5 Best Multibagger Stocks to Buy for 2024

In this article, we discuss the 5 best multibagger stocks. To read the global economic outlook and analysis of multibagger stocks, you can go directly to the 14 Best Multibagger Stocks to Buy for 2024.

5. Royal Caribbean Cruises Ltd. (NYSE:RCL)

Number of Hedge Fund Holders: 39

1-Year Share Price Gain as of July 7: 213.01%

Royal Caribbean Cruises Ltd. (NYSE:RCL) is another cruise line company on our list that took advantage of the ease of travel restrictions after the COVID-19 pandemic and became a multi-bagger stock. The company stock has increased by 213% in one year as of July 7.

Out of 39 hedge funds that held a stake in Royal Caribbean Cruises Ltd. (NYSE:RCL) in Q1 2023, Ariel Investments held the top position with over 2.756 million shares worth $179.98 million. D E Shaw became the second largest hedge fund holder of the company after it increased its holdings in Royal Caribbean Cruises Ltd. (NYSE:RCL) by 2694% to 1.7 million shares worth $112.107 million.

On June 23, Stifle maintained a Buy rating on Royal Caribbean Cruises Ltd. (NYSE:RCL) and raised its price target on the company stock to $120 from $100.

Ariel Investments made the following comment about Royal Caribbean Cruises Ltd. (NYSE:RCL) in its Q1 2023 investor letter:

“Additionally, Global cruise vacation company, Royal Caribbean Cruises Ltd. (NYSE:RCL) advanced following a significant top- and bottom-line earnings beat, driven by strong consumer demand, higher occupancy, further improvement in onboard revenue and solid cost containment. Forward booking trends are also within historical ranges at record pricing. This gave management visibility to provide full year guidance, which includes RCL’s expectation for yields to set a new record in 2023 and for the company’s adjusted EBITDA to reach an all-time high. This forecast is in-line with the company’s three-year initiative, the Trifecta Program to drive financial performance. At today’s valuation, RCL is currently trading at a 37% discount to our estimate of private market value.”

4. First Solar, Inc. (NASDAQ:FSLR)

Number of Hedge Fund Holders: 39

1-Year Share Price Gain as of July 7: 172.97%

First Solar, Inc. (NASDAQ:FSLR) is an American company that provides solar power solutions. Currently, the company stock is trading at a high premium yet Goldman Sachs believes the company stock can go even higher due to “multiple catalysts brewing”. On June 27, the firm reaffirmed a Buy rating on First Solar, Inc. (NASDAQ:FSLR) stock with a $272 price target. The company stock closed at $189.14 on July 7 and represented a gain of 172.97% in the last twelve months.

First Solar, Inc. (NASDAQ:FSLR) is one of the leading renewable energy companies in the world. Analysts are bullish on the company stock despite it trading at a TTM PE ratio of 450.33. One of the reasons for this sentiment could be the fast growth of the solar power industry. In the first quarter of 2023, solar power experienced the most growth in its history, and its usage could double in the next five years. In 2023, 54% of all the new electricity generating capacity in the US is expected to be solar.

On June 30, First Solar, Inc. (NASDAQ:FSLR) entered into a five-year revolving credit and guarantee facility. The revolving credit facility is valued at $1 billion and J.P. Morgan Chase is its administrative agent.

Here is what White Brook Capital had to say about First Solar, Inc. (NASDAQ:FSLR) in its Q1 2021 investor letter:

“First Solar (FSLR) and Itron (ITRI), both of which I’ve written about in past In Focus sections, were long-term positions that were sold as their prices exceeded price targets. Both are solid companies that remain on my watchlist, but the opportunity cost of not investing in other potential investments exceeded their potential mid-term returns.”

3. Vertiv Holdings Co (NYSE:VRT)

Number of Hedge Fund Holders: 41

1-Year Share Price Gain as of July 7: 184%

Vertiv Holdings Co (NYSE:VRT) produces electrical equipment for data centers. Its products include critical power systems, UPS systems, power distribution units, and thermal management systems along with several other products. Vertiv Holdings Co (NYSE:VRT) is headquartered in Ohio, US, and operates globally.

In Q1 2023, 41 hedge funds had a stake in Vertiv Holdings Co (NYSE:VRT), compared to 40 in the previous quarter. Starboard Value LP owned 16.8 million of the company shares worth $240.67 million.

Vertiv Holdings Co (NYSE:VRT)’s share price gained 184% in one year at market close on July 7. Evercore ISI sees a further upside to the company stock and on June 29, the firm raised its price target for Vertiv Holdings Co (NYSE:VRT)’s stock to $30 from $20.

ClearBridge Investments made the following comment about Vertiv Holdings Co (NYSE:VRT) in its Q4 2022 investor letter:

“Another solid contributor was Vertiv Holdings Co (NYSE:VRT), a leader in power and thermal management and related tools and systems used by data centers, enterprise and industrials customers and communication carriers globally. Vertiv continues to demonstrate a recovery from supply chain disruptions, win investor approval of its new CEO’s focus on operational improvements and generate greater free cash flow which will continue to make it a strong, long-term holding.”

2. Builders FirstSource, Inc. (NYSE:BLDR)

Number of Hedge Fund Holders: 51

1-Year Share Price Gain as of July 7: 121.91%

Builders FirstSource, Inc. (NYSE:BLDR) is a Texas-based company that manufactures and provides building supplies and construction services. The company is expected to announce its second quarter 2023 results on August 2. In Q1, Builders FirstSource, Inc. (NYSE:BLDR) provided net sales guidance between the range of $4.0 billion to $4.2 billion, adjusted EBITDA to be in a range of $525 million to $575 million, and adjusted EBITDA margin to be in a range of 13.1% to 13.7% for the second quarter.

On July 5, Wedbush analyst Jay McCanless reaffirmed an Outperform rating on Builders FirstSource, Inc. (NYSE:BLDR) and raised his price target from $135 to $175. The analyst’s price target represents a 31.48% upside to the company’s stock price of $133.10 as of the market close on July 7th. In the last twelve months, Builders FirstSource, Inc. (NYSE:BLDR)’s share price has been up by nearly 122%.

Builders FirstSource, Inc. (NYSE:BLDR) was held by 51 hedge funds in Q1 2023, with a combined stake value of $1.136 billion.

Black Bear Value Partners made the following comment about Builders FirstSource, Inc. (NYSE:BLDR) in its first quarter 2023 investor letter:

“Builders FirstSource, Inc. (NYSE:BLDR) is a manufacturer and supplier of building materials with a focus on residential construction. Historically this business was cyclical with minimal pricing power as the primary products sold were lumber and other non-value-add housing materials. Since the GFC, BLDR has focused on growing their value-add business that is now 40%+ of the topline. The company has modest leverage and has been using their abundant free-cash-flow to buy in over 30% of the stock in the last 18 months.

While mortgage rates are higher, they are not unusual versus history. The low rates of the last 5-10 years are the outlier. We have a structural shortage of housing in the USA. With existing homeowners locked into lowrate mortgages, the aspiring homeowner may increasingly need to find a home from a homebuilder. The next 6-12 months could be rocky as people adjust to the increase in pricing and rates. Eventually the housing market should adjust to the new normal (or rates could go down).

Normalized free-cash-flow per share looks to be in the range of $8-$12 per year. At quarter end pricing of ~$89 that implies a free-cash-flow yield of 9-13%. If we owned this business privately and someone offered us a this annual cash-flow yield, we would be jumping at it!”

1. NVIDIA Corporation (NASDAQ:NVDA)

Number of Hedge Fund Holders: 132

1-Year Share Price Gain as of July 7: 180.51%

NVIDIA Corporation (NASDAQ:NVDA) tops our list of best multi-bagger stocks as the company reached its $1 trillion market capitalization mark on May 30. The company’s stock price and market cap have taken flight due to the latest generative AI trends in the market and it is one of the AI industry’s biggest winners. NVIDIA Corporation (NASDAQ:NVDA) stock has gained over 180% in the last twelve months and year-to-date, the company stock price has been up by almost 200%.

NVIDIA Corporation (NASDAQ:NVDA)’s hedge fund sentiment also took a huge leap in the first quarter of 2023. The company was held by 132 hedge funds in Q1 2023, compared to 106 in the previous quarter. GQG Partners initiated a position worth over $2.29 billion in NVIDIA Corporation (NASDAQ:NVDA) and became the largest hedge fund holder in Q1.

NVIDIA Corporation (NASDAQ:NVDA) has been covered by 33 analysts in the last three months and 30 of them maintain a Buy or Overweight rating on the company stock with an average price target of $480.61 and a high estimate of $600.

ClearBridge Investments made the following comment about NVIDIA Corporation (NASDAQ:NVDA) in its second quarter 2023 investor letter:

“The Strategy’s IT holdings also drove performance in the second quarter, led by the continued rerating of graphics chipmaker NVIDIA Corporation (NASDAQ:NVDA) as a key beneficiary of the generative AI boom. Nvidia is a good example of a select growth stock bought opportunistically where our long-term thesis has bloomed. We initiated the position in the fourth quarter of 2018 knowing that inference and training in the data center was an interesting although still early-stage growth driver. We knew that GPUs could be used to solve complex computing problems, but we didn’t know how quickly the training and learning efforts by Nvidia’s mega cap customers would hit an inflection point. Volatility in the gaming business created the entry point into the stock and we have built the position accordingly over time. Since the end of 2021, the stock’s portfolio weight grew from 4.5% to a high of 7.2% earlier in the second quarter before we trimmed it to manage our overall position sizing.

We will continue to monitor and adjust Nvidia’s position sizing to manage risk. Despite the sharp run up, we believe the company’s long-term runway remains compelling due to its advantaged positioning in a very large addressable market for GPUs. The current valuation looks expensive, yet Nvidia has real earnings and cash flow and the longer-term multiple looks more reasonable because of GPU pricing power.”

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