Bill Gates Owns $1.8 Billion of this Stock
Within Top 10 Stocks, I like to keep tabs on where the richest people in the world are putting their money.
After all, billionaires like Warren Buffett and Bill Gates are some of the smartest investors on the planet. And they have advantages the rest of us don’t: entire staffs of MBAs working for them… Wall Street CEOs who give them sweetheart deals in order to get their business… and friends at the highest levels of government and society who can steer them toward the next big thing.
These advantages have helped corporate titans like Buffett and Gates deliver some of the biggest gains in stock market history.
For example, anyone with the good judgment to invest $10,000 in Buffett’s Berkshire Hathaway (NYSE: BRK-B) in 1965 would be sitting on an astonishing $51.3 million at the end of 2011.
So when a prominent billionaire like Bill Gates starts buying a stock hand over fist, you need to stand up and pay attention. In this case, Bill Gates — via his investment vehicle Cascade Investment — owns 24.5 million shares of one of the world’s most popular agriculture-related stocks. The total value of the stake now sits at $1.8 billion. But that’s not all. In summer of 2011, Cascade Investment purchased 7.5 million shares of this stock… an investment worth $571 million, ranking it as Gates’ biggest purchase in recent memory.
I’ll give you the name and ticker symbol of this stock in a moment.
But first, you need to understand the broader implications of what’s going on right now. You see… Bill Gates’ latest investment is just a tiny part of a much bigger story. It’s just one example of what I believe could be the single most important trend in the stock market today.
What’s going on?
Simple — in an effort to lock in big gains and protect their wealth from today’s unprecedented stock market volatility, the world’s richest billionaires, politicians and corporate titans are loading up on a select group of stocks that have proven to be some of the safest and most reliable money-makers on the planet. Warren Buffett, Bill Gates, Carlos Slim… maybe even your own Congressman already own many of these stocks.
Around our research office in Austin, Texas, we call them “Forever” stocks. We’ve talked about them so much over the past few months, the nickname is just easier. Everyone here knows exactly what we’re talking about.
Put simply, this is the set of stocks you can buy today and hold for the rest of your life. When you own them, you no longer need to worry about things like inflation or deflation… bear markets or recessions… “flash-crashes” or rising interest rates. And right now, the world’s richest billionaires are loading up on some of our favorite “Forever” names.
Case-in-point: Warren Buffett’s Berkshire Hathaway first purchased 216,000 shares of one of our favorite “Forever” stocks — MasterCard (NYSE: MA) — in 2011. And according to SEC filings, he bought another 189,000 shares of this same stock — nearly doubling down on the initial position.
None of this surprises us.
We’ve been pounding the table on “Forever” stocks like MasterCard for months now.
My staff and I put everything you need to know about these “Forever” stocks in our latest presentation entitled “The 10 Best Stocks to Hold Forever.” It’s the single most popular piece of research we’ve published in our company’s 11-year history, and it’s already been viewed by more than a quarter-million investors. If you haven’t already watched it, then I encourage you to do so right now.
In the meantime, let’s get back to Bill Gates.
Recently, Gates made a series of purchases of Deere & Co. (NYSE: DE). Deere is the world’s largest farm equipment manufacturer, a leader in the production of equipment and machinery for the construction and forestry industries, and a top producer of lawn and garden tractors for homeowners.
With gains of nearly 1,200% since 1990 and with a stable business model that focuses on farming equipment that the world desperately needs in order to feed the global population, Deere could easily qualify as a “Forever” stock (but it didn’t make my final cut).
After examining the stock’s fundamentals, it’s easy to see why Gates would want to load up on the shares: it’s a good value, it has a firm balance sheet and the company has enough liquid assets to pay off its near-term obligations twice over. In addition, Deere & Co. has raised its dividend an average of 16% a year for the past five years. At recent prices, it now yields about 2.5%.
On top of all this, thanks to its high-quality products and strong customer service, Deere & Co. typically dominates the markets in which it competes. And to further extend its market leadership, the company has aggressively expanded its business overseas. In fact, Deere & Co. now derives 40% of its total sales from outside the United States and Canada.
And because the company is more geographically diversified than its competitors, it tends to enjoy greater profitability when business is good and take smaller hits to the bottom line during industry downturns.
But there are some risks to consider…
Deere & Co. has exposure to the ailing U.S. housing market through its construction equipment business. As such, its sales could suffer if the housing market continues to worsen. Also, further expansion into foreign markets could be difficult.
Action to Take –> You may want to follow Bill Gates on this one. Because of its size, financial strength and geographic diversity, Deere & Co. could continue to deliver market-beating gains in the years ahead.
[Note: Deere & Co. is a solid investment, but as I said earlier, I’ve identified 10 other “Forever” investments with stronger business models, higher dividend yields and (arguably) much greater long-term growth potential. To learn more about this exclusive list of stocks, visit this link.]