In this article, we discuss the 10 back-to-work stocks to buy now.
Vaccine penetration and a quantifiable lull in new cases of COVID-19 across the world in the second half of this year had led to renewed hopes of the reopening of office spaces and a return to normal for the economy. However, office stocks have taken a minor beating in the past few days as a new variant of the virus rises. The World Health Organization has sought to calm fears regarding the new variant, with most experts confident that a vaccine that is effective against it will soon be found, based on experimental data from drug giants.
Investors can take advantage of this blip in office stocks to pick them up at relatively cheaper rates as the market panics. In addition to companies like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Alphabet Inc. (NASDAQ:GOOG), other work-related stocks, especially those that stand to benefit from the back-to-work trend, are discussed in detail below. Office stocks were up around 25% year-to-date before the virus fears struck again.
New office demand had peaked earlier this year, driving a rally in real estate stocks that deal in workplaces. According to a report by news platform CNBC, new office demand was up 444% in August based on vaccinations and a drop in new virus cases, leading to greater optimism about the post-pandemic recovery. Industries that support workplaces, like transport, furniture, and human resource management, have also registered impressive gains.
Our Methodology
We chose some of the notable stocks that could benefit from the broader office opening and back to work trend in the world. These were picked based on business fundamentals and analyst ratings. The hedge fund sentiment around each stock was calculated using the data of 867 hedge funds tracked by Insider Monkey.
Photo by Austin Distel on Unsplash
Back-to-Work Stocks to Buy Now
10. HNI Corporation (NYSE:HNI)
Number of Hedge Fund Holders: 12
HNI Corporation (NYSE:HNI) makes and sells office services and supplies. The reopening of workplaces has created fresh demand for new office furniture, resulting in a slew of new orders for the company in the past few months.
HNI Corporation (NYSE:HNI) has a decent dividend history and recently declared a quarterly dividend of $0.31 per share, in line with previous. The forward yield was 0.37%. The company has a market cap of $1.7 billion.
At the end of the third quarter of 2021, 12 hedge funds in the database of Insider Monkey held stakes worth $28 million in HNI Corporation (NYSE:HNI).
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm DE Shaw is a leading shareholder in HNI Corporation (NYSE:HNI) with 221,122 shares worth more than $8.1 million.
Just like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Alphabet Inc. (NASDAQ:GOOG), HNI Corporation (NYSE:HNI) is one of the stocks on the radar of elite investors.
9. Insperity, Inc. (NYSE:NSP)
Number of Hedge Fund Holders: 18
Insperity, Inc. (NYSE:NSP) provides human resources and business solutions. The stock has surged more than 47% year-to-date as the services of the company come in high demand following the normalization of the economy and the lifting of lockdowns.
Roth Capital analyst Jeff Martin recently raised the price target on Insperity, Inc. (NYSE:NSP) stock to $158 from $116 and kept a Buy rating on the shares, noting that the firm was poised for growth acceleration in the coming months.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Glenview Capital is a leading shareholder in Insperity, Inc. (NYSE:NSP) with 511,258 shares worth more than $56 million.
At the end of the third quarter of 2021, 18 hedge funds in the database of Insider Monkey held stakes worth $211 million in Insperity, Inc. (NYSE:NSP).
8. Boston Properties, Inc. (NYSE:BXP)
Number of Hedge Fund Holders: 21
Boston Properties, Inc. (NYSE:BXP) is a real estate investment trust that focuses on office properties. The reopening of workplaces has benefited the stock as property demand rises and prices creep upwards.
In September, Barclays analyst Anthony Powell initiated coverage of Boston Properties, Inc. (NYSE:BXP) stock with an Overweight rating and a price target of $134, underlining that the demand for warehouse spacing remained strong.
Among the hedge funds being tracked by Insider Monkey, London-based firm TCI Fund Management is a leading shareholder in Boston Properties, Inc. (NYSE:BXP) with 12.9 million shares worth more than $1.4 billion.
At the end of the third quarter of 2021, 21 hedge funds in the database of Insider Monkey held stakes worth $1.4 billion in Boston Properties, Inc. (NYSE:BXP), up from 19 in the preceding quarter worth $1.3 billion.
7. CBRE Group, Inc. (NYSE:CBRE)
Number of Hedge Fund Holders: 37
CBRE Group, Inc. (NYSE:CBRE) provides commercial real estate services. With lockdowns and social restrictions lifted, life is returning to public spaces again and commercial properties are staging a comeback. CBRE is a direct beneficiary of this trend.
Keefe Bruyette analyst Jade Rahmani recently upgraded CBRE Group, Inc. (NYSE:CBRE) stock to Outperform from Market Perform with a price target of $115, noting that the business of the firm was the “best-in-class”.
At the end of the third quarter of 2021, 37 hedge funds in the database of Insider Monkey held stakes worth $3 billion in CBRE Group, Inc. (NYSE:CBRE), the same as in the previous quarter worth $2.6 billion.
Among the hedge funds being tracked by Insider Monkey, Chicago-based firm Harris Associates is a leading shareholder in CBRE Group, Inc. (NYSE:CBRE) with 10.2 million shares worth more than $1 billion.
In its Q1 2021 investor letter, Third Avenue Management, an asset management firm, highlighted a few stocks and CBRE Group, Inc. (NYSE:CBRE) was one of them. Here is what the fund said:
“CBRE Group, Inc. (the largest commercial real estate services firm globally with leading brokerage, facilities management, consulting, and asset management offerings) revealing that it had agreed to acquire a 35% stake in Industrious—one of the largest networks of coworking and private office spaces in North America. Alongside the investment, CBRE’s management team (headed by CEO Bob Sulentic) has created a unique structure whereby it will also contribute its existing shared workspace portfolio (i.e., Hana) thus positioning the combined platform to take significant market share in the rapidly expanding “flexible workplace” market given CBRE’s reach (the company operates in more than 100 countries and counts 90% of Fortune 100 companies as clients) and a coworking model that could be viewed more favorably by property owners (e.g., revenue share agreements in lieu of fixed-cost leases through special purpose vehicles).”
6. Southwest Airlines Co. (NYSE:LUV)
Number of Hedge Fund Holders: 39
Southwest Airlines Co. (NYSE:LUV) is a passenger airline firm based in Texas. After a torrid 2020, business travel is slowly inching back towards normal. This has resulted in increased business for Southwest in the past few months.
On November 19, investment advisory Wolfe Research upgraded Southwest Airlines Co. (NYSE:LUV) stock to Outperform from Peer Perform. Hunter Keay, an analyst at the advisory, issued the ratings update.
At the end of the third quarter of 2021, 39 hedge funds in the database of Insider Monkey held stakes worth $729 million in Southwest Airlines Co. (NYSE:LUV).
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in Southwest Airlines Co. (NYSE:LUV) with 2 million shares worth more than $103 million.
In addition to Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Alphabet Inc. (NASDAQ:GOOG), Southwest Airlines Co. (NYSE:LUV) is one of the stocks that hedge funds are buying.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Southwest Airlines Co. (NYSE:LUV) was one of them. Here is what the fund said:
“One of our goals as we constantly monitor the portfolio is to see if we can better deploy capital by lowering the probability of being wrong. This motivation drove our swap of Delta Airlines into Southwest Airlines during the quarter. We expect a huge rebound in airline traffic as COVID-19 concerns abate, but we are much more comfortable that it will be led by leisure travel. Conversely, we are more uncertain of the ultimate level and timing of business travel demand. Southwest, with its simple fare strategy and high leisure travel exposure, is better positioned to capture the ongoing traffic rebound without having to answer the business travel demand question on which Delta is more dependent. As a result, we expect Southwest to play serious offense as it gains share in the rebounding travel market and can fully leverage the massive pent-up demand for travel that we expect. In addition, the U.S. lead in vaccination over Europe favors Southwest over Delta, given the domestic focus of Southwest. COVID-19 has changed many things, but humans by their very nature like to move, and many of them will do it on Southwest.”
5. Paycom Software, Inc. (NYSE:PAYC)
Number of Hedge Fund Holders: 40
Paycom Software, Inc. (NYSE:PAYC) provides human capital management solutions. Labor shortages have caused havoc for many companies in the past few months and Paycom stock has gained as more firms turn to it for solutions.
Needham analyst Ryan MacDonald recently raised the price target on Paycom Software, Inc. (NYSE:PAYC) stock to $640 from $495 and kept a Buy rating on the shares, appreciating the earnings beat of the firm in the third quarter.
At the end of the third quarter of 2021, 40 hedge funds in the database of Insider Monkey held stakes worth $1.4 billion in Paycom Software, Inc. (NYSE:PAYC).
In its Q4 2020 investor letter, Polen Capital, an asset management firm, highlighted a few stocks and Paycom Software, Inc. (NYSE:PAYC) was one of them. Here is what the fund said:
“Paycom is a cloud-based SaaS provider for human capital management. Its simple yet innovative single-instance software initially targeted small and mid-size businesses, and it is being adopted widely. The company has a highly repeatable sales process driven by more than 90% customer retention and a solid track record for selling more to existing customers while acquiring new users. We also like Paycom’s founder/CEO and his impressive track record for value-creating reinvestment. Despite the challenges created by the pandemic, revenue grew 14% in the fourth quarter and for 2020. Additionally, we believe Paycom is well-positioned to benefit from digital transformation as more corporate functions move to the cloud.”
4. HubSpot, Inc. (NYSE:HUBS)
Number of Hedge Fund Holders: 48
HubSpot, Inc. (NYSE:HUBS) owns and operates a cloud-based customer relationship management platform. The stock has gained in the past few days after reports that tech giant Amazon is interested in buying out the firm. The firm is also likely to receive an influx of new orders as offices reopen and business resumes in the post-pandemic economy.
HubSpot, Inc. (NYSE:HUBS) recently posted earnings for the third quarter, reporting earnings per share of $0.54, beating estimates by $0.10. The revenue over the period was $339 million, beating estimates by $12.6 million.
Among the hedge funds being tracked by Insider Monkey, California-based investment firm SCGE Management is a leading shareholder in HubSpot, Inc. (NYSE:HUBS) with 1.4 million shares worth more than $951 million.
In its Q2 2021 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and HubSpot, Inc. (NYSE:HUBS) was one of them. Here is what the fund said:
“HubSpot has its roots in marketing automation software for small and medium-sized businesses, but during our ownership period has steadily expanded its offering to become a broad front-office solution suite across marketing, sales, service, website content management and customer data analytics (and has simultaneously enriched these tools to attract larger customers). The pandemic has prompted companies across the globe to modernize their customer-facing software at a record pace as they increasingly rely on their digital capabilities. HubSpot’s ability to meet this need was on full display in its recent earnings results. New customer additions hit a record pace (+45% YoY), and the company demonstrated both high retention of existing customers and strong progress in driving higher adoption of additional software modules. Furthermore, the company’s sales and marketing spend is getting more efficient, which is driving a steady increase in margins. Given the positive profit cycle momentum, we added to our position at a valuation we consider attractive.”
3. Kansas City Southern (NYSE:KSU)
Number of Hedge Fund Holders: 59
Kansas City Southern (NYSE:KSU) is a transportation holding company. The reopening of offices will help the firm as people use buses, trains, and other forms of transport to commute to and back from work everyday, giving transport stocks a major boost after months of lockdown.
Kansas City Southern (NYSE:KSU) has a market cap of $26 billion and posted $2.6 billion in revenue last year. The company was founded in 1887 and is headquartered in Missouri. It employs over 6,500 people.
At the end of the third quarter of 2021, 59 hedge funds in the database of Insider Monkey held stakes worth $4.3 billion in Kansas City Southern (NYSE:KSU).
In its Q1 2021 investor letter, Miller/Howard Investments, an asset management firm, highlighted a few stocks and Kansas City Southern (NYSE:KSU) was one of them. Here is what the fund said:
“Canadian Pacific Railway (CP) agreed to acquire Kansas City Southern (KSU) in the largest rail deal in over a decade. The merger will create the first rail network connecting Canada, the US, and Mexico, and it should benefit from the passage of the USMCA Trade Agreement. We initiated a position in KSU in Q4 as we expected it to benefit from growing North American trade and viewed it as a consolidation candidate.”
2. Workday, Inc. (NASDAQ:WDAY)
Number of Hedge Fund Holders: 72
Workday, Inc. (NASDAQ:WDAY) markets enterprise cloud applications. One of the most popular products of the firm is financial management software. As business resumes, banks and tech companies could turn to the company for solutions to manage higher traffic at their branches.
Needham analyst Scott Berg recently kept a Buy rating on Workday, Inc. (NASDAQ:WDAY) stock and raised the price target to $360 from $310, underlining that the third quarter earnings of the firm were “very good”.
At the end of the third quarter of 2021, 72 hedge funds in the database of Insider Monkey held stakes worth $6.3 billion in Workday, Inc. (NASDAQ: WDAY), the same as in the previous quarter worth $5.1 billion.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Workday, Inc. (NASDAQ:WDAY) was one of them. Here is what the fund said:
“In addition to the new issue market, we have been tactically adding growth exposure. We took advantage of the selloff in disruptors that comprise a large portion of the portfolio to initiate a position in enterprise software maker Workday.”
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 250
Microsoft Corporation (NASDAQ:MSFT) is a technology firm with core interests in the software business. As normal service with regards to workplaces resumes again, enterprise spending on Microsoft products will likely increase, benefiting the stock in the near-term.
On November 1, investment advisory Deutsche Bank initiated coverage of Microsoft Corporation (NASDAQ:MSFT) stock with a Buy rating and a price target of $390. Analyst Brad Zelnick issued the ratings update.
At the end of the third quarter of 2021, 250 hedge funds in the database of Insider Monkey held stakes worth $6.5 billion in Microsoft Corporation (NASDAQ:MSFT), up from 238 in the preceding quarter worth $6.2 billion.
In its Q1 2021 investor letter, Polen Capital, an investment management firm, highlighted a few stocks and Microsoft Corporation (NASDAQ:MSFT) was one of them. Here is what the fund said:
“We have written extensively about Microsoft in recent commentaries. It was our leading contributor last year and one of our largest weightings within the Portfolio. It continues to experience business momentum through several dominant, essential, and competitively advantaged businesses, like Office 365 and Azure. The markets it competes for are enormous, which gives the company the ability to compound at scale. In the past quarter alone, the company generated over $40 billion in revenue, representing a 17% growth rate. The inherent operating leverage in Microsoft’s business model continues and led to 34% earnings growth this past quarter. Despite the broad rotation we saw in the first quarter and Microsoft’s robust performance in 2020, we think its business fundamentals continue to exhibit strength, and the stock continues to reflect the fundamentals.”
You can also take a peek at Stanley Druckenmiller is Loading Up on These 15 Stocks and 10 Stocks to Buy and Hold for Long Term According to Warren Buffett.
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Disclosure. None. 10 Back-to-Work Stocks to Buy Now is originally published on Insider Monkey.
