In this article, we discuss 5 best high beta stocks to buy now. If you want to see more stocks in this selection, check out 11 Best High Beta Stocks To Buy Now.
5. Devon Energy Corporation (NYSE:DVN)
Number of Hedge Fund Holders: 57
Beta Value: 2.45
Devon Energy Corporation (NYSE:DVN) is an Oklahoma-based independent energy company engaged in the exploration, development, and production of oil, natural gas, and natural gas liquids in the United States. Devon Energy Corporation (NYSE:DVN) is one of the best high beta stocks to buy now. On October 18, Piper Sandler analyst Mark Lear lifted the price target on Devon Energy Corporation (NYSE:DVN) to $96 from $94 and assigned an Overweight rating to the shares. After a rocky September, exploration and production names are “back on solid footing heading” into the Q3 results given the limited OPEC supply, as per the analyst.
According to Insider Monkey’s data, 57 hedge funds were long Devon Energy Corporation (NYSE:DVN) at the end of June 2022, compared to 66 funds in the last quarter. Rajiv Jain’s GQG Partners is the largest stakeholder of the company, with nearly 15 million shares worth $822 million.
GoodHaven Capital Management released its second-quarter 2022 investor letter and mentioned Devon Energy Corporation (NYSE:DVN). Here is what it said:
“Our biggest dollar gainer within this period was Devon Energy Corporation (NYSE:DVN), a position which emanated from a takeover in early 2021 of our long time holding WPX Energy. We are sitting on a material (unrealized) gain from our cost and are now receiving material dividends thanks to Devon’s thoughtful fixed/variable dividend policy. Energy is now a hot sector for investors but we have had a material exposure for a long time. We remember a bit too well $40 oil, NEGATIVELY PRICED front-month oil contract, and what it’s like to own a company with leverage and negative free cash flow during such periods. Our desire to have our biggest portfolio exposures be high return, growing, reasonably predictable and moderately levered companies lead us to reduce our Devon exposure in the past. When the recent facts and circumstances for the industry changed and appeared supportive of healthy oil prices, we decided to maintain a sizable holding and more recently added to the position. At Devon’s Q1 dividend rate, which is mostly variable in nature, the shares now yield approximately 10% and our yield on our average cost is materially higher. In addition, we maintain additional energy exposure through our long-term (and successful) holding in Hess Midstream and less directly through TerraVest and Berkshire Hathaway’s energy investments.”
4. Apollo Global Management, Inc. (NYSE:APO)
Number of Hedge Fund Holders: 61
Beta Value: 1.66
Apollo Global Management, Inc. (NYSE:APO) is a private equity firm specializing in investments across credit, private equity, and real estate markets. The company is headquartered in New York, with additional offices in North America, Asia, India, and Europe. On October 18, Credit Suisse analyst Bill Katz initiated coverage of Apollo Global Management, Inc. (NYSE:APO) with an Outperform rating and a $59.50 price target. The analyst sees “strong and diversifying” net new asset potential, increasing fee-related earnings margins, upside to consensus estimates, and rising free cash flow deployment for Apollo Global Management, Inc. (NYSE:APO).
According to Insider Monkey’s second quarter database, 61 hedge funds were long Apollo Global Management, Inc. (NYSE:APO), compared to 64 funds in the prior quarter.
Here is what Miller Value Partners Income Strategy has to say about Apollo Global Management, Inc. (NYSE:APO) in its Q4 2021 investor letter:
“Apollo Global Management (APO) rose 18.4% during the quarter. The company reported Q3 distributable earnings (DE) of $1.71, well ahead of consensus of $1.10 and the quarterly dividend of $0.50/share (2.8% annualized yield). Fee-related earnings of $300M beat by 7% while realized net performance fees of $312M topped estimates by 23%. Total assets under management (AUM) of $481.1Bn and fee-earning AUM of $361.3Bn both rose +2% sequentially on the back of robust capital raising with $18.1Bn of inflows over the period. Additionally, Apollo hosted their 2021 Investor Day, outlining long-term financial targets including over $9/share in distributable earnings by 2026 (14% Compound Annual Growth Rate (CAGR) from $5.50 pro-forma 2022E) and fee-related earnings of $4.50-$4.75 (18% CAGR). Management expects to roughly double AUM by 2026 to $1trn from $481Bn currently with a 2.25x increase in fee-related revenues to $4.6Bn.”
3. HCA Healthcare, Inc. (NYSE:HCA)
Number of Hedge Fund Holders: 63
Beta Value: 1.70
HCA Healthcare, Inc. (NYSE:HCA) is one of the best high beta stocks to consider. It is a Tennessee-based health care services company in the United States. HCA Healthcare, Inc. (NYSE:HCA) operates general and acute care hospitals, providing inpatient care, intensive care, cardiac care, emergency services, and outpatient services. On September 16, Raymond James analyst John Ransom raised the price target on HCA Healthcare, Inc. (NYSE:HCA to $250 from $230 and maintained an Outperform rating on the shares. The catalyst for the updated view is a more detailed analysis of labor trends and an analytical framework based on Q2 2022, a decent quarter with only $25 million of additional COVID support payments, which the analyst assumes will stop in 2023.
Among the hedge funds tracked by Insider Monkey, HCA Healthcare, Inc. (NYSE:HCA was part of 64 public stock portfolios at the end of Q2 2022, compared to 62 funds in the prior quarter. Harris Associates is the largest stakeholder of the company, with 7.75 million shares worth $1.30 billion.
Here is what Diamond Hill Capital Management specifically said about HCA Healthcare, Inc. (NYSE:HCA) in its Q2 2022 investor letter:
“HCA Healthcare, Inc. (NYSE:HCA) is a best-in-class operator of acute care hospitals and other health care facilities, including outpatient surgery centers. It has a strong market presence in highly attractive geographies with growing populations and low unemployment, such as Texas and Florida, which leads to a favorable payor mix. We are further attracted to its strong management team that has a stellar track record of deploying capital, and the founding family continues to own almost a quarter of the business. We initiated a position after HCA reported Q1 earnings — it reduced full year guidance due to increased labor costs and lower-than-expected acuity among COVID admissions, dampening near-term investor sentiment.”
2. Antero Resources Corporation (NYSE:AR)
Number of Hedge Fund Holders: 64
Beta Value: 3.62
Antero Resources Corporation (NYSE:AR) is a Colorado-based independent oil and natural gas company that operates in the Appalachian Basin and the Upper Devonian Shale in the United States. On October 17, Antero Resources Corporation (NYSE:AR) stock gained 4.9% on the news that the energy stock is joining the S&P MidCap 400 index. It is one of the best high beta stocks to invest in.
On October 19, Jefferies analyst Lloyd Byrne initiated coverage of Antero Resources Corporation (NYSE:AR) with a Buy rating and a $47 price target. He believes the “Option Value” of energy is up again, supported by a restricted capital cycle. While this is most pronounced in oil & gas, it is also prominent in energy transition names, said the analyst.
According to Insider Monkey’s Q2 data, 64 hedge funds were long Antero Resources Corporation (NYSE:AR), compared to 53 funds in the earlier quarter. Zach Schreiber’s Point State Capital is the biggest stakeholder in the company, with 4.2 million shares worth $130 million.
1. Citigroup Inc. (NYSE:C)
Number of Hedge Fund Holders: 82
Beta Value: 1.59
Citigroup Inc. (NYSE:C) is an American diversified financial services holding company, providing various financial products and services to consumers, corporations, governments, and institutions in North America, Latin America, Asia, Europe, the Middle East, and Africa. On October 20, Citigroup Inc. (NYSE:C) declared a quarterly dividend of $0.51 per share, in line with previous. The dividend is payable on November 23, to shareholders of record on November 7. The forward yield was 4.76%. Citigroup Inc. (NYSE:C) is one of the premier high beta stocks to invest in.
On October 17, BMO Capital analyst James Fotheringham maintained an Outperform rating on Citigroup Inc. (NYSE:C) but trimmed the price target on the shares to $71 from $76. The company posted “mixed” Q3 results with strong performance across Services, Branded Cards, and Retail Services segments being offset by softer Investment Banking, Trading, and Global Wealth divisions, the analyst told investors. He acknowledged that the recommencement of share repurchases by the end of Q3 2022 is a potential positive catalyst for Citigroup Inc. (NYSE:C).
According to Insider Monkey’s Q2 data, 82 hedge funds were long Citigroup Inc. (NYSE:C), compared to 88 funds in the earlier quarter. Warren Buffett’s Berkshire Hathaway is the leading position holder in the company, with over 55 million shares worth $2.5 billion.
In its Q1 2022 investor letter, Diamond Hill Capital, an asset management firm, highlighted a few stocks and Citigroup Inc. (NYSE:C) was one of them. Here is what the fund said:
“Shares of Citigroup Inc. (NYSE:C) declined in the quarter as investors became increasingly negative on capital markets activity. The company is also continuing to divest certain consumer banking geographies which may be dilutive to earnings in the near term.”
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