5 Best Slow Growth Stocks to Buy According to Hedge Funds

In this article, we discuss the 5 best slow growth stocks to buy according to hedge funds. If you want to read about some more slow growth stocks, go directly to 10 Best Slow Growth Stocks to Buy According to Hedge Funds.

5. Datadog, Inc. (NASDAQ:DDOG)

Number of Hedge Fund Holders: 81     

Datadog, Inc. (NASDAQ:DDOG) provides a monitoring and analytics platform for developers, information technology operations teams, and business users in the cloud in North America and internationally. It is one of the best growth stocks to invest in. On October 19, Datadog stated the general availability of Cloud Cost Management. Cloud Cost Management is used to show an organization’s cloud spending in the context of their observability data. Now FinOps and engineering teams can automatically attribute spending to applications, teams and services. 

On October 20, BTIG analyst Gray Powell maintained a Buy rating on Datadog, Inc. (NASDAQ:DDOG) stock and lowered the price target to $104 from $137, noting that elevated concerns on the potential for a weakening economic environment would drive a slowdown in spending growth of the firm.

At the end of the second quarter of 2022, 81 hedge funds in the database of Insider Monkey held stakes worth $2.7 billion in Datadog, Inc. (NASDAQ:DDOG), compared to 82 in the previous quarter worth $4.9 billion.

In its Q1 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Datadog, Inc. (NASDAQ:DDOG) was one of them. Here is what the fund said:

“Another example is Datadog, Inc. (NASDAQ:DDOG), the leading infrastructure monitoring, application performance monitoring and log management software platform. Datadog’s stock declined 15% during the quarter, despite reporting sparkling operational results, with revenues accelerating to a growth rate of 84% year-over-year with 33% free cash flow margins while guiding for 2022 significantly above expectations. Datadog added 4,600 new customers in the quarter while existing customers continued to increase their spending on Datadog products at a rapid pace with the number of customers using four or more products increasing to 33% from 22% last year. While Datadog’s stock was down, its intrinsic value has undoubtedly increased. This is enabled by rapid innovation (Datadog released 13 new products in 2021) into a market that is benefiting from the secular growth in the cloud, digital transformation, and the explosion in complexity as the number of vendors, diversity of technologies and related infrastructure continued to expand.”