Below we presented the list of 5 Best Momentum Stocks to Buy Now. For our detailed discussion and a more comprehensive list please see 15 Best Momentum Stocks to Buy Now.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s take a look at the best momentum stocks to buy:
5. Paypal Holdings, Inc. (NASDAQ:PYPL)
No of HFs: 150
Total Value of HF Holdings: $11.4 Billion
One of the biggest hedge fund savings stakes in the company is Ken Fisher’s Fisher Asset Management which had $1.9 billion invested in the stock at the end of September. Polen Capital Management mentioned PYPL in its Q4 2020 investor letter:
For the full year 2020, one of the top performers was PayPal, which we purchased in 2019, the company continues to take market share in digital payments and has seen an acceleration in user adoption and engagement, especially within their “silver tech” or older user demographic. We expect many more years of ongoing double-digit growth from their various business segments and new initiatives.”
4. Alphabet, Inc. Class C (NYSE:GOOG)
No of HFs: 150
Total Value of HF Holdings: $15.2 Billion
One of the biggest hedge fund savings stakes in the company is Ken Griffin’s Citadel Investment Group which had $2.96 billion invested in the stock at the end of September. The stock was mentioned as one of Malelane’s Top 5 Stock Holdings. Giverny Capital mentioned the stock in its 4Q 2020 investor letter:
“Alphabet is our largest holding. We’re biased, but we’d argue that Alphabet is reasonably priced. It earns significant profit from travel related searches, which are way down this year. Travel spending figures to roar back at some point, possibly soon. Alphabet also spends extravagant amounts on R&D and capital spending as it finances younger ventures. Those other businesses, which include YouTube, Waymo selfdriving cars and cloud computing centers, plus research in artificial intelligence, should eventually generate meaningful returns for shareholders. Or at worst, they will consume less investment over time. If Alphabet simply exercises discipline over investment spending for a few years as travel advertising rebounds and the core search business grows, the resulting free cash flow should generate satisfactory returns for owners.”
3. Alphabet, Inc. Class A (NASDAQ:GOOGL)
No of HFs: 162
Total Value of HF Holdings: $14.7 Billion
GOOGL differs from GOOG because GOOGL – Class A has voting rights. Although they do belong to the same company. In April 2014, the company created two classes of shares to preserves the control of founders Larry Page and Sergey Brin. At the end of September, a total of 162 shares tracked by Insider Monkey were long this stock.
2. Microsoft Corp (NYSE:MSFT)
No of HFs: 234
Total Value of HF Holdings: $42.1 Billion
One of the biggest hedge fund savings stakes in the company is Ken Fisher’s Fisher Asset Management which had $4.7 billion invested in the stock at the end of September. Polen Capital Management mentioned MSFT in its Q4 2020 investor letter:
“Microsoft continues to grow revenue and earnings at scale as it becomes increasingly dominant. Operating leverage continues to benefit shareholders, with the most recent operating margins reaching nearly 43%, up from approximately 38% a year ago. In 2019, we increased the Portfolio’s position to 6% and were rewarded as Microsoft was our top contributor for that year. For the full year 2020, it was, once again, our top contributor. Microsoft now represents the largest position in the Portfolio. Early in the pandemic, CEO Satya Nadella said, “We’ve just seen two years’ worth of digital transformation in two months,” and many of the company’s business segments continue to benefit. Notably, Microsoft 365 (Teams, Azure, Windows virtual desktop and security), Windows, Surface, and gaming are all experiencing increased demand. Free cash flow grew nearly 40% in the most recent quarter, giving the company continued ability to reinvest into long and attractive growth runways.”
1. Amazon Com Inc (NYSE:AMZN)
No of HFs: 245
Total Value of HF Holdings: $43.7 Billion
The top momentum stock to buy now is AMZN. At the end of September, a total of 245 hedge funds tracked by Insider Monkey were long this stock. One of the biggest hedge fund savings stakes in the company is Ken Griffin’s Citadel Investment Group which had $18 billion invested in the stock at the end of September. An insider recently purchased 1 share at around $3,213 in October 2020. The stock is up 2% since then. L1 Capital International Fund mentioned its comments on the stock in its Q3 2020 investor letter:
“Several investments in the technology sector were trimmed on valuation grounds with the proceeds used to increase our investment in Amazon. Amazon’s successful flywheel business model and Amazon Web Services are well known. However, we believe the current share price under‑appreciates:
– The consistency and longevity of Amazon’s growth potential in its key businesses;
– The importance of additional revenue streams such as advertising which are high margin and growing rapidly; and
– The strengthening barriers to competition and competitive advantages arising from Amazon’s stepped‑up investment in logistics and other infrastructure.”
Please also see Billionaire Ken Griffin’s Top 10 Stock Holdings and 30 Most Popular Stocks Among Hedge Funds: 2020 Q3 Rankings
