Investors don't have to make guesses about where to put their money in the stock market. Billionaire investors conduct careful research into every stock they buy, which is why it's worth checking out what they are buying (or selling). Fortunately, investment firms that manage more than $100 million are required to disclose their holdings with the Securities and Exchange Commission (SEC).
Three Motley Fool contributors combed through the holdings of a select group of billionaire managers. Here's why the stars are aligning for Amazon (NASDAQ: AMZN), Nike (NYSE: NKE), and Philip Morris International (NYSE: PM).
Amazon is becoming an advertising juggernaut
John Ballard (Amazon): Amazon has been a phenomenal investment over the last few decades. But great businesses with strong competitive advantages usually keep finding ways to deliver returns to investors. Amazon is proving it belongs in that category. Its market cap recently hit $2.1 trillion, and a deeper look at what's going on in the company shows the shares could be worth substantially more in the years to come.
Amazon is mostly known for its online retail business, which generated more than 38% of the company's revenue last quarter. But it's also on pace to be one of the leaders in retail media with one of the fastest-growing markets in advertising. The company is leveraging its high-traffic online store to rake in billions of ad revenue from sellers, publishers, and others. In the last quarter, Amazon's ad revenue grew 19% year over year (excluding currency changes) to reach an annual run rate of $57 billion.
Amazon's non-retail services, including advertising and cloud computing, generate most of the company's total revenue. Because these services generate higher margins than retail sales, the strong growth from the opportunities in retail media and cloud computing are helping grow the company's profits.
Amazon generated a staggering $49 billion in free cash flow over the last year. This is why the stock commands a $2.1 trillion market cap. Clearly, Amazon is going to continue growing its non-retail revenue at high rates, since the advertising and cloud opportunities are still in the early innings of their long-term growth, which should make Amazon even more valuable to investors down the road.
Some highly regarded investment managers were taking profits in the third quarter, but billionaire Chase Coleman of Tiger Global Management added to his firm's stake. I side with Coleman and believe Amazon shares are a solid buy.
The industry giant is now the underdog
Jennifer Saibil (Nike): Nike is the largest activewear company by far, and it has no match in any competitor. The second largest activewear company, Adidas, has literally half of Nike's sales -- $25 billion versus $50 billion over the trailing 12 months. So even though Nike's sales have been declining, down 10% in the 2025 fiscal first quarter (ended Aug. 31), it's the unquestionable leader in the industry with the brand presence and assets to keep its top spot and return to growth.
It's not surprising that billionaire Bill Ackman, who manages Pershing Square Capital, would take a chance on the rebound. Ackman has taken activist positions before, and he recently added to his stake in Nike from 3,040,132 shares to 16,280,338 shares, a 436% increase.
Although Nike has been struggling through the inflationary environment, it made some critical decisions a few years ago to curtail some of its wholesale partnerships in favor of bolstering its direct-to-consumer business. At the time, it was making a big push for its digital channels with a membership program, exclusive product drops, and more. But it didn't account for changing shopping trends, which include browsing and buying from physical athletic wear stores. The company also shifted resources away from innovation. That left a wide niche for its competitors to exploit, and they have, with many smaller brands like Berkshire Hathaway's Brooks and On Holding garnering greater market share.
Nike is already making changes. It has a new CEO in longtime executive Elliott Hill, and the company is working on revitalizing its wholesale partner program. Part of the recent sales drop has been due to rebalancing investments away from current channels and product development and toward wholesale channels and new product lines.
Nike stock is down 32% this year and trades at a price-to-earnings (P/E) ratio of 21. Investors with a long time horizon can feel comfortable following Ackman into a chance on a Nike rebound.
The smart money is piling into this tobacco stock
Jeremy Bowman (Philip Morris International): Philip Morris International has been a top performer this year as the international seller of cigarette brands like Marlboro has successfully pivoted to next-gen products like Iqos heat-not-burn stocks and Zyn nicotine pouches. The stock is now up 38% year to date.
Billionaire investors have taken notice of that strategy, and among those buying the stock in Q3 were Stanley Druckenmiller's Duquesne Family Office, Ken Griffin's Citadel Advisors, and Rajiv Jain GQG Partners.
Philip Morris offers a rare combination of growth, income, and safety. Like its tobacco-stock peers, the company has long been a reliable dividend payer, and it currently offers a dividend yield of 4.2% after raising the dividend by 4%, continuing a long history of dividend hikes.
In Q3, Philip Morris reported organic revenue growth, which excludes currency fluctuations, of 11.6% to $9.9 billion. Organic operating income rose 13.8% to $3.7 billion, driving adjusted earnings per share up 14% to $1.91. Those results beat analyst estimates.
Much of that growth was driven by its next-gen business as heated tobacco unit shipments rose 8.9%, and its oral smoke-free products shipments rose 22.2%. Philip Morris's smoke-free business now accounts for 38% of revenue and 40% of its gross profit.
The company is ramping up production of Zyn pouches with new investments in plants in the U.S., and it acquired the rights to sell Iqos in the U.S.
At a time when the traditional tobacco industry is under pressure, Philip Morris has tapped into a new growth market, and it's paying off for investors.
Don’t miss this second chance at a potentially lucrative opportunity
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
- Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $368,053!*
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Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.
*Stock Advisor returns as of November 18, 2024
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jennifer Saibil has no position in any of the stocks mentioned. Jeremy Bowman has positions in Amazon and Nike. John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Berkshire Hathaway, and Nike. The Motley Fool recommends On Holding and Philip Morris International. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
