In this article, we discuss the 10 best multibagger stocks to buy now. If you want to skip our discussion on the macroeconomic situation, go directly to 5 Best Multibagger Stocks to Buy Now.
Investors are concerned by the turmoil in the equity markets as there are rising concerns that the Federal Reserve will opt for excessive monetary tightening policies to combat inflation, resulting in a recession. The uncertainty can be gauged by the fact that the CBOE Volatility Index (VIX) is hovering around its highest level since June 17. The index measures the short-term volatility in the market.
Last week, the Dow Jones Industrial Average (DJIA) gave away 4% of its value and closed at its lowest level for 2022 on Friday, September 3. Meanwhile, the S&P 500 lost 4.6% of its value and closed at its lowest point since June 16. Similarly, the tech-heavy NASDAQ Composite suffered the biggest weekly decline of 5.1% amongst the notable market indices. Experts believe that the Federal Reserve is bracing itself for a recession so that inflation can come back to its long-term target of 2%. In a speech last week, Federal Reserve Chair Jerome Powell warned about economic pain on the way.
Analysts are continuously slashing earnings estimates across various sectors due to the dollar gaining strength against other notable currencies of the world and rising interest rates. Economic slowdown causes a contraction in profit margins. Given all this uncertainty, David Kostin at Goldman Sachs has slashed the year-end target for S&P 500 Index from 4,300 points to 3,600 points. Presently, the S&P 500 Index is hovering around the 3,700 points level. It must be noted that the index reached the previous target of 4,300 points in mid-August, but the dramatically rising benchmark interest rate is expected to cause a fall in the S&P 500 Index P/E multiple from 18x to 15x. This is the fourth downward revision in the target for the S&P 500 Index since the start of the year. The New York-based diversified financial services firm had initially anticipated the S&P 500 Index to end 2022 at around 5,100 points.
Under these strained economic circumstances, investors are looking for stocks that have generated healthy returns in the last year and are expected to provide more upside to investors moving forward. While stocks like NVIDIA Corporation (NASDAQ:NVDA), Alphabet Inc. (NASDAQ:GOOG), and Apple Inc. (NASDAQ:AAPL) offer long-term security, they haven’t generated returns as high as some of the best multibagger stocks like Target Hospitality Corp. (NASDAQ:TH) in the previous year. These stocks are gaining investors’ attention now due to their strong historical performance and bright growth prospects.
Our Methodology
We have included 10 stocks that have observed an increase of over 140%, at least, over the past 12 months. Furthermore, these stocks have a market capitalization of at least $300 million.
Best Multibagger Stocks to Buy Now
10. PBF Energy Inc. (NYSE:PBF)
Number of Hedge Fund Holders: 31
1-Year Stock Price Performance: 143.92%
PBF Energy Inc. (NYSE:PBF) is a Parsippany-Troy Hills, New Jersey-based petroleum refiner and supplier with six facilities and a daily refinery production of one million barrels.
In a research note issued on September 23, Ryan Todd at Piper Sandler increased the target price for PBF Energy Inc. (NYSE:PBF) from $45 to $49 and maintained an Overweight rating on the stock. The analyst believes that investors are blowing out the weak gasoline prices, especially in the Gulf Coast region, out of proportion. Todd thinks the market is underappreciating the current strength of the five Petroleum Administration for Defense Districts (PADD 5) gasoline margins that have jumped by over 180% in the last three weeks.
Citadel Investment Group held around 2.4 million shares in PBF Energy Inc. (NYSE:PBF), worth over $71 million as of Q2 2022.
9. CONSOL Energy Inc. (NYSE:CEIX)
Number of Hedge Fund Holders: 23
1-Year Stock Price Performance: 155.34%
CONSOL Energy Inc. (NYSE:CEIX) is a Pennsylvania-based company that owns the Pennsylvania Mining Complex. It is the biggest underground coal mine complex in North America.
Out of the top 10 biggest shareholders of the company, eight of them increased their stake in CONSOL Energy Inc. (NYSE:CEIX) during Q2 2022. David Einhorn’s Greenlight Capital is the biggest hedge fund holder of CONSOL Energy Inc. (NYSE:CEIX). The market value of the hedge fund’s stake stands at around $80 million.
In a research note issued on August 8, Lucas Pipes at B. Riley increased the price target on CONSOL Energy Inc. (NYSE:CEIX) stock from $63 to $79 and maintained a Buy rating. The analyst made the change in target price following the company’s strong Q2 2022 results.
Greenlight Capital shared its outlook on CONSOL Energy Inc. (NYSE:CEIX) in its Q2 2022 investor letter. Here’s what the firm said:
“CONSOL Energy (NYSE:CEIX). The shares ended the quarter at $49.38. Though it trades at a nosebleed 2.6x book value, we expect the company to generate approximately $50 per share in after-tax free cash flow by the end of 2023. Capital returns have not yet begun, but we expect they will shortly.”
Of the 895 hedge funds in Insider Monkey’s database, CONSOL Energy Inc. (NYSE:CEIX) was held by 23 funds as of Q2 2022.
8. Lantheus Holdings, Inc. (NASDAQ:LNTH)
Number of Hedge Fund Holders: 39
1-Year Stock Price Performance: 162.59%
Lantheus Holdings, Inc. (NASDAQ:LNTH) is a Massachusetts-based company that develops, manufactures, and commercializes diagnostic and therapeutic products targeted toward precision diagnostics and radiopharmaceutical oncology. The company is at the eighth position on our list of the 10 best multibagger stocks to buy now.
Yuan Zhi at B. Riley resumed coverage on Lantheus Holdings, Inc. (NASDAQ:LNTH) stock with a Buy rating and a target price of $102 in an investor note issued on August 25. The analyst believes that Lantheus Holdings, Inc. (NASDAQ:LNTH) has a strong growth outlook following the launch of Pylarify, which is a prostate-specific membrane antigen (PSMA) that targets positron emission tomography (PET) imaging agents. The analyst highlighted that another ultrasound contrast agent, Definity, has a market share of over 80% and contributed $121 million to the company’s top line during the first half of 2022. Meanwhile, Pylarify had sales of $223 million during the same period. Pylarify is making a significant impact over other agents due to its availability.
Clearbridge Investments discussed its outlook on Lantheus Holdings, Inc. (NASDAQ:LNTH) in its Q1 2022 investor letter. Here’s what the firm said:
“While companies with immature business models and no profits exist throughout the market, there are certain sectors where they congregate more easily, such as health care. As access to cheap capital recedes, however, many of these specialty drug and biotech companies will likely find it challenging to dismiss long periods of unprofitability. While we have had limited exposure in the sector, our focus on finding high-quality companies at attractive valuations has yielded positive results. For example, Lantheus Holdings (NASDAQ:LNTH) is a global leader in medical diagnostic imaging whose core business suffered during the COVID-19 pandemic due to a dramatic decline in hospital visits. As hospitals return to a level of normalcy, Lantheus’s core business has rebounded. Additionally, in late 2021 the company received approval for its new radio-pharmacological drug, Pylarify, for the treatment of prostate cancer, and initial sales have been well ahead of expectations. We believe it has a strong future in oncology diagnosis and treatment. As a result, Lantheus was our strongest individual performer for the first quarter.”
7. Scorpio Tankers Inc. (NYSE:STNG)
Number of Hedge Fund Holders: 26
1-Year Stock Price Performance: 168.93%
Scorpio Tankers Inc. (NYSE:STNG) is a Monaco-based shipping company that owns and operates fuel tanker vessels with a portfolio of 131 tankers under its ownership. These tankers are partially or fully owned, bareboat, or finance leased.
On September 6, Omar Nokta at Jefferies reiterated a Buy rating on Scorpio Tankers Inc. (NYSE:STNG) stock and increased the target price from $50 to $57. The target price reflects a potential upside of over 43% from the closing price as of September 26. The analyst anticipates strong earnings during the winter months as the tension between Europe and Russia due to the Russia-Ukraine conflict would cause a decline in the transportation of crude oil through pipelines and result in higher dependence on fuel tanker vessels. Crude oil prices and tanker rates are at healthy levels, and this will benefit Scorpio Tankers Inc. (NYSE:STNG) in the coming months. The overall positive outlook on Scorpio Tankers Inc. (NYSE:STNG) stock makes it one of the best multibagger stocks to buy now.
6. Ardmore Shipping Corporation (NYSE:ASC)
Number of Hedge Fund Holders: 13
1-Year Stock Price Performance: 175.67%
Ardmore Shipping Corporation (NYSE:ASC) is a Bermuda-based owner and operator of chemical tankers.
Given the rise in crude oil production in US and Canada following the shale revolution from 2008 onwards, more oil needs to be transported from the refineries in US and Canada to the rest of the world. The surge in demand is even greater following the start of the conflict between Russia and Ukraine, as Russia has cut down the supply of crude oil to European countries. Furthermore, the recovery of the Chinese economy following the ease in COVID-19-related restrictions and lockdowns will also play in favor of Ardmore Shipping Corporation (NYSE:ASC), which has 21 petroleum product tankers and six chemical tankers under its helm. The company has oil giant BP p.l.c (NYSE:BP) as the biggest customer, accounting for 10% of deadweight tonnage (dwt) miles.
Although Ardmore Shipping Corporation (NYSE:ASC) isn’t as popular among the hedge funds as stocks like NVIDIA Corporation (NASDAQ:NVDA), Alphabet Inc. (NASDAQ:GOOG), and Apple Inc. (NASDAQ:AAPL), it still offers an attractive opportunity to earn exponential returns.
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Disclose. None. 10 Best Multibagger Stocks to Buy Now is originally published on Insider Monkey
