In this article, we will be taking a look at the 5 best meme stocks to buy now. To read our detailed analysis of these stocks and their past performance, you can go directly to see the 11 Best Meme Stocks to Buy Now.
5. DTE Energy Company (NYSE:DTE)
Number of Hedge Fund Holders: 29
DTE Energy Company (NYSE:DTE) is a utility company that generates, purchases, distributes, and sells electricity to about 2.3 million customers in southeastern Michigan. The company is based in Detroit, Michigan.
Barclays’ Eric Beaumont holds an Equal Weight rating on shares of DTE Energy Company (NYSE:DTE) as of July 18, alongside a $131 price target.
DTE Energy Company (NYSE:DTE) is among the few meme stocks that have proven themselves to be more than just a trend, with meme investors eyeing it seriously and not targeting it as a short-sell stock pick.
In total, 49 hedge funds were long DTE Energy Company (NYSE:DTE) in the second quarter. Their total stake value was $550 million.
4. United States Steel Corporation (NYSE:X)
Number of Hedge Fund Holders: 30
United States Steel Corporation (NYSE:X) is a materials company that produces flat-rolled and tubular steel products for sale in North America and Europe. The company is based in Pittsburgh, Pennsylvania.
On October 4, analyst Carlos De Alba reiterated an Equal Weight rating on shares of United States Steel Corporation (NYSE:X), alongside a $21.5 price target.
United States Steel Corporation (NYSE:X) had 30 hedge funds holding stakes in it in the second quarter, and 37 hedge funds long its stock in the previous quarter. Their total stake values were $617 million and $1.7 billion, respectively.
3. Carvana Co. (NYSE:CVNA)
Number of Hedge Fund Holders: 47
Carvana Co. (NYSE:CVNA) is an automotive retail company operating an e-commerce platform for the sale and purchase of used cars in the US. The company is based in Tempe, Arizona.
John Colantuoni at Jefferies has a Hold rating on shares of Carvana Co. (NYSE:CVNA) as of October 6. The analyst also placed a $23 price target on the stock.
The company went from being Wall Street’s top pick for used car retailers to a meme stock in light of cost-cutting and layoffs. Yet it still represents an attractive investment opportunity particularly for Reddit traders.
Carvana Co. (NYSE:CVNA) was found among the 13F holdings of 47 hedge funds in the second quarter. Their total stake value was $808 million.
RV Capital, an investment management firm, mentioned Carvana Co. (NYSE:CVNA) in its second-quarter 2022 investor letter. Here’s what the firm said:
“I wrote about Carvana as recently as my 2021 letter. In the short period of time since, the stock has lost much of its value. It has been a traumatic experience, so to skip straight to the punchline, no I have not enjoyed the decline in the share price.
Oddly enough given all that has happened, there is not much I would change in my 2021 letter. There was, however, one enormous mistake on my part which I would like to be completely clear about. I underestimated the financial leverage of the company. I hate debt and seek to avoid it at the companies I invest in. At companies, where debt is an unavoidable part of the business, I try to make sure that it is low both in absolute terms and relative to peers. And yet, an impartial observer looking at the financial situation of Carvana today might reasonably conclude that it will run out of money. This is not the way that I seek to invest – period.
In my defence, the company was not overly indebted at the time we invested. The debt came about through a series of coincidences – some under the company’s control, others not. The company over-hired towards the end of 2021, like many companies, in anticipation of strong growth in 2022. This growth did not materialise due to a combination of the re-emergence of Covid-19, winter storms, and unprecedented inflation in the price of used cars. The upshot was spiralling losses and growing debt. In addition, a long-planned acquisition came to fruition at the worst possible time from a financing perspective. It bought Adesa’s physical used car auction business. Whilst the acquisition makes a lot of sense in my view given Adessa’s valuable real estate footprint, and Carvana likely had little choice but to complete the deal then or lose it forever, it greatly increased the indebtedness from already elevated levels given the spiralling operating losses…” (Click here to see the full text)
2. The Kroger Co. (NYSE:KR)
Number of Hedge Fund Holders: 49
The Kroger Co. (NYSE:KR) is a food retail company operating in the US and based in Cincinnati, Ohio. The company operates food and drug stores, multi-department stores, and price impact warehouses alongside marketplace stores.
Exane BNP Paribas analyst Andrew Gwynn upgraded shares of The Kroger Co. (NYSE:KR) on October 10 from Neutral to Outperform. The analyst also placed a $51 price target on the stock.
Over the next three to five years, The Kroger Co. (NYSE:KR) is expected to see EPS growth of 12.85%. The company’s one-year dividend growth rate stands at 18.67%.
Our hedge fund data shows 49 funds long The Kroger Co. (NYSE:KR) in the second quarter, with a total stake value of $4.3 billion.
1. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 72
Tesla, Inc. (NASDAQ:TSLA) is Elon Musk’s electric-vehicle manufacturing company based in Austin, Texas. It remains one of the most popular stocks on Reddit’s WSB forum.
Adam Jonas at Morgan Stanley holds an Overweight rating on shares of Tesla, Inc. (NASDAQ:TSLA) as of October 10, alongside a $350 price target.
The company’s year-over-year revenue growth rate stands at 60.45% and its EPS growth rate over the next three to five years stands at 36.66%. Tesla, Inc.’s (NASDAQ:TSLA) operating cash flow has also grown by 53.39% year-over-year.
Out of 895 hedge funds, 72 funds were long Tesla, Inc. (NASDAQ:TSLA) in the second quarter, and 80 funds were long the stock in the previous quarter. Their total stake values were $7.1 billion and $11.3 billion, respectively.
See also 10 Best Lumber Stocks To Buy and 10 Best Global Stocks To Buy.
