensive multi-center IDE trial. This trial finished accruing patients in May of 2023 and we submitted for our 510(k) to FDA for da Vinci 5 in August last year. We are currently responding to FDA’s questions."
Read the entire earnings call transcript here.
Baron Health Care Fund stated the following regarding Intuitive Surgical, Inc. (NASDAQ:ISRG) in its fourth quarter 2023 investor letter:
“Additional tailwinds to performance came from robotic surgical system pioneerIntuitive Surgical, Inc.(NASDAQ:ISRG). We believe Intuitive Surgical will continue to innovate and launch new products that enhance surgical outcomes, and we think the company has a long runway for growth.
Intuitive Surgical, Inc. sells the da Vinci surgical robotic system for minimally invasive surgical procedures. The stock rose on investor speculation that the company could launch a new robotic system in 2024. We believe Intuitive Surgical will continue to innovate and launch new products that enhance surgical outcomes, and we think the company has a long runway for growth.”
6. T-Mobile Us Inc (NASDAQ:TMUS)
Number of Hedge Fund Investors: 79
Citi added T-Mobile Us Inc (NASDAQ:TMUS)in its list of the best large-cap stocks for 2024. T-Mobile Us Inc (NASDAQ:TMUS)recently posted Q4 results. While GAAP EPS of $1.67 missed estimates, revenue in the period came in at $20.48 billion, beating estimates by $810 million.
ClearBridge Dividend Strategy made the following comment about T-Mobile US, Inc. (NASDAQ:TMUS) in its Q3 2023 investor letter:
“During the quarter we initiated positions in two new names:T-Mobile US, Inc.(NASDAQ:TMUS) and Gilead Sciences. T-Mobile is the best-in-class player in the wireless space, delivering the strongest growth with the lowest cost structure and the best consumer proposition. T-Mobile’s strength is rooted in its advantaged competitive position. Its superior spectrum holdings enable it to provide better wireless service at meaningfully lower cost. T-Mobile’s annual capital expenditures run about $10 billion, on the order of half the amount its peers must spend. Due to its lower cost structure, T-Mobile can undercut its competitors on price while still generating compelling profitability and returns.
This combination — superior service at lower prices — has enabled T-Mobile to outgrow its competition. In the three years since completing its merger with Sprint, T-Mobile has grown its post-paid subscriber base by about 22%. Over the same period, AT&T’s has grown by about 14%, while Verizon’s by less than 5%.
Given the high fixed-cost nature of the wireless business, these steady increases in revenue growth have led to outsize increases in profits and free cash flow. Free cash flow in 2023 is expected to come in around $13.5 billion, up from less than $8 billion last year. In 2024 free cash flow is expected to grow by over 20% to approximately $17 billion — providing a 10% yield based on today’s stock price.
We have long admired T-Mobile, but until recently the stock did not pay a dividend. The company announced its inaugural dividend in September, and we bought the stock shortly thereafter. The initial yield is about 2% and it is expected to grow about 10% per year.”
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Disclosure.None.15 Best Large-Cap Stocks to Buy in 2024was initially published on Insider Monkey.
