4 Stocks to Buy From a Top-Performing Fund Manager

#Morningstar  #OAKMX #StockPicks

Bill Nygren’s Oakmark Fund recently took new positions in these undervalued stocks.

00:00 Introduction

00:39 Nike NKE

01:34 Amazon AMZN

02:14 Salesforce CRM

03:00 Zimmer Biomet ZBH



Susan Dziubinski: I’m Susan Dziubinski with Morningstar. Oakmark Fund OAKMX manager Bill Nygren is hands down one of the fund industry’s best stock-pickers. In fact, Oakmark Fund has outperformed almost all of its category peers during the past 10 years and earns Morningstar’s top Medalist Rating of Gold. Nygren and his team favor large-cap stocks trading at least 30% below their assessment of intrinsic value. The team focuses on companies run by managers who think like owners.



Nygren and his team initiated new positions in four stocks last quarter. Let’s see what Morningstar thinks of these stocks today and whether they’re stocks to buy.



The first new stock Nygren and his team picked up last quarter was Nike NKE. Nike stock is down about 60% from its all-time high as the company’s famous brand has faced intense competition. Nygren said in Oakmark Fund’s latest shareholder letter that he thinks Nike’s new CEO is implementing a credible plan to improve fundamental performance by bolstering wholesaler relations and diversifying distribution while also increasing product innovation, and Nygren expects those moves will lead to better growth and enhanced margins. What does Morningstar think of Nike today? We think the company has carved out a wide economic moat, and we believe Nike’s advantage in products, marketing, and connections to athletics will allow it to win back share in fiscal 2026. We think the stock is undervalued as it trades well below our $104 fair value estimate.



The second stock Nygren’s team added to Oakmark Fund recently is Amazon AMZN. Nygren said he picked up shares of Amazon in the second quarter after its stock price fell due to a combination of tariff and short-term macroeconomic concerns. Nygren calls Amazon one of the world’s best companies. Morningstar agrees with that assessment. By dominating in e-commerce and cloud services, Amazon has carved out a wide economic moat that’s underpinned by network effects, cost advantages, intangible assets, and switching costs. We think Amazon stock is worth $245 per share, and it looks undervalued today.



Nygren also added Salesforce CRM to Oakmark Fund’s portfolio last quarter. The stock is down about 30% from its 2024 highs. Nygren says he thinks Salesforce has further room to run as the company leverages its unique position to help businesses deploy AI and continues to restructure its sales organization. What does Morningstar think? We think Salesforce has established itself as the clear leader in software for all aspects of the customer relationship journey, and we’ve awarded it a wide economic moat rating. We model a five-year compound annual growth rate for total revenue of 8% through fiscal 2030. We think the stock is attractive today as it trades well below our fair value estimate of $325.



The final new stock that Nygren added to Oakmark Fund last quarter is Zimmer Biomet ZBH. Zimmer is a leading medical-device company and a pure play in orthopedics, and Morningstar thinks the company has carved out a wide economic moat. While the company should benefit long term from an aging population, the stock has been weighed down lately by disappointing results. However, Nygren thinks new management’s recently completed multiyear initiatives will streamline operations and reinvigorate product innovation. Morningstar thinks Zimmer stock looks undervalued, as it trades well below our $130 fair value estimate.



For more stock ideas, be sure to tune into The Morning Filter each week wherever you get your podcasts and visit Morningstar.com, too.



Morningstar senior analysts Dan Romanoff, David Swartz, and Debbie Wang contributed the research behind this segment.



Subscribe to The Morning Filter on Apple podcasts, or wherever you get your podcasts. https://podcasts.apple.com/us/podcast/the-morning-filter/id1792280057



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Read what our team is writing.

Susan Dziubinski https://www.morningstar.com/people/susan-dziubinski



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