Bill Gates Portfolio: 7 Best Stocks to Buy in 2022

The trust has the same manager as Gates’ personal stock firm.

During the first quarter, the stock market was losing ground, and it wasn’t just regular investors who were selling. The Bill & Melinda Gates Foundation Trust, the investment arm of the philanthropic organization founded by Microsoft Corp. (ticker: MSFT) billionaire Bill Gates, was also not in a buying mood. It started the quarter with 22 companies in its portfolio, and during the period sold shares of 12 of them, completely liquidating its holdings of three, including Google parent Alphabet Inc. (GOOG, GOOGL), according to investing information provider Fintel’s presentation of data from regulatory filings. With all the selling going on, it’s notable that the trust held its investments in 10 of them steady. Investors who don’t own any of these companies may want to consider buying shares, given the pedigree of the trust’s manager, Michael Larson, who also manages Gates’ personal stock firm. Here are seven stocks from the Gates trust’s portfolio to buy now:

Sanderson Farms Inc. (SAFM)

The Gates trust bought more than 520,000 shares in this Mississippi-based poultry producer during the fourth quarter of last year. In an environment of high inflation and the continued return of restaurant customers after the pandemic, the company has been able to earn enough money to more than offset the rising cost of feeding its chickens. During its most recent quarter, Sanderson Farms reported net income of $321.2 million compared with $96.9 million during the same quarter a year earlier. That significant increase came as average selling prices per pound sold rose 33.6% while feed costs per pound of broiler chickens processed rose just 14.1%.

Schrodinger Inc. (SDGR)

The trust owns nearly 7 million shares of this New York-headquartered life- and materials-sciences company. Schrodinger develops chemical simulation software used by drugmakers and materials researchers, and it has its own drug discovery program as well. The company isn’t profitable, but it has been increasing its revenue. In its most recent quarter, sales jumped 51% to $48.7 million. Its software-division sales accounted for the largest dollar amount, but its drug discovery unit led in growth percentage, with a 169% increase. But the company does need to rein in its operating expense growth. For this year, the company expects that to be slightly lower than the 42% it saw in 2021. Schrodinger expects sales to range from $161 million to $181 million in 2022, which would be a 17%-to-31% jump over 2021.

Coupang Inc. (CPNG)

This South Korean e-commerce company is another company that is boosting its revenue although it’s not profitable yet. In its most recent quarter, its sales hit a record of $5.1 billion, helping it narrow its net loss to $209.3 million from more than $295 million in the same quarter of 2021. So far this year as of June 7, the stock has lost more than 58%, compared with the S&P 500’s decline of about 13%. But that could be a bargain for investors who think the company’s spending will set it apart from competitors enough to eventually help it turn a profit.

Weber Inc. (WEBR)

If Larson is right to hold this stock, investors who own this charcoal-, gas- and electric-grill maker could see their portfolios heat up. But they may have to be patient. Its latest results showed sales declining and the cost of goods sold rising, and the company swung to a loss. But high inflation won’t last forever, and the company has a solid history and global reach. “Weber has operated through many environments over the last 70 years and remains well positioned to navigate near-term market challenges to drive long-term growth and value creation for shareholders,” CEO Chris Scherzinger said in remarks accompanying Weber’s latest earnings release.

Waste Management Inc. (WM)

While the Gates trust didn’t change the number of shares it has in this trash collection and recycling company during the first quarter, other institutional investors were buying. Hedge funds increased their holdings in the company by 1.9 million shares during the quarter, according to Uri Gruenbaum, CEO of TipRanks. “Waste Management has a steady and solid business in waste collection and recycling, but is also investing heavily in renewable energy initiatives as it works to expand its renewable natural gas infrastructure,” he says. In the first quarter, the company increased both revenue and net income.

Ecolab Inc. (ECL)

This water, hygiene and infection-prevention solutions and services company has customers in the food, health care, hospitality and industrial markets in more than 170 countries. In its most recent quarter, Ecolab’s net sales rose 13% year on year, but its net income declined 11% amid increasing cost of sales. Inflation and lingering COVID-19 headwinds have helped push the stock more than 27% lower this year as of June 7’s close, but analysts are generally positive and insiders have recently been buying, Gruenbaum says. “Ecolab looks well positioned for recovery as we emerge from COVID-related restrictions,” he says.

Madison Square Garden Sports Corp. (MSGS)

The trust held onto this sporting events company during a quarter when its revenues rose 85% and its net income attributable to stockholders surged from around $5.4 million to more than $24.5 million. During its most recent quarter, revenues from tickets, suites and sponsorships, food, beverages and merchandise beat results from the comparable quarter in 2020 before the 2019-2020 NBA and NHL seasons were suspended. The company “showed strong results driven by revenues well above pre-pandemic levels, as COVID-related restrictions ease and the public is more easily able to return to sporting events,” Gruenbaum says.

7 best stocks to buy from the Gates foundation’s portfolio:

— Sanderson Farms Inc. (SAFM)

— Schrodinger Inc. (SDGR)

— Coupang Inc. (CPNG)

— Weber Inc. (WEBR)

— Waste Management Inc. (WM)

— Ecolab Inc. (ECL)

— Madison Square Garden Sports Corp. (MSGS)

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