The One Cheap Stock Top Managers Are Buying

Susan Dziubinski: Each quarter, we take a look at the recent transactions of some of the top money managers around today--who we call our Ultimate Stock-Pickers.

Last quarter, one stock was a high-conviction purchase for a whopping 17 of our favorite managers.

What's considered a high-conviction purchase? A high-conviction purchase is one that makes a meaningful addition to a portfolio, as measured by the size of the purchase in relation to the size of the portfolio.

And that one stock is … Alphabet GOOG GOOGL. Google, which generates 99% of Alphabet's revenue, dominates the global search market, generating strong revenue growth and cash flow. We foresee YouTube contributing more to the firm's top and bottom lines over time.

Now, Alphabet has had a rough 2022, as a stronger dollar and economic uncertainty have led to increased hesitancy in ad spending. But assuming less macroeconomic uncertainty in 2023 and the monetization of YouTube shorts, we expect ad revenue growth to return to double-digit levels next year. We think Alphabet stock is worth $160 per share.

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Morningstar strategist Eric Compton, senior analyst Ali Mogharabi, and associate analysts Ari Felhandler and Verushka Shetty contributed the research behind this segment.

Watch "3 Stocks to Sell Before 2023" for more from Susan Dziubinski.