In this piece, we will take a look at the 12 stocks with the potential to skyrocket. If you want to skip our overview of the current investment climate, then take a look at 5 Stocks that Could Skyrocket.
As the fourth and final quarter of 2023 settles in, it’s clear that markets and the global economic and political environment are in no mood to let investors and analysts breathe easy. Since the start of last year, markets have been in a consistent state of turmoil, with one development or the other shocking stocks and making them drop by the double digits. As 2022 started, the post pandemic inflation, further fueled by the Russian invasion of Ukraine, forced the Federal Bank to jump into action and rapidly raise interest rates. Such a move depresses stocks as capital flows to other markets such as the money market, and investors become pessimistic about the broader economic climate.
Then, as 2023 kicked off, there was some hope in markets. Doomsday calls of a recession echoed by nearly every major quarter of Wall Street did not materialize, and the economy kept on growing. This was followed by a massive hype surrounding artificial intelligence companies, which injected steroids into the share prices of big technology stocks and sent the NASDAQ 100 index to record highs.
However, even as investors were scratching their heads and asking ‘Where’s the recession’? the economy was in no mood to provide any relief. While the GDP continued to grow first during the first quarter and then in the second quarter, the labor and job market also continued to prove to be a tough nut to crack even as inflation started to moderate. This created fresh uncertainty about the direction of the Fed’s future monetary policy decisions since the central bank had been explicit in stating that one of its primary aims behind increasing interest rates was to cool down the labor market. A cooler labor market sees salaries drop, which leaves lesser discretionary income for consumers to spend, which then ends up reducing demand for products and making prices come down.
These worries about additional interest rate hikes in the fourth quarter provided the financial world with its second turmoil of the year. The first was in March when large and major U.S. banks rapidly collapsed in quick succession and led to shock among officials of the U.S. government and Wall Street. The second crisis came when Treasury yields soared to levels last seen before the 2008 financial crisis, creating worries that a rout in the bond market could have broader economic implications.
As the bond market was shaking, there was even more uncertainty in store for everyone. The Republican member of Congress Kevin McCarthy (R-CA) was suddenly ousted from his position as House speaker just days after some Republicans and Democrats hurriedly passed a bill to prevent a government shutdown. Fate, it seemed, was not interested in making the road to returns clear for stock market investors. Yet, even this was not enough chaos, as just as members of the Republican Party gathered together to decide what was next in their bid to control the House, war broke out in the Middle East as Hamas launched a surprise attack on Israel from the Gaza Strip which saw it indiscriminately kill civilians as it vowed revenge for Israeli actions in Jerusalem.
War is never good for the stock market (or anything else), or at least some stocks. With the war in the Middle East, particularly given Israel and Palestine’s location, there is a big risk of a major shock to global supply chains. This is because a large portion of global shipments take the short route from the Suez Canal controlled by Egypt – which neighbors both Israel and Palestine. Crude oil responded to this turmoil as prices shot up temporarily, and analysts began to wonder about the future of the oil industry should the United States join yet another war and turn its guns on Iran.
Amidst all this turmoil, there was at least one silver lining. This breath of fresh air came in the form of investors’ reaction to the Labor Department’s Producer Price Index (PPI) data for September. The data released showed that high crude oil prices pushed energy costs higher for manufacturers, with the overall PPI and core PPI jumping by 2.2% and 2.8% on an annual basis, respectively. Inflation, as you’re likely to know by now, has become the boogeyman of Wall Street as of late; however, investors shrugged this off as the S&P500 closed higher by 18 points while the NASDAQ 100 and the Dow Jones Industrial Average (DJIA) also gained 109 points and 65 points, respectively. Investors, it seems, believe that inflation might not remain relevant to the market for much longer.
So how does one invest in these historic times? Well, we took a look at some stocks that can explode in returns, and the top picks are Arista Networks, Inc. (NYSE:ANET), Deere & Company (NYSE:DE), and Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM).
Copyright: alphaspirit / 123RF Stock Photo
Our Methodology
To compile our list of the stocks that have the potential to explode, we used the latest stocks shared by StockGumshoe – a website that identifies top stock picks of investment newsletters. The stocks are ranked by the number of hedge funds that had invested in them during Q2 2023 courtesy of data from Insider Monkey’s database of 910 hedge funds.
12 Stocks with the Potential to Explode
12. Black Stone Minerals, L.P. (NYSE:BSM)
Number of Hedge Fund Investors in Q2 2023: 8
Date of Newsletter: September 27, 2023
Title of Newsletter: Porter’s “Big AI Die Up” stocks
Black Stone Minerals, L.P. (NYSE:BSM) is an American firm headquartered in Texas and set up in 1876. The firm owns interests in oil and gas producing properties. Piper Sandler and Raymond James cover the stock and have rated it as Neutral and Outperform, respectively.
During Q2 2023, eight out of the 910 hedge funds part of Insider Monkey’s database had held a stake in Black Stone Minerals, L.P. (NYSE:BSM). Out of these, the largest shareholder is Thomas Clay’s Epacria Capital Partners which owns 578,149 shares that are worth $9.2 million.
Black Stone Minerals, L.P. (NYSE:BSM) joins Deere & Company (NYSE:DE), Arista Networks, Inc. (NYSE:ANET), and Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in our list of stocks with the potential to explode.
11. Tellurian Inc. (NYSE:TELL)
Number of Hedge Fund Investors in Q2 2023: 9
Date of Newsletter: September 27, 2023
Title of Newsletter: Porter’s “Big AI Die Up” stocks
Tellurian Inc. (NYSE:TELL) is another energy company with tens of thousands of acres of natural gas property in Louisiana. The firm had some bad news for investors in October 2023, as it sought a three year extension to complete its Louisiana LNG plant.
By the end of this year’s second quarter, nine out of the 910 hedge funds researched by Insider Monkey were the firm’s investors. Tellurian Inc. (NYSE:TELL)’s biggest hedge fund investor is D. E. Shaw’s D E Shaw courtesy of its $12.2 million stake.
10. Viper Energy Partners LP (NASDAQ:VNOM)
Number of Hedge Fund Investors in Q2 2023: 10
Date of Newsletter: September 27, 2023
Title of Newsletter: Porter’s “Big AI Die Up” stocks
Viper Energy Partners LP (NASDAQ:VNOM) is an American oil company headquartered in Midland, Texas. Wall Street analysts are quite optimistic about the firm’s prospects, as they have rated the shares as a Strong Buy on average and priced in an approximate $9 share price upside.
Ten out of the 910 hedge funds part of Insider Monkey’s June quarter of 2023 research had bought and owned Viper Energy Partners LP (NASDAQ:VNOM)’s shares. Murray Stahl’s Horizon Asset Management is the biggest shareholder among these since it owns $48.5 million worth of shares.
9. Exscientia plc (NASDAQ:EXAI)
Number of Hedge Fund Investors in Q2 2023: 11
Date of Newsletter: October 17, 2023
Title of Newsletter: Answers: “Kansas Welder” Story Leads to… Company Alex Green Believes “will become the most important AI company in the world”
Exscientia plc (NASDAQ:EXAI) is a biotechnology company headquartered in Oxford, the United Kingdom. It’s one of the few stocks on our list that has a majority ownership of retail investors, who own more than 70% of the shares.
After digging through 910 hedge fund portfolios for this year’s second quarter, Insider Monkey discovered that 11 had held a stake in the company. Exscientia plc (NASDAQ:EXAI)’s largest investor in our database is Benjamin A. Smith’s Laurion Capital Management , owning 5.9 million shares that are worth $35.4 million.
8. BWX Technologies, Inc. (NYSE:BWXT)
Number of Hedge Fund Investors in Q2 2023: 27
Date of Newsletter: October 4, 2023
Title of Newsletter: Answers: Whitney Tilson’s Seven “Secret Project E-92” Stocks
BWX Technologies, Inc. (NYSE:BWXT) is an industrial grade nuclear products provider headquartered in Lynchburg, Virginia. It sells a variety of different products such as nuclear reactors and missile launch tubes for the U.S. Navy. BWX Technologies, Inc. (NYSE:BWXT) expertise in this area has also seen it partner up with NASA to develop nuclear propulsion systems for space travel.
Insider Monkey took a look at 910 hedge fund holdings for 2023’s June quarter and found that 27 were BWX Technologies, Inc. (NYSE:BWXT)’s shareholders. Out of these, Amy Minella’s Cardinal Capital owns the biggest stake which is worth $108 million.
7. Peabody Energy Corporation (NYSE:BTU)
Number of Hedge Fund Investors in Q2 2023: 28
Date of Newsletter: September 27, 2023
Title of Newsletter: Porter’s “Big AI Die Up” stocks
Peabody Energy Corporation (NYSE:BTU) is one of the biggest coal companies in the world. The 2022 Russian invasion of Ukraine injected fresh life into its stock, as demand for coal soared due to Russian oil sanctions.
As of June 2023, 28 out of the 910 hedge funds part of Insider Monkey’s database had bought and owned the firm’s shares. Paul Singer’s Elliott Management leads the pack among these, owning 21 million shares that are worth $457 million.
6. Albemarle Corporation (NYSE:ALB)
Number of Hedge Fund Investors in Q2 2023: 41
Date of Newsletter: September 21, 2023
Title of Newsletter: Brad Thomas teases “Biden’s Secret MAGA Deal for… up to 340% Gains”
Albemarle Corporation (NYSE:ALB) is one of the biggest chemicals companies and lithium providers in the world. The firm’s investors were in for some potentially bad news in October, as it was revealed that Australia’s richest woman Gina Rinehart had built a 19.9% stake in a firm that Albemarle Corporation (NYSE:ALB) is seeking to takeover.
41 out of the 910 hedge funds part of Insider Monkey’s Q2 2023 database were Albemarle Corporation (NYSE:ALB)’s stakeholders. Philippe Laffont’s Coatue Managementis the largest investor out of these due to its $154 million investment.
Arista Networks, Inc. (NYSE:ANET), Albemarle Corporation (NYSE:ALB), Deere & Company (NYSE:DE), and Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) are some stocks with explosive potential.
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Disclosure: None. 12 Stocks with the Potential to Explode is originally published on Insider Monkey.