Best Stocks That Bill Gates Own

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Best Stocks That Bill Gates Own

Best Stocks That Bill Gates Own

The Bill & Melinda Gates Foundation Trust has substantial holdings in Caterpillar (CAT -1.96%), Ecolab (ECL -1.54%), and UPS (UPS -0.97%), according to its most recent 13F filing with the Securities and Exchange Commission. Given that Warren Buffett serves as a trustee for the organization, it would be wise for regular investors to review the Trust's holdings and think about following its lead.

In 2021, Caterpillar, this enormous producer of machinery for mining, transportation, energy, and construction will undoubtedly be in a recovery phase. The company's retail sales growth is on the upswing, and the $1.1 billion decline in dealer inventory during the fourth quarter exceeded management's forecast of a $700 million decline.

The COVID-19 outbreak makes Ecolab, a corporation that specializes in food safety, cleanliness, and clean water, seem like a strange choice for a business. On the other side, it's a pioneer in maintaining sanitary settings. On the other hand, given its extensive exposure to the hotel, restaurant, and hospitality sectors, many of its clients continue to suffer as a result of the necessity of social distancing initiatives.

Although Wall Street analysts have revised their predictions for diluted EPS, Ecolab's management decided not to provide any profit guidance when it issued its fourth-quarter report due to the uncertainty surrounding the type of economic rebound that may be on the horizon. Currently, it is expected to increase from $4.02 in 2020 to $5.33 in 2021. Ecolab is selling at approximately 40 times anticipated profits as of the most recent share prices, which, in my opinion, is a bit excessive for a business whose future prospects are not quite assured.

It's interesting to note that in addition to having a sizable ownership in UPS, the Gates Foundation also holds a sizable holding in UPS's main rival, FedEx. They definitely have a lot in common, not the least of which is that they are both unsure of how to handle the margin constraints brought on by the rise in e-commerce shipping volumes. For them, the on retail trend presents both an opportunity and a challenge.

However, UPS CEO Carol Tome has made it quite apparent that improving the company's profit performance is her top priority. There is proof that UPS is already making strides in that direction. For instance, in the important U.S. domestic package market, revenue growth has been higher than volume increase for the past two quarters.

Additional margin gains seem possible given the abundance of available e-commerce volume and the willingness to do so. And UPS appears to be a decent deal given that the company is now priced at less than 18 times projected free cash flow for 2021.

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