5 Best Meme Stocks To Buy Now

4. Carvana Co. (NYSE:CVNA)

Number of Hedge Fund Shareholders: 33

Retail investors and short sellers have been doing battle over Carvana Co. (NYSE:CVNA) for several quarters now, with short sellers holding the upper hand. CVNA shares have crashed by 94% since the middle of August 2021, driven by a struggling used car market and insolvency fears. Hedge funds have also been bailing on Carvana in recent quarters, with their ownership stakes in the stock having fallen by 49% since early 2021.

The good news for Carvana Co. (NYSE:CVNA) is that the company appears to have avoided disaster and the worst may be behind it, which has led to a resurgence in the stock this year. Used car prices are on the rise again after sinking throughout much of 2022, and the company’s concerted effort to slash costs has paid off, with it forecasting $50 million in adjusted EBITDA for Q2.

After being one of the fund’s top performers for several years, the ClearBridge Mid Cap Growth Strategy sold off Carvana Co. (NYSE:CVNA) late last year, as it revealed in its Q4 2022 investor letter:

“We exited our position in online automotive retailer Carvana Co. (NYSE:CVNA), in the consumer discretionary sector. After being one of the portfolio’s top performers over the last few years, Carvana has struggled due to a cyclical downtrend in used car volumes and prices as well as investor concern about the company’s ability to fund future growth. We felt the combination of growing macro uncertainty combined with weakening fundamentals justified finally closing the position.”