In this article, we discuss the 10 best upside stocks to buy right now.
As technology-related growth stocks undergo a lean spell after record-shattering gains over the past twelve months, the future outlook of the broader market has become uncertain. This is primarily the result of confusion around new infrastructure plans, which still have to pass Congressional politics before becoming law, and the slow burnout of fiscal and monetary stimulus packages designed to help businesses through the pandemic. In such a scenario, even market experts are finding it hard to predict growth catalysts over the next few months.
Some of this uncertainty is due to the dominance of the large-cap technology stocks on the market that have been responsible for the majority of the overall growth over the past decade. In the first three months of 2021, a whopping 85% of stocks on the S&P 500, more than 20% of which is made up of large-cap tech firms, beat profit expectations of Wall Street analysts. Some of the companies that drove this rally and are expected to continue on the path include Apple Inc. (NASDAQ: AAPL), Shopify Inc. (NYSE: SHOP), and Micron Technology (NASDAQ: MU).
Apple Inc. (NASDAQ: AAPL) recently organized the annual Apple Worldwide Developers Conference, delivering a keynote address that highlighted the future plans of the company in audio-related services. After the conference, investment advisory Oppenheimer maintained an Outperform rating on Apple Inc. (NASDAQ: AAPL) stock with a price target of $160. The consensus Wall Street rating on the California-based tech giant remains a Moderate Buy with an average price target of over $157, implying an upside potential of close to 25%.
Another stock to watch out for in the coming months is Shopify Inc. (NYSE: SHOP), the Canadian ecommerce company with a market capitalization of over $153 billion. On May 11, investment advisory Loop Capital upgraded Shopify Inc. (NYSE: SHOP) stock to Buy from Hold with a price target of $1,400. Anthony Chukumba, an analyst at the firm, forecast that Shopify Inc. (NYSE: SHOP) would continue to drive top-line growth as it offered competitive pricing, security, and reliability to businesses of all kinds, including those with enterprise-level budgets.
Another inclusion on the upside stock list is Micron Technology (NASDAQ: MU), the Idaho-based firm that offers memory storage solutions. On June 9, the Senate passed a landmark $250 billion package aimed at countering Chinese dominance in tech-related manufacturing. More than $190 billion of the total package would be spent on US-based technology product manufacturers so they can compete with Chinese firms globally. Micron Technology (NASDAQ: MU) is one the stocks that stand to benefit from this plan.
It remains to be seen whether technology stocks can maintain the growth momentum they gained in 2020. However, it is quite certain that some of the changes brought about by revolutionary tech and accelerated by the pandemic, like the rise of fintech, will extend gains well beyond the coronavirus economy, influencing market dynamics for years to come. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, 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 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. 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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With this context in mind, here is our list of the 10 best upside stocks to buy right now. We chose these stocks based on their long-term growth potential as several analysts believe theses stocks have plenty of upside potential on the back of their strong business models and products.
Best Upside Stocks to Buy Right Now
10. Teladoc Health, Inc. (NYSE: TDOC)
Number of Hedge Fund Holders: 42
Teladoc Health, Inc. (NYSE: TDOC) is a New York-based health company that specializes in telemedicine and virtual healthcare. It was founded in 2002 and is placed tenth on our list of 10 best upside stocks to buy right now. The company’s shares have offered investors returns exceeding 5% over the past month. Charles Rhyee, an analyst at investment advisory Cowen, has forecast more growth for the New York firm based on the untapped market potential in the telehealth business in the United States.
Teladoc Health, Inc. (NYSE: TDOC) is expected to continue on a growth trajectory through the year. On May 3, the stock was given an Outperform rating by investment advisory Credit Suisse with a price target of $264, implying 75% upside potential.
At the end of the first quarter of 2021, 42 hedge funds in the database of Insider Monkey held stakes worth $3.3 billion in Teladoc Health, Inc. (NYSE: TDOC), down from 50 in the preceding quarter worth $2.6 billion.
In its Q4 2020 investor letter, Carillon Tower Advisers, an asset management firm, highlighted a few stocks and Teladoc Health, Inc. (NYSE: TDOC) was one of them. Here is what the fund said:
“Teladoc Health offers remote physician access to patients at home. After experiencing incredible levels of growth throughout the early stages of the pandemic as its unique value proposition rose to the forefront of the healthcare industry, the firm’s shares cooled off a bit as optimistic vaccine data slightly curtailed investor expectations for the firm’s future growth potential. We sold the stock.”
9. Plug Power Inc. (NASDAQ: PLUG)
Number of Hedge Fund Holders: 25
Plug Power Inc. (NASDAQ: PLUG) is a New York-based company in the electric equipment manufacturing business. It was founded in 1997 and is ranked ninth on our list of 10 best upside stocks to buy right now. The stock has returned more than 491% to investors in the past year. The company markets hydrogen fuel cell systems that can replace fossil fuel solutions for energy needs. It mostly offers these solutions to the manufacturing and automotive industries, although it has plans to expand to more sectors.
Plug Power Inc. (NASDAQ: PLUG) stock was given a Buy rating by investment advisory BTIG in late May with a price target of $40, implying significant upside potential. The share price of the hydrogen fuel cell firm jumped close to 1.6% after the ratings update.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm DE Shaw is a leading shareholder in Plug Power Inc. (NASDAQ: PLUG) with 12 million shares worth more than $433 million.
Just like Apple Inc. (NASDAQ: AAPL), Shopify Inc. (NYSE: SHOP), and Micron Technology (NASDAQ: MU), Plug Power Inc. (NASDAQ: PLUG) is one of the best upside stocks to buy right now.
In its Q2 2020 investor letter, Massif Capital, an asset management firm, highlighted a few stocks and Plug Power Inc. (NASDAQ: PLUG) was one of them. Here is what the fund said:
“We also closed our short position in Plug Power this quarter as the market was subsumed with enthusiasm over their recent acquisitions, resulting in an almost 80% rally in the stock over ten trading days. Our decision to exit was painful at the time as we were forced to reconcile with a collective exuberance that was (and is, in our opinion) not grounded reality. In hindsight, it was the correct decision as we avoided most of its recent vertical trajectory.”
8. Twilio Inc. (NYSE: TWLO)
Number of Hedge Fund Holders: 99
Twilio Inc. (NYSE: TWLO) is a California-based company that offers cloud-based communications services. It was founded in 2008 and is placed eighth on our list of 10 best upside stocks to buy right now. The company’s shares have returned more than 56% to investors in the past twelve months The cloud platform that the company markets lets users make or receive phone calls, send text messages, and perform other functions using the web services of Twilio.
On May 27, Twilio Inc. (NYSE: TWLO) stock was given a Buy rating by investment advisory UBS, with the advisory forecasting that the cloud communications firm was slated to grow revenue by more than 30% for the next several years.
Out of the hedge funds being tracked by Insider Monkey, California-based investment firm SCGE Management is a leading shareholder in Twilio Inc. (NYSE: TWLO) with 2.7 million shares worth more than $948 million.
Just like Apple Inc. (NASDAQ: AAPL), Shopify Inc. (NYSE: SHOP), and Micron Technology (NASDAQ: MU), Twilio Inc. (NYSE: TWLO) is one of the best upside stocks to buy right now.
7. Barrick Gold Corporation (NYSE: GOLD)
Number of Hedge Fund Holders: 49
Barrick Gold Corporation (NYSE: GOLD) is a Canada-based mining company that primarily mines for gold and copper. It was founded in 1983 and is ranked seventh on our list of 10 best upside stocks to buy right now. The firm has operations at more than 16 sites in 13 different countries, including Argentina, Canada, Ivory Coast, the Democratic Republic of Congo, Dominican Republic, Mali, Tanzania, Chile, Saudi Arabia, Zambia, and the United States, among a few others.
Barrick Gold Corporation (NYSE: GOLD) stock has soared in recent weeks as mining operations slowly resume and gold gains amid broader selloffs in the market. In earnings results for the first quarter of 2021, the firm posted earnings per share of $0.29, beating market estimates by $0.02.
Out of the hedge funds being tracked by Insider Monkey, investment firm First Eagle Investment Management is a leading shareholder in Barrick Gold Corporation (NYSE: GOLD) with 27 million shares worth more than $534 million.
Just like Apple Inc. (NASDAQ: AAPL), Shopify Inc. (NYSE: SHOP), and Micron Technology (NASDAQ: MU), Barrick Gold Corporation (NYSE: GOLD) is one of the best upside stocks to buy right now.
In its Q4 2020 investor letter, GoodHaven Capital Management, an asset management firm, highlighted a few stocks and Barrick Gold Corporation (NYSE: GOLD) was one of them. Here is what the fund said:
“Barrick’s recent results have been consistent with our expectations. Barrick has begun inching up the dividend as planned, which should continue increasing absent them finding a large acquisition (they want more copper assets) or a materially lower price of gold. We’d also expect periodic special dividends during stronger gold price environments. At current gold prices we estimate normalized free cash flow at Barrick of over $1.60/share. The company is now about net-debt free. We see plenty of upside and absent a collapse in gold not too much downside. Missing from much of the public discussions about gold, but potentially interesting, is the supply/demand backdrop. As the Wall Street Journal (8/16/20) recently said “gold is amongst the rarest metals in the earth’s crust and much of the easier to get to ore has already been mined. What is left is harder to find and more expensive to extract…” According to the World Platinum Council, it was forecasted that there will be a supply and demand imbalance of 1.2 million ounces globally. The potential macro tailwinds that could add value to an alternate currency like gold including currency concerns, excessive debt and continuing negative real interest rates are still out there. While the shares performed well for the year they were weak in the second half and now stand more attractively priced.”
6. Match Group, Inc. (NASDAQ: MTCH)
Number of Hedge Fund Holders: 68
Match Group, Inc. (NASDAQ: MTCH) is a Texas-based online dating service firm founded in 2009. It is placed sixth on our list of 10 best upside stocks to buy right now. The stock has offered investors returns of close to 2.5% over the past week. Some of the popular dating services owned by the firm include Tinder, Match.com, Meetic, OkCupid, Hinge, PlentyOfFish, Ship, and OurTime, among others. The company owns over 45 such dating firms across the globe. It has more than 1,500 employees.
On May 4, Match Group, Inc. (NASDAQ: MTCH) posted earnings results for the first quarter of 2021, reporting earnings per share of $0.57, beating market predictions by $0.19. The revenue over the period was over $667 million, up 22.6% year-on-year.
At the end of the first quarter of 2021, 68 hedge funds in the database of Insider Monkey held stakes worth $2.9 billion in Match Group, Inc. (NASDAQ: MTCH), down from 72 in the preceding quarter worth $3.7 billion.
Just like Apple Inc. (NASDAQ: AAPL), Shopify Inc. (NYSE: SHOP) and Micron Technology (NASDAQ: MU), Match Group, Inc. (NASDAQ: MTCH) is one of the best upside stocks to buy right now.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Match Group, Inc. (NASDAQ: MTCH) was one of them. Here is what the fund said:
“In addition to the new issue market, we have been tactically adding growth exposure. Our largest new position was Match Group, the global leader in the online dating space that was spun off by Interactive Corp. in 2020. Singles have put their life plans on hold during the pandemic but continue to want to meet people. Match was negative impacted by COVID, especially in markets like India, but the business is very profitable with high margins and is driving growth through international expansion, increasing users and better monetization and engagement.”
5. QUALCOMM Incorporated (NASDAQ: QCOM)
Number of Hedge Fund Holders: 73
QUALCOMM Incorporated (NASDAQ: QCOM) is a California-based semiconductor manufacturing company. It was founded in 1985 and is ranked fifth on our list of 10 best upside stocks to buy right now. The stock has returned more than 47% to investors over the course of the past twelve months. The products marketed by the company are used in mobile devices, computers, as well as 5G infrastructure across the globe.The company also offers other software and services related to wireless technology.
On April 28, QUALCOMM Incorporated (NASDAQ: QCOM) reported earnings results for the second fiscal quarter, posting earnings per share of $1.90, beating market predictions by $0.23. The revenue over the period was close to $8 billion, up 52% year-on-year.
Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in QUALCOMM Incorporated (NASDAQ: QCOM) with 3.5 million shares worth more than $472 million.
In its Q1 2021 investor letter, Alger, an asset management firm, highlighted a few stocks and QUALCOMM Incorporated (NASDAQ: QCOM) was one of them. Here is what the fund said:
“Long position Qualcomm Inc. were among the top detractors from performance. Qualcomm is a leading semiconductor company with strong positions in telecommunications end markets that position the company as a primary beneficiary of the innovative 5G network standard roll out. Qualcomm is acknowledged as having the best technology specs for 5G chip sets as evidenced by signing up all 75 major OEMs including Apple. Additionally, beyond handsets, Qualcomm has meaningful growth drivers, including the Internet of Things, automobiles, industrials and gaming that provide the company with potential for generating increased earnings.
While Qualcomm was a notable positive contributor to the portfolio’s absolute and relative returns in 2020, during the first quarter, the share price declined and the position detracted from performance. Market demand for chips has been strong; however, Qualcomm hasn’t been able to fully exploit the demand as it is capacity constrained. Expectations were high for Qualcomm and while the quarter generally exceeded consensus estimates and forward estimates did rise, the street was anticipating a stronger positive surprise. We believe the production capacity constraints should abate in the second half of this year.”
4. Apple Inc. (NASDAQ: AAPL)
Number of Hedge Fund Holders: 127
Apple Inc. (NASDAQ: AAPL) is a California-based technology firm. It is placed fourth on our list of 10 best upside stocks to buy right now. The company’s shares have offered investors returns exceeding 43% over the past twelve months. Apple makes and sells consumer electronics, software, and online services. It is the largest technology company in the world in terms of market capitalization. It posted more than 270 billion in annual revenue last year. The company is reportedly also investing heavily in driverless and clean energy automotive.
Apple Inc. (NASDAQ: AAPL) posted earnings results for the second fiscal quarter on April 28, reporting earnings per share of $1.40, beating market predictions by $0.42. The revenue over the period was close to $90 billion, up 53% year-on-year.
At the end of the first quarter of 2021, 127 hedge funds in the database of Insider Monkey held stakes worth $130 billion in Apple Inc. (NASDAQ: AAPL), down from 146 in the preceding quarter worth $142 billion.
In its Q1 2021 investor letter, Distillate Capital, an asset management firm, highlighted a few stocks and Apple Inc. (NASDAQ: AAPL) was one of them. Here is what the fund said:
“Apple is an even more notable situation and one that highlights our free cash valuation methodology and bears further discussion given its Q3 ‘20 sale from our strategy. For an extended period, Apple was extraordinarily inexpensive on a free cash flow basis and was the largest position in our strategy, exceeding 5% of the portfolio.”
3. Shopify Inc. (NYSE: SHOP)
Number of Hedge Fund Holders: 91
Shopify Inc. (NYSE: SHOP) is a Canada-based ecommerce firm. It was founded in 2006 and is ranked third on our list of 10 best upside stocks to buy right now. The company’s shares have offered investors returns exceeding 65% over the course of the past twelve months. The firm provides businesses with various sales channels, including online stores, mobile platforms, physical retail, social media storefronts, mobile-based applications, and others. It also offers inventory and payments services.
On April 28, Shopify Inc. (NYSE: SHOP) reported earnings for the first three months of 2021, posting earnings per share of $2.01, beating market predictions by $1.26. The revenue over the period was more than $988 million, up 110% year-on-year.
Out of the hedge funds being tracked by Insider Monkey, Connecticut-based investment firm Lone Pine Capital is a leading shareholder in Shopify Inc. (NYSE: SHOP) with 1.7 million shares worth more than $1.8 billion.
In its Q4 2020 investor letter, RGA Investment Advisors, an asset management firm, highlighted a few stocks and Shopify Inc. (NYSE: SHOP) was one of them. Here is what the fund said:
“While we are pleased with the results of these specific purchases, we made a huge mistake of omission at that time. This mistake will likely be one of the biggest we ever make in our careers. Specifically, we did deep work on Shopify and loved everything about the business qualitatively. Unfortunately, we ultimately found ourselves unable to get comfortable with the numbers.
We built our model up from the key performance indicators (KPIs) that drive revenues. Our last save of the model dated 8/3/2016 looked as follows: (Page 2). These numbers seemed right from everything we understood about the company. While we tend not to rely on sell-side consensus estimates before finishing our own workup of the business, we do give them a look once we feel comfortable with how we have approached our analysis as it is often helpful to get a sense of what the average participant in the market expects the business to do. With Shopify, the sell-side consensus was so far from where our numbers were shaking out, it seemed almost impossible that we were basing our analysis on the same underlying information. Our natural next step was thus to take the sell-side consensus data and work backwards to figure out the implied expectations on each of the key revenue drivers. Here is what the sell-side consensus looked like as at the time: (Page 2).
Shopify’s actual revenues for 2016-2018 ended up being $389m, $673m and $1,073m. In other words, not only were we justifiably far more optimistic than the consensus estimate, but we also were far too conservative in terms of how the company actually performed...” (read the complete letter here)
2. Suncor Energy Inc. (NYSE: SU)
Number of Hedge Fund Holders: 33
Suncor Energy Inc. (NYSE: SU) is a Canada-based energy company. It was founded in 1917 and is placed second on our list of 10 best upside stocks to buy right now. The company mines and refines oil and markets petroleum products. It also trades in natural gas and related products. Suncor has been stepping up investments in the clean energy business in recent years, especially in wind farms. It has a market cap of over $38 billion and posted more than $19 billion in revenue in 2020.
On May 4, Suncor Energy Inc. (NYSE: SU) posted earnings results for the first quarter, reporting earnings per share of C$0.49, beating market estimates by C$0.09. On May 3, the firm declared a quarterly dividend of C$0.21 per share, in line with previous.
At the end of the first quarter of 2021, 33 hedge funds in the database of Insider Monkey held stakes worth $1 billion in Suncor Energy Inc. (NYSE: SU), up from 25 in the preceding quarter worth $686 million.
In its Q2 2020 investor letter, Brown Advisory, an asset management firm, highlighted a few stocks and Suncor Energy Inc. (NYSE: SU) was one of them. Here is what the fund said:
“We eliminated our small holding in Cimarex Energy in favor of consolidating our oil-related investments by adding to existing holding Suncor Energy, which we believe is a stronger company to own with oil prices at a historic low.”
1. Micron Technology (NASDAQ: MU)
Number of Hedge Fund Holders: 100
Micron Technology (NASDAQ: MU) is an Idaho-based firm that makes and sells memory storage equipment used in electronic devices. It is ranked first on our list of 10 best upside stocks to buy right now. The stock has returned more than 51% to investors over the past year. Some of the products sold by the firm include random access memory, flash memory, portable storage devices, and others. The products made by the firm are used by cloud servers, graphics companies, and networking clients.
In earnings results for the second fiscal quarter, posted on March 31, Micron Technology (NASDAQ: MU) reported earnings per share of $0.98, topping market predictions by $0.03. The revenue over the period was more than $6 billion, up 30% year-on-year.
At the end of the first quarter of 2021, 100 hedge funds in the database of Insider Monkey held stakes worth $7.6 billion in Micron Technology (NASDAQ: MU), the same as in the preceding quarter worth $8.1 billion.
In its Q1 2021 investor letter, Bonsai Partners, an asset management firm, highlighted a few stocks and Micron Technology (NASDAQ: MU) was one of them. Here is what the fund said:
“Micron is a manufacturer of memory semiconductor chips. Micron appreciated 17.3% during the quarter.
With the semiconductor cycle in full swing, sentiment continued to improve for major DRAM and NAND suppliers. Spot pricing for DRAM continues its upward march due to supply shocks across the industry and sustained demand levels that continue to outstrip supply.
As a result, Micron showed improving results for the fiscal first quarter, raised guidance intra-quarter for the fiscal second quarter, and offered strong guidance for the fiscal third quarter in both growth and margins.
While the cyclical nature of DRAM hasn’t changed, the cycles themselves continue to become more benign, leading to long-term economic improvement across these businesses. Micron is now continuously profitable, with industry players in a dramatically stronger position than even just five years ago.
The biggest negative surprise in the quarter came from Micron’s exit from its 3D XPoint hybrid memory business. The company also announced its decision to sell its accompanying Utah fab. Fortunately, this development does not alter the investment thesis much since 3D XPoint was an option ticket for future growth. While it’s unfortunate this product didn’t pan out, now is an excellent time to sell a fab, so perhaps it is a blessing in disguise?”
You can also take a peek at Billionaire Stan Druckenmiller’s Top 10 Stock Picks and Billionaire Julian Robertson On Interest Rates and His Top Stock Picks For 2021.
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Disclose. None. 10 Best Upside Stocks to Buy Right Now is originally published on Insider Monkey.
