In this article, we discuss the 10 best booming stocks to buy now.
Despite predictions of an impending recession since mid-2022, the US economy has not shown any signs of a downturn in the past nine months. Factors such as increasing interest rates, high inflation, an inverted yield curve, and an unexpected banking crisis have all been cited as potential triggers for a recession. The New York Fed’s recession probability indicator, which is at its highest level in over four decades, suggests a 68.2% chance of a US recession within the next year. Other reliable economic indicators also indicate warning signs for the US economy. However, despite these factors, the labor market in the US remains strong, and economists have differing opinions on whether a recession is inevitable given the unique economic circumstances. Recession is a common occurrence in economic cycles and has historically presented attractive opportunities for long-term investors.
Although the first quarter showed strong performance, the forecast for real GDP growth is revised in 2023 to 0.9%. However, a recession is anticipated in the latter half of the year, which will drag down growth to 0.8% in 2024. The headline CPI inflation is expected to average 4.0% in 2023 before easing to 2.8% in 2024. As part of ongoing efforts to tighten credit, the Federal Reserve recently raised its policy rate once more to a range of 5.00-5.25%. This additional credit tightening is expected to result in 25-100 basis points of rate hikes and roughly a 0.25 percentage point decrease in real GDP growth in 2023. It is anticipated that the 10-year Treasury yield to reach 3.4% by the end of 2023 and 3.0% in 2024.
The US stock market is booming. Some of the top stocks to monitor as the US recovers from recession fears and embarks on a path to growth include NVIDIA Corporation (NASDAQ:NVDA), DraftKings Inc. (NASDAQ:DKNG), and Exact Sciences Corporation (NASDAQ:EXAS). As the stock market soars, the economy is showing signs of picking up as well. The significance of the US economy lies in its role as an engine of global economic growth, its influence on financial markets and trade, and its capacity for innovation and technological advancement. Changes in the US economy, and by extension US stocks, can have far-reaching implications, impacting not only the domestic population but also businesses, investors, and economies worldwide.
Our Methodology
For this article, we selected stocks that have gained more than 30% in price over the past six months and ranked them based on overall hedge fund sentiment. We have assessed the hedge fund sentiment from Insider Monkey’s database of 943 elite hedge funds tracked as of the end of the first quarter of 2023. The list is arranged in ascending order of the number of hedge fund holders in each firm.
Source:Pixabay
Best Booming Stocks to Buy Now
10. Opera Limited (NASDAQ:OPRA)
Number of Hedge Fund Holders: 8
Percentage Increase in Share Price Over Past Six Months: 267%
Opera Limited (NASDAQ:OPRA) provides mobile and PC web browsers. The company recently launched a new integrated messaging service called Hype. Hype aims to combine social media, chat, and streaming services into one platform. The service will initially be available in Africa, starting with Kenya, South Africa, and Nigeria. In late April, the firm also beat top and bottom line estimates on earnings for the first quarter of 2023, raising the full year fiscal outlook.
On June 1, investment advisory TD Cowen maintained an Outperform rating on Opera Limited (NASDAQ:OPRA) stock and raised the price target to $19 from $14, noting the firm was in the early stages of its above-average revenue growth and margin expansion.
Among the hedge funds being tracked by Insider Monkey, Baltimore-based investment firm Greenhouse Funds is a leading shareholder in Opera Limited (NASDAQ:OPRA) with 2.2 million shares worth more than $22 million.
Just like NVIDIA Corporation (NASDAQ:NVDA), DraftKings Inc. (NASDAQ:DKNG), and Exact Sciences Corporation (NASDAQ:EXAS), Opera Limited (NASDAQ:OPRA) is one of the booming stocks to buy right now.
In its Q1 2023 investor letter, Fairlight Capital, an asset management firm, highlighted a few stocks and Opera Limited (NASDAQ:OPRA) was one of them. Here is what the fund said:
“We mentioned in our previous quarterly letter that we had built a position in Opera Limited (NASDAQ:OPRA) and that it had just declared a dividend (along with a host of other positive business developments). We continue to hold this position after building a position at prices between $5 and $6; the stock trades as of the time of writing at $10.95. This is one of those ideas that has several elements to the investment thesis as well as a continually evolving business picture.
To summarize, the thesis is a combination of value, substantial cash and investee balances creating an attractive enterprise valuation combined with growth and business opportunities. As of the last quarter cash balances were $119 million. The company also owns a portion of several investee businesses and managed to move its investment in Nanobank4 to the more attractive OPay business at a good valuation. The cash plus investee balances total $436 million (depending on valuation assumptions that are likely conservative for OPay) giving the company an enterprise value of approximately $550 million at the time of writing. Performing a normalized earnings analysis, we estimate a level of net income of $119 million. This is then equivalent to an EVE of 4.6x. This is even after the share price doubled in the last two months…” (Click here to read the full text)
9. UFP Technologies, Inc. (NASDAQ:UFPT)
Number of Hedge Fund Holders: 13
Percentage Increase in Share Price Over Past Six Months: 34%
UFP Technologies, Inc. (NASDAQ:UFPT) designs, engineers, and manufactures solutions for medical devices, sterile packaging, and other highly engineered custom products. In March, the firm posted earnings for the fourth fiscal quarter, reporting earnings per share of $1.10, beating market estimates by $0.19. The revenue over the period was $91 million, up more than 60% compared to the revenue over the same period last year and beating expectations by $5 million. The firm has stepped up investments in single-use medical devices over the past few months.
On May 3, Lake Street analyst Jaeson Schmidt maintained a Buy rating on UFP Technologies, Inc. (NASDAQ:UFPT) stock and raised the price target to $171 from $131, appreciating the strong execution and significant earnings power of the firm.
Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm AltraVue Capital is a leading shareholder in UFP Technologies, Inc. (NASDAQ:UFPT) with 296,411 shares worth more than $38 million.
In its Q4 2022 investor letter, Wasatch Global Investors, an asset management firm, highlighted a few stocks and UFP Technologies, Inc. (NASDAQ:UFPT) was one of them. Here is what the fund said:
“Another meaningful contributor was UFP Technologies, Inc. (NASDAQ:UFPT), which designs and manufactures a range of high-performance cushion packaging and specialty foam and plastic products for industrial and consumer markets. In the past, UFP also made precision-molded fiber packaging primarily from recycled paper. But the company recently divested from that business segment due to margins being lower than those in other business segments. Conversely, UFP has made acquisitions of firms serving the higher-margin medical industry. The company’s recent revenues and earnings were strong, which boosted the stock price. Moreover, with elective medical procedures ramping up after declines amid the pandemic, we expect UFP will start to experience faster growth and even better margins.”
8. Aehr Test Systems (NASDAQ:AEHR)
Number of Hedge Fund Holders: 18
Percentage Increase in Share Price Over Past Six Months: 80%
Aehr Test Systems (NASDAQ:AEHR) provides test systems for burning-in semiconductor devices in wafer level, singulated die, and package part form worldwide. The company recently announced plans to establish a manufacturing facility in Australia. The factory will produce solar trackers to support the country’s growing renewable energy sector. The move aims to reduce costs and increase accessibility of solar technology in Australia.
At the end of the first quarter of 2023, 18 hedge funds in the database of Insider Monkey held stakes worth $92 million in Aehr Test Systems (NASDAQ:AEHR), compared to 17 the preceding quarter worth $63 million.
7. e.l.f. Beauty, Inc. (NYSE:ELF)
Number of Hedge Fund Holders: 30
Percentage Increase in Share Price Over Past Six Months: 91%
e.l.f. Beauty, Inc. (NYSE:ELF) provides cosmetic and skin care products. In the fourth fiscal quarter, the firm posted a 78% net jump in sales year-over-year. Per the management of the firm, this was driven by pricing actions that acted as a key driver of the margin expansion. In addition, supply chain improvements and negotiations with suppliers for lower transportation costs contributed too. These dynamics helped the firm with profitability improvement.
On May 25, Piper Sandler analyst Korinne Wolfmeyer maintained an Overweight rating on e.l.f. Beauty, Inc. (NYSE:ELF) stock and raised the price target to $114 from $105, noting the sales growth of the firm continued to surpass expectations.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Driehaus Capital is a leading shareholder in e.l.f. Beauty, Inc. (NYSE:ELF) with 981,351 shares worth more than $80 million.
In its Q4 2022 investor letter, Diamond Hill Capital, an asset management firm, highlighted a few stocks and e.l.f. Beauty, Inc. (NYSE:ELF) was one of them. Here is what the fund said:
“New positions initiated in Q4 included shorts International Business Machines (IBM), Acushnet Holdings (GOLF) and E.l.f. Beauty, Inc. (NYSE:ELF). Shares of value-oriented beauty brand ELF received a meaningful boost from normalizing beauty usage and spending in a post-COVID environment, which we believe has contributed to its premium multiple relative to competitors in the beauty space. As this temporary lift unwinds, we expect elf’s valuation to similarly return to a level better aligned with its product offerings.”
6. Axcelis Technologies, Inc. (NASDAQ:ACLS)
Number of Hedge Fund Holders: 34
Percentage Increase in Share Price Over Past Six Months: 108%
Axcelis Technologies, Inc. (NASDAQ:ACLS) markets ion implantation and other processing equipment used for the fabrication of semiconductor chips. The firm recently announced that it would be shipping multiple Purion H200 SiC Power Series ion implanter systems to power device chipmakers in Europe and Asia. The shipments include both evaluation and revenue systems that are used in high volume production of power devices supporting automotive industry EV applications.
On June 5, investment advisory William Blair initiated coverage of Axcelis Technologies, Inc. (NASDAQ:ACLS) stock with an Outperform rating, noting that the firm would increase its market share in SiC ion implantation, capturing a larger portion of the $6 billion estimated market.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Rima Senvest Management is a leading shareholder in Axcelis Technologies, Inc. (NASDAQ:ACLS) with 282,806 shares worth more than $37 million.
Along with NVIDIA Corporation (NASDAQ:NVDA), DraftKings Inc. (NASDAQ:DKNG), and Exact Sciences Corporation (NASDAQ:EXAS), Axcelis Technologies, Inc. (NASDAQ:ACLS) is one of the booming stocks to buy right now.
5. DraftKings Inc. (NASDAQ:DKNG)
Number of Hedge Fund Holders: 37
Percentage Increase in Share Price Over Past Six Months: 78%
DraftKings Inc. (NASDAQ:DKNG) operates a digital sports entertainment and gaming company. Over the past two quarters, the company has beat expectations on earnings and raised guidance numbers, wooing investors who had shed the stock because of valuation concerns last year in light of recession fears. Since the beginning of the year, the shares have skyrocketed, driven by a strong football season.
On May 22, investment advisory UBS upgraded DraftKings (NASDAQ: DKNG) stock to Buy from Neutral and raised the price target to $30 from $19, backing the firm to deliver 20%-plus annual revenue growth through 2026.
At the end of the first quarter of 2023, 37 hedge funds in the database of Insider Monkey held stakes worth $1.1 billion in DraftKings Inc. (NASDAQ:DKNG), compared to 32 in the preceding quarter worth $707 million.
In its Q1 2023 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and DraftKings (NASDAQ: DKNG) was one of them. Here is what the fund said:
“We re-initiated a position in former Fund holding DraftKings Inc. (NASDAQ:DKNG), a leading online sportsbook, digital casino, and daily fantasy sports operator. DraftKings’ mobile applications offer consumers the ability to wager on a wide variety of sporting events and play hundreds of real-money casino games. The company has spent the past three years building a proprietary technology stack that improves the customer experience and delivers best-in-class breadth of bet types (such as parlays, same-game parlays, and player props). State-level online sports betting (OSB) and iCasino legalization, along with a multi-year consumer adoption timeline in active states, has supported a 90% revenue growth rate for DraftKings since 2020. The opportunity for OSB legalization remains significant, with under 50% of the U.S. population currently having legal mobile sports betting. We expect 65% to 80% of the population will eventually have access to OSB. ICasino is currently legal in just seven states representing roughly 13% of the population. ICasino product adoption in legalized states has been robust, with the average user spending twice as much as a sports bettor. While the pace of legalization for iCasino has been slower, we believe additional states will pass regulation in the coming years.
As U.S. states began to legalize sports betting, the DraftKings management team moved quickly to build widespread brand awareness. DraftKings is the #2 operator in both OSB and iCasino by a wide margin, and has demonstrated improving market share trends across almost all states. When a new state legalizes sports betting, DraftKings has a first mover advantage as many of its customers are converted from the DraftKings daily fantasy sports offering. The quality of their sportsbook product along with increasingly targeted promotional spending results in strong customer retention and high lifetime values. In states where iCasino is legal, DraftKings can cross-sell OSB customers. DraftKings’ scale and product advantages are creating a flywheel that will enable the company to continue to out-invest the competition in acquisition marketing, retention, and research and development. The high barriers to entry are resulting in a consolidated industry that will eventually lead to a highly profitable business. This is evidenced by older-vintage state contribution margins that are already approaching 40%. Longer term, we believe DraftKings can generate EBITDA margins between 20% and 30% with strong free-cash-flow conversion.”
4. Exact Sciences Corporation (NASDAQ:EXAS)
Number of Hedge Fund Holders: 38
Percentage Increase in Share Price Over Past Six Months: 83%
Exact Sciences Corporation (NASDAQ:EXAS) provides cancer screening and diagnostic test products in the United States and internationally. In early May, the firm posted first quarter earnings that beat expectations on the top and bottom levels. It also raised 2023 guidance in the process. The firm now expects 2023 revenue of $2.38 billion to $2.42 billion, against estimates of $2.3 billion. The previous guidance was $2.265 billion to $2.315 billion.
On May 15, investment advisory Piper Sandler maintained a Neutral rating on Exact Sciences Corporation (NASDAQ:EXAS) stock and raised the price target to $80 from $70. The price target was raised after an impressive earnings report.
At the end of the first quarter of 2023, 38 hedge funds in the database of Insider Monkey held stakes worth $1.4 billion in Exact Sciences Corporation (NASDAQ:EXAS), compared to 39 in the preceding quarter worth $1.3 billion.
In its Q1 2023 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Exact Sciences Corporation (NASDAQ:EXAS) was one of them. Here is what the fund said:
“We initiated a position in Exact Sciences Corporation (NASDAQ:EXAS), a cancer diagnostics company whose flagship product is Cologuard, a stool-based DNA colon cancer screening test. Colon cancer is the second leading cause of cancer deaths in the U.S. Patients who are diagnosed early are more likely to have a complete recovery. Exact has a large opportunity to screen patients with Cologuard. There are roughly 110 million Americans between the ages of 45 and 85 who are at average risk for colon cancer. At a three-year screening interval and an average revenue per test of roughly $500, this represents a potential $18 billion annual revenue opportunity for Cologuard. Recently, the Cologuard business has exhibited strong momentum with several tailwinds driving growth, including demand from health systems, which are incentivized to comply with screening guidelines for enhanced payments, the American Cancer Society guideline change lowering the age of recommended screening from 50 to 45, increased adoption of electronic ordering, and a growing rescreening opportunity. Later this year, Exact expects to report clinical trial data on Cologuard 2.0, a second-generation screening test that management believes will have enhanced specificity and boost gross margins. Exact also plans to participate in the market for minimal residual disease testing and multi-cancer early detection, two large new market opportunities for the company. After many years of heavy investments in its laboratories, IT, and distribution, the company recently turned adjusted EBITDA positive and expects to turn free cash flow positive next year. Long term, management targets 80% gross margins and 40% adjusted EBITDA margins for the business.”
3. MongoDB, Inc. (NASDAQ:MDB)
Number of Hedge Fund Holders: 52
Percentage Increase in Share Price Over Past Six Months: 166%
MongoDB, Inc. (NASDAQ:MDB) provides general purpose database solutions. The firm has posted strong earnings in the past few months because of gains in managed databases and strong customer additions. Potential AI headwinds are also benefiting the stock. The cloud-based Atlas program of the firm is registering robust growth numbers, in addition to other notable programs like GitHub Copilot.
On June 2, investment advisory RBC Capital maintained an Outperform rating on MongoDB, Inc. (NASDAQ:MDB) stock and raised the price target to $400 from $235, noting the firm delivered an impressive earnings beat in the first quarter.
At the end of the first quarter of 2023, 52 hedge funds in the database of Insider Monkey held stakes worth $1 billion in MongoDB, Inc. (NASDAQ:MDB), up from 48 in the previous quarter worth $1.1 billion.
In its Q3 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and MongoDB, Inc. (NASDAQ:MDB) was one of them. Here is what the fund said:
“We made limited changes to the portfolio in the third quarter. New buys included embryonic positions in several rapid growers — MongoDB, Inc. (NASDAQ:MDB) and Clear Secure (YOU) — whose valuations have come in quite dramatically. MongoDB is a company we followed for many years before its 2017 IPO. The stock looks very attractive trading at a third of its recent peak in November 2021. The company’s database software is growing rapidly and taking share in a $50 billion plus global market.”
2. General Electric Company (NYSE:GE)
Number of Hedge Fund Holders: 59
Percentage Increase in Share Price Over Past Six Months: 56%
General Electric Company (NYSE:GE) operates as a high-tech industrial company in Europe, China, Asia, the Americas, the Middle East, and Africa. The stock has gained in the past few months after the firm announced plans to spin off the energy and power divisions into standalone companies. This would allow the firm to develop itself as an aerospace powerhouse and deliver strong growth in this rapidly evolving space.
On April 27, Citi analyst Andrew Kaplowitz maintained a Buy rating on General Electric Company (NYSE:GE) stock and raised the price target to $114 from $109, backing the firm for a relatively sustainable earnings growth runway.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Pzena Investment Group is a leading shareholder in General Electric Company (NYSE:GE) with 12 million shares worth more than $1.1 billion.
In its Q1 2023 investor letter, Vulcan Value Partners, an asset management firm, highlighted a few stocks and General Electric Company (NYSE:GE) was one of them. Here is what the fund said:
“General Electric Company (NYSE:GE) was a material contributor during the quarter. With the successful spin-off of GE HealthCare in early January, the company operates in two major markets: GE Aerospace and GE Vernova. GE Aerospace powers three out of every four commercial flights. GE Vernova helps generate 30% of the world’s electricity and has a meaningful role to play in the energy transition. The company’s service activities, which are higher margin and more resilient, represent approximately 60% of revenue and 85% of its backlog. The company reported strong fourth quarter 2022 results and management’s 2023 outlook is positive.”
1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 132
Percentage Increase in Share Price Over Past Six Months: 145%
NVIDIA Corporation (NASDAQ:NVDA) provides graphics, computing and networking solutions. Recent reports suggest that tech giant Microsoft is stepping up investments in artificial intelligence with a deal to boost cloud computing infrastructure. The deal, worth billions, is being considered with start-up CoreWeave, an NVIDIA-backed company.
On May 31, Bank of America analyst Vivek Arya maintained a Buy rating on NVIDIA Corporation (NASDAQ:NVDA) stock and raised the price target to $500 from $450, noting that ethernet-based AI cloud environments further bolster the AI position of the company.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in NVIDIA Corporation (NASDAQ:NVDA) with 17.9 million shares worth more than $4.9 billion.
In its Q1 2023 investor letter, Fred Alger Management, an asset management firm, highlighted a few stocks and NVIDIA Corporation (NASDAQ:NVDA) was one of them. Here is what the fund said:
“NVIDIA Corporation (NASDAQ:NVDA) is a leading supplier of graphics processing units (GPUs) for a variety of end markets, such as gaming, PCs, data centers, virtual reality and high-performance computing. The company is leading in most secular growth categories in computing, and especially artificial intelligence and super-computing parallel processing techniques for solving complex computational problems. Simply put. Nvidia’s computational power is a critical enabler of Al and therefore critical to Al adoption, in our view. As such, we believe Nvidia is a long-term high unit volume growth opportunity. During the period, NVIDIA reported fiscal fourth-quarter results that met expectations, as the company navigated. through an inventory correction associated with the broad macroeconomic slowdown. Moreover, management gave fiscal year earnings guidance that was better than analyst estimates. noting strong year-over-year growth in gaming and data centers. Management’s constructive assessment of 2023 prospects. coupled with the rapid rollout and adoption of generative Al offerings, led to positive share price performance.”
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Disclose. None. 10 Best Booming Stocks to Buy Now is originally published on Insider Monkey.
