In this article we present the list of 11 Best Day Trading Stocks To Buy.
Tesla, Inc. (NASDAQ:TSLA), Halliburton Company (NYSE:HAL), and Advanced Micro Devices, Inc (NASDAQ:AMD) are a few of the stocks that day traders should consider monitoring daily, as they’re all heavily traded and prone to wild price swings.
With the wealth of technical analysis now available to the average investor through many sites and the ease of performing trades instantly online through various investment platforms or banks, day trading has soared in popularity, with many people making careers out of the practice.
Day trading consists of buying into and selling out of stocks during the same day, with the goal being to exploit brief periods of volatility in stocks to make a profit. Given that, day traders typically play stocks with a high beta, or volatility, which means they are likely to see wider swings during a typical trading session than the average stock, and therefore offer greater profit potential for day traders.
In addition to volatility, the best day trading stocks are also those which are heavily traded, which likewise increases the likelihood that those stocks will experience greater price swings during any given period of time.
Other top stocks for day traders include those that are “in play” on any given day, usually fueled by a specific catalyst. These stocks tend to trend in one direction throughout the day on higher than usual volumes, making them ripe for profiting off of even after the initial surge. Needless to say, day traders have a lot to pay attention to each day and plenty of opportunities to make money.
Naturally, we can’t know which stocks will trend on any given day, but we can look at the historical trading activity of stocks to determine which ones are likely to provide opportunities on any given day, regardless of external catalysts.
The following list comprises 11 such stocks, all of which have average 3-month daily trading volumes of over 10 million and 5-year monthly betas of at least 2, making them at least twice as volatile as the average stock.
Our Methodology
The following best day trading stocks are ranked based on hedge fund sentiment. We follow a select group of hedge funds because Insider Monkey’s research has uncovered that their consensus stock picks can deliver outstanding returns.
All hedge fund data is based on the exclusive group of 900+ funds tracked by Insider Monkey that filed 13Fs for the Q2 2022 reporting period.
11 Best Day Trading Stocks To Buy
11. Canopy Growth Corporation (NYSE:CGC)
Number of Hedge Fund Shareholders: 12
Average 3-Month Daily Volume: 11.9 million
5-Year Monthly Beta: 2.02
Advanced Micro Devices, Inc (NASDAQ:AMD), Tesla, Inc. (NASDAQ:TSLA), and Halliburton Company (NYSE:HAL) are some of the best stocks for day traders to consider playing, as they feature high betas and daily trading volumes. Another is medical marijuana producer Canopy Growth Corporation (NYSE:CGC), shares of which are down by 69% this year.
Canopy Growth Corporation (NYSE:CGC) represents a cautionary tale when it comes to the explosive growth that was once expected of the marijuana industry and many of its players. The company’s revenue fell by 19% during its Q1 of fiscal year 2023, and is down by 8% over the past three years. If not for the company’s rapidly growing BioSteel sports beverage line (which has no marijuana component), the company’s sales declines would be even worse. Canopy Growth has also failed to grow its margins over the years, even as it’s shifting its product mix to more premium items.
Hedge fund ownership of Canopy Growth Corporation (NYSE:CGC) has fallen during each of the last three quarters and by 37% overall since the end of 2020. Several of the largest long positions in the stock also happen to consist of put options, which means several funds are banking on CGC shares tumbling even further in the future.
10. Carnival Corporation & plc (NYSE:CCL)
Number of Hedge Fund Shareholders: 24
Average 3-Month Daily Volume: 60.1 million
5-Year Monthly Beta: 2.06
Carnival Corporation & plc (NYSE:CCL) is the owner and operator of a fleet of cruise ships, which are just now beginning to return to nearly full capacity, hitting 95% during the September quarter. Shares nonetheless remain near two-decade lows as the company continues to slog its way through its current debt woes towards what is expected to be an eventual return to profitability. Carnival recently upsized its latest debt issuance, offering $2.03 billion in senior priority notes as opposed to the anticipated $1.25 billion worth.
Hedge fund ownership of Carnival Corporation & plc (NYSE:CCL) fell to an all-time low at the end of Q2 and has fallen by 49% since the end of 2020. Paul Tudor Jones’ Tudor Investment Corp and Sander Gerber’s Hudson Bay Capital Management were a couple of the funds to unload their CCL stakes during Q2.
Despite not owning the stock, Miller Value Partners expressed surprise that Carnival Corporation & plc (NYSE:CCL) had fallen beneath its March 2020 lows (where it yet remains), as detailed in the fund’s Q2 2022 investor letter:
“Amazingly, some companies like Carnival Corporation & plc (NYSE:CCL) (CCL, which we don’t own) made it back to its March 2020 lows when business was shut down with no sign of return. Carnival already resumed positive operating cash flow generation and disclosed stronger than historical bookings for 2023 at higher prices. The market focused on fear of recession and refinancing risk posed by higher rates.”
9. XPeng Inc. (NYSE:XPEV)
Number of Hedge Fund Shareholders: 24
Average 3-Month Daily Volume: 18.3 million
5-Year Monthly Beta: 3.34
XPeng Inc. (NYSE:XPEV) designs and manufactures smart electric vehicles and parts, as well as electric vertical take-off and landing aircraft through its affiliate XPENG AEROHT. The latter company just completed the first public flight of its XPENG X2 flying car earlier this month in Dubai. The two-seat carbon fiber vehicle is equipped with both autonomous driving and flying capabilities. XPeng manufactures its vehicles at a fully-owned plant in Zhaoqing, and is in the process of building two additional production plants in China.
While XPeng Inc. (NYSE:XPEV) is in the process of developing some impressive vehicles, its second quarter results left something to be desired. Sales were up 97% year-over-year to $1.1 billion thanks to the introduction of the P5 sedan during the previous year, but were flat sequentially. Meanwhile, vehicle margins slid by 190 basis points to 9.1% and the company’s net loss more than doubled to $403 million.
Hedge fund ownership of XPeng Inc. (NYSE:XPEV) has ticked down by 23% over the past two quarters, which could have as much or more to do with it being a Chinese stock as opposed to the firm’s own fundamentals. Nonetheless, one of the company’s biggest rock star bulls, Cathie Wood’s ARK Investment Management, also sold off its XPEV stake during Q3.
8. NIO Inc. (NYSE:NIO)
Number of Hedge Fund Shareholders: 25
Average 3-Month Daily Volume: 44.1 million
5-Year Monthly Beta: 2.0
NIO Inc. (NYSE:NIO) is yet another Chinese EV stock that features on this list, and one of three EV makers in total, as stocks in the sector remain highly intriguing to investors, but extremely volatile. NIO, which manufactures EVs and parts, as well as EV charging stations, grew deliveries by 29% during Q3, though that included the first shipments of its ET5 sedan. There are broader concerns that the Chinese EV market may be experiencing weakness given Tesla’s move to cut prices there, in addition to Xpeng’s flat sales quarter-over-quarter. NIO’s net loss also widened during Q2, hitting $412 million.
Like XPEV, hedge fund ownership of NIO has also dipped by 23% over the past two quarters. On the other hand, while she sold off her fund’s stake in XPEV during Q3, Cathie Wood held on to ARK’s position in NIO Inc. (NYSE:NIO) during the quarter, though trimming it by 7%. Andrew Dalrymple and Barry McCorkell’s Aubrey Capital Management also hiked its position in NIO by 18% during the quarter to 751,000 shares.
Horos Asset Management discussed the Chinese regulatory environment as it relates to NIO Inc. (NYSE:NIO) and other U.S.-listed Chinese stocks in the fund’s Q1 2022 investor letter:
“At the beginning of April the CSRC (China Securities Regulatory Commission) announced possible changes in its regulation that would allow this inspection by foreign auditors, provided that the companies previously communicate to this body the state secrets that would be exposed, as well as the sensitive information that they might have to hand over, and the subsequent audit is carried out in a framework of collaboration with the CSRC. In short, a move in the direction desired by the SEC, although still far from the optimal result, that is, unrestricted access to information. While these negotiations between the two regulatory bodies are progressing, Chinese companies have to decide how best to preserve their interests. Other entities, such as the electric vehicle manufacturer Nio, have just started trading on this stock market.”
7. Palantir Technologies Inc. (NYSE:PLTR)
Number of Hedge Fund Shareholders: 26
Average 3-Month Daily Volume: 35.7 million
5-Year Monthly Beta: 3.3
Palantir Technologies Inc. (NYSE:PLTR) operates two data analytics platforms, one which primarily serves government customers, and one which serves commercial enterprises. The company’s stock was aggressively bid up during its first few months on the market, topping $35 per share, but has since crashed to just $8.54.
Investors are now unwilling to overlook the company’s slowing growth, particularly in its government business, which has fallen from 66% year-over-year growth to just 13% in the span of five quarters. The company’s operating margin has trended down during that time as well, falling from 31% to 23%. While CEO Alex Karp projects revenue growth to re-accelerate slightly over the next few years, hitting $4.5 billion by 2025, analysts aren’t as bullish, projecting just $2.37 billion in sales next year.
Hedge fund ownership of Palantir Technologies Inc. (NYSE:PLTR) slumped by 27% during Q2 to hit its lowest level since the company’s September 2020 IPO. Cathie Wood’s ARK Investment Management sold off 60% of its PLTR position during Q3 while Paul Marshall and Ian Wace’s Marshall Wace LLP unloaded its entire stake in the company during Q2.
Tao Value also unloaded its Palantir Technologies Inc. (NYSE:PLTR) holding within the last year, noting in its Q4 2021 investor letter that it felt the stock was a bubble risk:
“We have no new position this quarter and have made below changes to our portfolio. We also sold Palantir (PLTR) as I identified it subject to high retail bubble risk (using above method) and are not
part of our core “Mindful Compounder” holdings.”
6. Transocean Ltd (NYSE:RIG)
Number of Hedge Fund Shareholders: 28
Average 3-Month Daily Volume: 22.2 million
5-Year Monthly Beta: 2.76
Transocean Ltd (NYSE:RIG) is an offshore drilling provider that specializes in operating rigs in deepwater and other challenging environments. Given its substantial debt load of over $7 billion and the fact the company remains unprofitable, it’s a risky stock to own even in a strong oil price environment, but the upside potential is driving volatility in the stock, making it a great day trading stock to play.
RIG shares have been extremely volatile this year, being up by over 50% at one point, but slumping heavily later in the year to be down by over 20% year-to-date at that point. They’re currently trending up again and are 19% in the green in 2022.
The smart money has been buying into Transocean Ltd (NYSE:RIG) more frequently in recent quarters, pushing ownership of the stock up by 74% since the end of 2020. Dmitry Balyasny’s Balyasny Asset Management owns the largest long position of 30 million shares, while Joe Dimenna’s ZWEIG DIMENNA PARTNERS added RIG to its 13F portfolio during Q2.
Halliburton Company (NYSE:HAL), Advanced Micro Devices, Inc (NASDAQ:AMD), and Tesla, Inc. (NASDAQ:TSLA) rank among the best stocks to buy for day traders. We’ll check them out in the second half of this article, linked to below.
5. Norwegian Cruise Line Holdings Ltd. (NASDAQ:NCLH)
Number of Hedge Fund Shareholders: 28
Average 3-Month Daily Volume: 21.8 million
5-Year Monthly Beta: 2.33
Norwegian Cruise Line Holdings Ltd. (NASDAQ:NCLH) is another cruise line operator that’s proven to be a great day trading stock in recent years. Despite how beaten down Norwegian’s stock is, the company is in a good place in terms of bookings, with record demand lined up for the company’s fiscal 2023. Norwegian operates 29 vessels across three brands and more exposure to the luxury side of the market than rival Carnival, which might explain why hedge funds have been favoring it over CCL during the past two years.
Hedge fund ownership of Norwegian Cruise Line Holdings Ltd. (NASDAQ:NCLH) hasn’t fallen as steeply in recent quarters as it has in the case of Carnival Corporation & plc (NYSE:CCL), but is nonetheless down by 28% since the end of 2020. GLG Partners sold off all of its 633,093 NCLH shares during Q2.
Miller Value Partners Opportunity Equity, which maintained a long position in NCLH as of June 30, discussed some of Norwegian Cruise Line Holdings Ltd. (NASDAQ:NCLH) 2021 developments in the fund’s Q4 2021 investor letter:
“Norwegian Cruise Line Holdings Ltd (NCLH) continued to get hit from worsening headlines in relation to the Omicron variant. The stock declined 21.5% during the quarter following worse-than-expected 3Q results. The company reported revenues of $153M below consensus of $247M with EPS coming in at -$2.17 versus expectations for -$2.04. The company reported that 40% of its capacity was operating by the end of 3Q and they expect 75% to be operating by the end of 2021 with the full fleet back up and running by April 1, 2022. They also highlighted that they expect to be operating cash flow positive in late 1Q22 and profitable for the second half of 2022. The company announced a refinancing transaction, issuing $1Bn of new 1.125% exchangeable notes due 2027 and raising another $1.1Bn through the sale of 46.8M new shares at $23.64. Proceeds are being used to redeem up to $1.215Bn of debt with a blended interest rate of 8.1%, implying annual interest savings of $88M. The company was hit later in the quarter following CDC commentary that even vaccinated travelers should avoid cruises in addition to negative headlines around a new proposed carbon dioxide emission fee on ship owners. Based on Norwegian’s 2019 emissions, the proposed fee would be equal to 20% of NCLH’s Earnings Before Income and Taxes (EBIT) in 2019. The decision is not final and could take up to 2-years before countries decide to adopt the decision.”
4. Cleveland-Cliffs Inc. (NYSE:CLF)
Number of Hedge Fund Shareholders: 29
Average 3-Month Daily Volume: 12.9 million
5-Year Monthly Beta: 2.26
Cleveland-Cliffs Inc. (NYSE:CLF) is a manufacturer of various steel and carbon steel products, in addition to custom-made pellets and hot briquetted iron. As with many other manufacturing stocks, CLF shares have been volatile due to rising commodity prices and investor concerns about how an economic slowdown could impact demand. CLF shares are down by over 32% this year after being up by more than 50% at one point.
Cleveland-Cliffs Inc. (NYSE:CLF) pulled in $5.65 billion in revenue during Q3, missing estimates by $160 million, while its earnings of $0.29 per share was barely half the amount analysts were expecting. Demand from the automotive sector remains solid and the company expects costs to trend down during Q4 and into 2023, which could set its shares up for a rebound.
Hedge funds have been trading up a storm in Cleveland-Cliffs Inc. (NYSE:CLF) in recent quarters, as there was a 36% surge in ownership of the stock during Q1, followed by a 39% tumble in Q2. Ken Fisher’s Fisher Asset Management maintained the largest CLF position during Q2, owning 10.9 million shares.
3. Halliburton Company (NYSE:HAL)
Number of Hedge Fund Shareholders: 4
Average 3-Month Daily Volume: 10.1 million
5-Year Monthly Beta: 2.1
Oilfield services company Halliburton Company (NYSE:HAL) has been one of the biggest beneficiaries this year of a tapped out U.S. fracking market, which has the company poised to deliver strong profits, free cash flow, and growing margins for the foreseeable future. The company has already been able to pay down some of its debt this year while also more than doubling its dividend payouts.
For day traders, Halliburton Company (NYSE:HAL) makes for a compelling stock even during a potential prolonged upswing due to the ever-present volatility that oil prices provide, as well as the longer-term trend away from fossil fuels and towards clean energy, which will lie in weight to pounce on broader investor sentiment at any time.
The smart money has finally taken some interest in Halliburton Company (NYSE:HAL) again after several quarters of record low ownership. There was nearly a 50% jump in the number of shareholders long HAL during Q4 2021, which has been maintained over the following two quarters. Richard S. Pzena’s Pzena Investment Management has unloaded sizable portions of its HAL holding over each of the last two quarters to take advantage of the stock’s rise, but nonetheless maintained the largest long position in our database as of June 30, owning 16.7 million shares.
2. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Shareholders: 72
Average 3-Month Daily Volume: 72.2 million
5-Year Monthly Beta: 2.13
Ranking second is Tesla, Inc. (NASDAQ:TSLA), which is one of the most actively traded high-beta stocks on the market. After a tremendous run during 2020 and 2021, shares of the electric vehicle maker have cooled off considerably, falling by more than 40% from their peak.
Despite growing sales 8-fold between 2017 and 2021, Tesla, Inc. (NASDAQ:TSLA) still sold less than 1 million units last year, well below the figures of larger automakers. When coupled with the trend towards EVs, that gives the company an extended runway to continue growing, which could persist for many years, if not decades. While the long-term outlook for the company is bright, its valuation is likely to continue straddling the line between aggressive and pie-in-the-sky, which will continue to make it a target of short sellers and a great stock to day trade.
Tesla, Inc. (NASDAQ:TSLA) has never been a huge hit among the select group of hedge funds tracked by Insider Monkey’s database, but that changed somewhat during Q4, as ownership of the stock jumped by 44%. It’s since trended back down over each of the last two quarters, leaving the stock well outside the 30 most popular among hedge funds. Cathie Wood’s ARK Investment Management raised its stake in TSLA by 183% during Q3 to 4.08 million shares worth $1.08 billion on June 30.
Carillon Tower Advisers discussed some of Tesla, Inc. (NASDAQ:TSLA)’s planned moves in its Q2 2022 investor letter:
“Tesla, Inc. (NASDAQ:TSLA), the electric vehicle and clean energy company, is set to recall more than 100,000 cars in China over a potential safety risk and is reportedly delaying a plan to restore production at its Shanghai plant. CEO Elon Musk was reported to have said that the company would cut 10% of salaried staff and freeze hiring due to a bad feeling he has about the economy.”
1. Advanced Micro Devices, Inc (NASDAQ:AMD)
Number of Hedge Fund Shareholders: 87
Average 3-Month Daily Volume: 83.4 million
5-Year Monthly Beta: 2.05
Topping the list of best day trading stocks to buy is Advanced Micro Devices, Inc (NASDAQ:AMD), which has consistently been one of the most actively traded stocks on the market. It’s also a far more volatile stock than the offerings of other chipmakers.
AMD shares are down 60% from their peak as a substantially weakening PC market weighs on the company’s sales. In early October, AMD slashed its Q3 revenue estimate by more than $1 billion at the mid-point of its previous guidance range (which itself was already below analyst estimates), and lowered its gross margin expectations by 400 basis points.
Hedge fund ownership of Advanced Micro Devices, Inc (NASDAQ:AMD) has risen for four straight quarters, climbing by 38% during that time and making it the most popular chipmaker among hedge funds. Ken Fisher’s Fisher Asset Management owns a $1.92 billion stake in AMD as of June 30, holding 25.1 million shares.
The Baron Opportunity Fund is bullish on Advanced Micro Devices, Inc. (NASDAQ:AMD)’s opportunity to wrest further market share away from Intel Corporation (NASDAQ:INTC) and to grow its data center operations, as revealed in the fund’s Q2 2022 investor letter:
“Advanced Micro Devices, Inc. (NASDAQ:AMD) is a global fabless semiconductor company focusing on high-performance computing technology, software, and products. AMD designs leading high-performance central and graphics processing units (known as CPUs and GPUs) and integrates them with hardware and software to build differentiated solutions for customers.
AMD has been gaining meaningful share in personal computing and server end markets over the past several years driven by the performance of its processors and technology and strong execution against its technology roadmap, and we believe share gains will continue over the coming years from a combination of AMD’s continued advancements and Intel’s stumbles in developing its leading-edge technology.
Additionally, the recently closed acquisitions of Xilinx and Pensando enhance AMD’s positioning within the data center, a key growth engine for the semiconductor industry, and Xilinx specifically opens up several new growth opportunities in new end markets like industrial, automotive, and communications. The company also generates significant cash flow, giving it capital allocation optionality for further M&A and returning capital to shareholders.”
For more of the latest stock picks worth considering for your portfolio, check out the 11 Best Cement and Construction Materials Stocks To Buy Now and the Top 10 Small-Cap Stocks With Highest Upside Potential.
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Disclosure: None. 11 Best Day Trading Stocks To Buy is originally published at Insider Monkey.
