In this article, we discuss the 10 best hot stocks to buy right now based on hedge fund sentiment and analyst ratings.
Growth stocks took a beating in early 2022, bringing valuations down to attractive levels. Some analysts believe the current market correction in tech stocks offers an opportunity for beginner investors to pile into stocks with long-term growth potential. Analysts are also keeping a close eye on tech companies’ performance and earnings reports.
According to Wall Street Journal, Saira Malik, chief investment officer at Nuveen, said:
“While we’re pleased to see that valuations have come down a bit, that’s not the key driver that we’re counting on to drive the markets higher. We’re counting on earnings.”
Some of the hot stocks to consider include Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG) and Tesla, Inc. (NASDAQ:TSLA), among others discussed in detail below.
Our Methodology
Insider Monkey tracks over 900 elite hedge funds. For this article we picked the stocks that are popular among these hedge funds and have long-term growth prospects, especially in the context of the current decline in tech stocks.
Photo by Joshua Mayo on Unsplash
10 Best Hot Stocks To Buy Right Now
10. Cinemark Holdings, Inc. (NYSE:CNK)
Number of Hedge Fund Holders: 29
Established in 1984, Cinemark Holdings, Inc. (NYSE:CNK) is one of the world’s largest and most influential movie theater chain operators. The company currently has operations across 42 U.S. states and 15 countries throughout South and Central America.
Bernard Horn of Polaris Capital Management is one of the biggest stakeholders of Cinemark Holdings, Inc. (NYSE:CNK) as of the end of the fourth quarter, according to the data tracked by Insider Monkey. Overall, 29 funds were bullish on the company by the end of the December quarter, compared to 32 in the previous quarter.
Similar to Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG) and Tesla, Inc. (NASDAQ:TSLA), Cinemark Holdings, Inc. (NYSE:CNK) is a notable stock to invest in.
9. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 91
No stranger to making frequent headlines, billionaire Elon Musk’s Tesla, Inc. (NASDAQ:TSLA) is a California-based electric vehicle and clean energy company that is involved in the design and manufacturing electric cars, and battery energy storage.
Evercore ISI analyst Chris McNally noted Tesla’s Q4 beat in an investor note and said that the company’s guidance of 50% to 60% unit growth implies deliveries of more than 1.4 million units, which is above consensus expectations.
In the Q3 2021 investor letter of Worm Capital, the management firm mentioned Tesla, Inc. (NASDAQ:TSLA). Here is what the fund said:
Our core portfolio as of this writing—TSLA, SPOT, SHOP, ABNB, and AMZN—are all premier examples of companies that use the concept of aggregation of marginal gains to continuously improve their value proposition for customers. After all, what is innovation if not just a continuous search for fractional advantages in business?
The way we see it, Tesla is perhaps the generational example of the marginal gain aggregation theory. It’s also been our largest position for several years now. There are many ways to characterize and value this business (see previous letters for longform write-ups), but perhaps the best way to think about the company is that it is a highly vertically-integrated software and hardware firm that’s devoted entirely to aggregating marginal gains across its organization. The goal? Lower costs, improve thruputs, and dramatically enhance the value proposition—at scale—for consumers…” (Click here to see the full text)
8. Target Corporation (NYSE:TGT)
Number of Hedge Fund Holders: 49
Target Corporation (NYSE:TGT) is a Minnesota-based retail corporation that operates general merchandise discount stores.
In an effort to revamp its stores to serve more via fulfillment centers for online orders, Target Corporation (NYSE:TGT) in late 2021 announced to invest $4 billion a year for several years to speed up its shift to e-commerce.
Out of the hedge funds being tracked by Insider Monkey, Rajiv Jain’s GQG Partners is the leading shareholder in Target Corporation (NYSE:TGT), with over 4.9 million shares worth more than $1.14 billion.
7. General Electric Company (NYSE:GE)
Number of Hedge Fund Holders: 57
Incorporated in New York and headquartered in Boston, General Electric Company (NYSE:GE) is a multinational diversified technology company.
On November 10, Wells Fargo analyst Joseph O’Dea raised the price target on General Electric Company (NYSE:GE) to $120 from $110, and kept an Equal Weight rating on the shares.
At the end of the fourth quarter of 2021, 57 hedge funds in the database of Insider Monkey held stakes worth $6.3 billion in General Electric Company (NYSE:GE), up from 53 in the previous quarter worth $6.2 billion. Andreas Halvorsen’s Viking Global is the leading shareholder in the company.
In its Q1 2021 investor letter, Vulcan Value Partners, an asset management firm, highlighted a few stocks and General Electric Company (NYSE:GE) was one of them. Here is what the fund said:
“General Electric is outperforming our expectations for 2021 as the economic recovery is occurring faster than expected. We are particularly pleased with its free cash flow generation. We are happy to own it in our portfolio.”
6. JD.com, Inc. (NASDAQ:JD)
Number of Hedge Fund Holders: 67
Formerly called 360buy, JD.com, Inc. (NASDAQ:JD) is a Chinese e-commerce company headquartered in Beijing.
On November 11, Goldman Sachs analyst Ronald Keung reiterated a Buy rating and a $123 price target on JD.com, Inc. (NASDAQ:JD) shares, keeping the stock on his Conviction List.
At the end of the fourth quarter of 2021, 67 hedge funds tracked by Insider Monkey reported owning stakes in JD.com, Inc. (NASDAQ:JD), down from 76 in the previous quarter. The total value of these stakes is over $3.9 billion.
Out of the hedge funds being tracked by Insider Monkey’s database, investment firm Tiger Global Management LLC is the major shareholder in JD.com, Inc. (NASDAQ:JD) with over 53.7 million shares worth more than $3.8 billion.
In addition to Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG) and Tesla, Inc. (NASDAQ:TSLA), JD.com, Inc. (NASDAQ:JD) is a stock that investors are paying attention to.
Arisaig Partners mentioned JD.com, Inc. (NASDAQ:JD) in its Q2 2021 investor letter. Here is what the firm has to say:
“JD.com, for example, continues to display impressive operating momentum, with sales on track to grow around 30% this year by our estimates. Looking longer term, this company is making a credible claim to be the dominant player in Chinese grocery ecommerce, an enormous chunk of overall consumption in China, and the last one yet to move online in a big way. We think that JD has a clear advantage over rivals here thanks to its integrated and fully self-managed logistics capabilities. Whereas an offline big box retailer might have 10-20,000 SKUs, JD offers 8 million. 90% of orders fulfilled by JD Logistics can be delivered on the same day or the next day to 500 million customers. The fact that JD has just 30 days of inventory tells us that this is a highly-optimised fulfilment chain. It is very hard to be both fast and efficient, and in order to achieve this it is necessary to know what inventory to hold in which warehouse, and when to hold it (“right place, right time, right person”), a highly information-intensive challenge. The only other retailer that comes close to being able to manage that level of complexity is Amazon, and indeed these are capabilities that are very hard to replicate, taking decades of painstaking investment, trial and error testing, and data accumulation.
Moreover, far from being some sort of ‘victim’, this company is most likely a beneficiary of tighter regulation in this sector. A recurrent message running through JD’s recent investor day was that of “deep purpose”, the objective being to create shared value for a broader ecosystem of customers, merchants and employees. As we describe in the next section on “Navigating China”, this form of alignment with the strategic objectives of the government is a very China-specific way of conceptualising ESG, and essential for all businesses that operate in this country to get right…” (Click here to see the full text).
5. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 110
Nvidia Corporation is a California-based multinational technology company involved in the design and manufacture of computer graphics processors and chip units for the gaming, computing and automotive markets.
Of the 924 hedge funds tracked by Insider Monkey, 110 hedge funds have positions in NVIDIA Corporation (NASDAQ:NVDA) at the end of the fourth quarter of 2021, compared to 83 funds in the previous quarter. Fisher Asset Management is the company’s largest shareholder, with shares worth $1.5 billion.
Harding Loevner mentioned NVIDIA Corporation (NASDAQ:NVDA) in its second-quarter investor letter. Here is what the firm has to say:
“Within IT, shares of US-based computer chip developer NVIDIA continued their climb as rising demand across segments-from work-from-home laptops to data centers to cryptocurrency mining rigs-led to shortages that translated into surging prices for its chips. Such was the windfall that NVIDIA even made technical changes to some of its products to make them towards what it believes are more sustainable uses. Less attractive to cryptocurrency miners, to steer scarce supply viewed by geography, the lion’s share of excess returns came from good stock performance in the US. In addition to the contributions from NVIDIA and our health care holdings, a pair of IT software and service providers also aided relative returns.”
4. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 134
Apple Inc. (NASDAQ:AAPL) recently made headlines after it was reported that the company was venturing into the electric vehicle market with the introduction of its self-driving car, expected to debut as early as 2025.
Out of the hedge funds tracked by Insider Monkey, Warren Buffett’s Berkshire Hathaway is the leading stakeholder in Apple Inc. (NASDAQ:AAPL), with over 887 million shares worth over $157.5 billion.
ClearBridge Investments mentioned Apple Inc. (NASDAQ:AAPL) in its first-quarter 2021 investor letter. Here is what the firm has to say:
“As we actively manage holdings and position sizes, we look to regularly recycle capital into more compelling opportunities. Maintaining our valuation discipline, we sharply reduced our position in Apple, whose shares more than doubled following our initial purchase in mid-2019 with an earnings multiple rising from the low-to-mid teens to nearly 30x.”
3. PayPal Holdings, Inc. (NASDAQ:PYPL)
Number of Hedge Fund Holders: 110
PayPal Holdings, Inc. (NASDAQ:PYPL) is an American multinational financial technology company operating an online payments system, enabling the digital transfer of funds across the world, with over 416 million active accounts as of Q3 2021.
PYPL stock has been losing value over the past few weeks amid a broader decline in tech stocks and the company’s weak earnings report. However, some analysts believe the fall offers an attractive entry point.
Ken Fisher’s Fisher Asset Management is the biggest stakeholder of PayPal Holdings, Inc. (NASDAQ:PYPL) as of the end of the fourth quarter, according to the data tracked by Insider Monkey. Overall, 110 funds were bullish on PayPal Holdings, Inc. (NASDAQ:PYPL) by the end of the December quarter, versus the 123 funds in the previous quarter.
Alger mentioned PayPal Holdings, Inc. (NASDAQ:PYPL) in its Q3 2021 investor letter. Here is what the firm has to say:
“PayPal Holdings, Inc. was among top detractors from performance. PayPal is a pure play on e-commerce and electronic payments which is driving the company’s high unit volume growth. As a digital payments company, it is helping to facilitate the shift to a cashless society. The coronavirus pandemic has significantly accelerated the adoption of e-commerce and the utilization of digital payments platforms. In our view, PayPal is currently positioned to benefit the strength in e-commerce trends, including increasing net new active users and increased engagement per user. PayPal also has launched a service enabling its customers to buy, hold and sell cryptocurrency directly from their PayPal account. PayPal’s vision is to become a Super App that integrates payments, commerce and financial services, as well as crypto capabilities. After outperforming earlier in the year, the performance of PayPal shares weakened in the third quarter with the company facing potentially higher transaction expenses and credit losses. The higher transaction expenses are driven by a shift by consumers to the higher cost travel and entertainment categories which skew toward less profitable credit transactions.”
2. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 155
At the end of the fourth quarter of 2021, 158 hedge funds tracked by Insider Monkey reported owning stakes in Alphabet Inc. (NASDAQ:GOOG), compared to 156 funds in the previous quarter. The total value of these stakes is over $36.6 billion.
On November 2, Morgan Stanley analyst Brian Nowak raised the price target on Alphabet Inc. (NASDAQ:GOOG) shares to $3,200 from $3,000, and kept an Overweight rating on the shares of the company.
Here is what Polen Global Growth has to say about Alphabet Inc. (NASDAQ:GOOG) in its Q3 2021 investor letter:
“Alphabet continue to perform well as the business have grown through the pandemic. Alphabet has benefited as more people spend more time online and advertisers continued to shift towards digital ads. Those leading in the new world are accelerating investment, while those lagging are investing to close the gap. This is a great example of the pandemic accelerating trends that were already in motion, making leaders more resilient.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 271
Amazon.com, Inc. (NASDAQ:AMZN) tops our list of the best hot stocks to buy right now. A Washington-based multinational e-commerce company that is involved in the cloud computing, artificial intelligence, and digital streaming sectors, Amazon.com, Inc. (NASDAQ:AMZN) is one of the largest companies in the U.S. technology sector.
Of the 924 elite hedge funds tracked by Insider Monkey, 279 hedge funds reported owning stakes in Amazon.com, Inc. (NASDAQ:AMZN) at the end of the December quarter, up from 242 in the previous quarter. The total value of these stakes is over $49.1 billion. Ken Fisher of Fisher Asset Management is among the leading shareholders in the company, with 2.2 million shares worth $7.2 billion.
On November 17, Goldman Sachs analyst Eric Sheridan kept a Buy rating alongside a $4,100 price target on the shares of Amazon.com, Inc. (NASDAQ:AMZN). The analyst names the e-commerce company as his top pick for 2022.
Polen Capital mentioned Amazon.com, Inc. (NASDAQ:AMZN) in its Q3 2021 investor letter. Here is what the firm has to say:
“Amazon has also lagged as its revenue growth is slowing on the very difficult comparisons from last year when this behemoth was growing revenue by over 40%. We still expect exceptional long-term growth and significant margin expansion as the fastest growing (and now large) segments of Amazon are also generating the highest margins.”
You can also take a look at 10 Best Stocks to Buy With 50+ Years of Dividend Increases and What are the Best Stocks to Buy Right Now?
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Disclosure: None. 10 Best Hot Stocks To Buy Right Now is originally published on Insider Monkey.
