In this article, we discuss the 10 best stocks to make money. If you want to skip our detailed analysis of these stocks, go directly to the 5 Best Stocks to Make Money.
Investing in equities is a trusted and reliable method for building long-term wealth. However, even though it is relatively easier to identify stocks that will do well in the long-term, based on the viability of the products or services they offer and the vision of the management that markets them, it is somewhat harder to predict the direction a stock may take in the short-term. This is why making a quick buck at the market can be tricky. A comparison to gambling makes sense here, where beginner’s luck can only get you so far.
However, that is not to say that short-fluctuations are impossible to predict. Many money managers have made successful careers out of day-trading, a fancy term used to describe traders that buy and sell stocks within a trading day, profiting from short-term price fluctuations. With the influx of retail investors on the marketplace, day trading has been taken to new heights, becoming a new normal in a volatile market. Stock trading applications, like Robinhood, have also played a part in this changing dynamic.
As more companies prepare to release their earnings, investors should expect increased price fluctuations in the coming weeks. Academically speaking, any stock that trades 1 or 2 million shares in a day is considered an “active” stock. Active stocks usually experience greater volatility. However, since over 250 firms on the market, many of them in the S&P 500, fall under this category, it is safe to say that traditional definitions have not aged well for the stock market as it is today.
Internet forums like Reddit, often used by retail investors, are full of market enthusiasts who have made fortunes on increased volatility, often betting on small, high-risk firms that either go big or bust completely. This YOLO strategy has invoked interest from big finance as well, ever since the short squeeze saga involving GameStop in January. Some of the top stocks to make money now include Atlassian Corporation Plc (NASDAQ:TEAM), Tesla, Inc. (NASDAQ:TSLA), and Coinbase Global, Inc. (NASDAQ:COIN), among others discussed in detail below.
Our Methodology
These were picked based on upcoming growth catalysts, business fundamentals, and analyst ratings. Hedge fund sentiment was included as a key classifier to provide readers with some more context for their investment decisions.
The hedge fund sentiment around each stock was calculated using the data of 873 hedge funds tracked by Insider Monkey.
Why pay attention to hedge fund holdings? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
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Best Stocks to Make Money
10. Krispy Kreme, Inc. (NASDAQ:DNUT)
Number of Hedge Fund Holders: N/A
Krispy Kreme, Inc. (NASDAQ:DNUT) is a retailer of doughnuts, coffee, and other food and beverages. After a lengthy spell as a private entity, the firm debuted on the market in July this year, fetching a valuation of around $2.7 billion. The stock has gained in recent days after the firm beat market estimates on revenue for the third quarter, revealing that organic sales had grown 6% year-on-year and were up 14% compared to 2019 despite tough competition.
Krispy Kreme, Inc. (NASDAQ: DNUT) also updated guidance for the fiscal year, predicting that annual revenue would be up to $1.38 billion against consensus estimates of $1.34 billion, and organic revenue growth would be around 12%.
Krispy Kreme, Inc. (NASDAQ: DNUT) has been hit by labor and inflation pressures but has been busy shoring up an omnichannel strategy to offset the setbacks. It has agreed to take majority controlling interest in the Canada business of the firm as part of this plan.
Just like Atlassian Corporation Plc (NASDAQ:TEAM), Tesla, Inc. (NASDAQ:TSLA), and Coinbase Global, Inc. (NASDAQ:COIN), Krispy Kreme, Inc. (NASDAQ: DNUT) is one of the stocks attracting the attention of retail traders.
9. Rocket Lab USA, Inc. (NASDAQ:RKLB)
Number of Hedge Fund Holders: N/A
Stifel analyst Erik Rasmussen recently initiated coverage of Rocket Lab USA, Inc. (NASDAQ:RKLB) stock with a Buy rating and a price target of $22, underlining the “explosive” potential of the small satellite market and the technological advantages the firm had to compete in the realm as some of the reasons behind the bullish view. The analyst termed the new Electron rocket of the firm a “game-changer”.
Rocket Lab USA, Inc. (NASDAQ:RKLB) stock has also rallied after the company announced that the National Aeronautics and Space Administration (NASA) had chosen Rocket Lab to launch the Advanced Composite Solar Sail System on the Electron launch vehicle.
Among the hedge funds being tracked by Insider Monkey, California-based firm Think Investments is a leading shareholder in Rocket Lab USA, Inc. (NASDAQ:RKLB) with 1.6 million shares worth more than $17 million.
8. Blink Charging Co. (NASDAQ:BLNK)
Number of Hedge Fund Holders: 7
Blink Charging Co. (NASDAQ:BLNK) is an electric vehicle charging firm. The stock has jumped in the past few weeks as a new infrastructure plan is approved by the government that will place an emphasis on the development of new charging stations across America with the help of spending from Washington. The firm also recently announced that Rudy’s Performance Parts, an automotive accessories business, had purchased 64 residential charging stations from Blink.
Needham analyst Vikram Bagri has a Buy rating on Blink Charging Co. (NASDAQ:BLNK) stock with a price target of $32. In an investor penned in late October, the analyst underlined that the firm would face competition from big players in the US and EU in the short-term, but long-term outlook was bullish.
At the end of the second quarter of 2021, 7 hedge funds in the database of Insider Monkey held stakes worth $14 million in Blink Charging Co. (NASDAQ:BLNK), down from 12 in the previous quarter worth $40 million.
7. PubMatic, Inc. (NASDAQ:PUBM)
Number of Hedge Fund Holders: 10
PubMatic, Inc. (NASDAQ:PUBM) markets a cloud infrastructure platform for advertising. The stock is a favorite of retail investors on Reddit forums. It also has solid fundamentals, recently beating market estimates on earnings per share and revenue in the third quarter by $0.17 and $5.6 million respectively. The share price has soared 8% in the past five days on the back of the earnings report and improved guidance numbers.
On November 10, investment advisory Oppenheimer maintained an Outperform rating on PubMatic, Inc. (NASDAQ:PUBM) stock and raised the price target to $50 from $45, noting the firm was moving closer to “advertisers and agencies”.
At the end of the second quarter of 2021, 10 hedge funds in the database of Insider Monkey held stakes worth $87 million in PubMatic, Inc. (NASDAQ:PUBM), up from 5 in the preceding quarter worth $63 million.
6. Upstart Holdings, Inc. (NASDAQ:UPST)
Number of Hedge Fund Holders: 21
Upstart Holdings, Inc. (NASDAQ:UPST) is a fintech firm that operates a lending platform powered by artificial intelligence. Although the stock has slumped in the past few days despite posting market-beating earnings results for the third quarter, Piper Sandler analyst Arvind Ramnani recently maintained an Overweight rating on the shares with a price target of $300, noting the stock should be bought amid a selloff on concerns around valuation and quantification. The analyst touts loan volume growth and steady conversion rate as catalysts.
Prominent finance personality Jim Cramer recently outlined his bullish stance on “neo-banks” like Upstart Holdings, Inc. (NASDAQ:UPST), noting that these firms could be a good alternative holding to traditional banks in the earnings season.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Third Point is a leading shareholder in Upstart Holdings, Inc. (NASDAQ:UPST) with 13.3 million shares worth more than $1.6 billion.
Alongside Atlassian Corporation Plc (NASDAQ:TEAM), Tesla, Inc. (NASDAQ:TSLA), and Coinbase Global, Inc. (NASDAQ:COIN), Upstart Holdings, Inc. (NASDAQ:UPST) is one of the stocks on the radar of hedge funds.
In its Q2 2021 investor letter, Vulcan Value Partners, an asset management firm, highlighted a few stocks and Upstart Holdings, Inc. (NASDAQ:UPST) was one of them. Here is what the fund said:
“During the quarter, we purchased Upstart Holdings Inc. Upstart is an artificial intelligence (AI) and cloud-based lending platform. The company uses AI models to underwrite superior loans with lower interest rates, lower default rates, higher approval rates, and increased underwriting automation. Consumers can access Upstart-powered loans through its banking partners’ websites; however, most of its loans are underwritten on Upstart.com. Upstart has a fee-based revenue model and retains only a small portion of the loans, while the majority of the loans end up on the balance sheets of its partner banks or are sold into the capital markets. We believe Upstart’s technology is superior to the FICO score, which is ubiquitous within the consumer credit markets. With an excellent product and a large total addressable market, we believe that Upstart’s prospects are bright.”
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Disclosure. None. 10 Best Stocks to Make Money is originally published on Insider Monkey.
