In this article, we will discuss the 5 best stocks to buy under $10 according to hedge funds. If you want to read our detailed analysis of these stocks, you can go directly to the 10 Best Stocks To Buy Under $10 According To Hedge Funds.
5. iQIYI, Inc. (NASDAQ:IQ)
Number of Hedge Fund Holders: 27
iQIYI, Inc. (NASDAQ:IQ) is an online content portal platform similar to Netflix Inc (NASDAQ: NFLX). The company has 500 million monthly active daily users (MAU) as opposed to 209 million subscribers globally for Netflix.
Of the 873 elite funds tracked by Insider Monkey, 27 were long on iQIYI, Inc. (NASDAQ:IQ) at the end of the second quarter of 2021. The estimated market value of this holding is $1.1 billion.
iQIYI, Inc. (NASDAQ:IQ) beat the EPS estimate by $0.05 and the revenue estimate by $24.30 million for the second quarter of 2021. The company expects its net revenue to be between $1.18 billion and $1.25 billion for the third quarter of 2021 as opposed to the analysts’ forecast of $1.23 billion, reflecting an increase of 6% to 13% YoY.
The company should not be considered as a Chinese pure-play as it has been able to garner over 106 million subscribers due to exclusive rights to Korean content, which is famous globally. The recent success of Squid Games on Netflix further shows the potential of Korean content, and this is where iQIYI, Inc. (NASDAQ:IQ) comes into play. Furthermore, the company also launched “iBarca Membership” in partnership with Barcelona Football Club. Iqiyi subscribers would have access to exclusive content from Barca TV in Mandarin and other benefits as well.
4. Paysafe Limited (NYSE:PSFE)
Number of Hedge Fund Holders: 50
Paysafe Limited (NYSE:PSFE) is a London-based provider of specialized payment solutions globally. The company has an annual transactional volume of $100 billion and employs 3,400 people across more than a dozen locations globally. The company went public at the end of 2020 following a merger with SPAC that was supported by the Blackstone Group Inc (NYSE: BX) and CVC Capital Partners. Both these entities bought Paysafe back in 2017 for $4 billion.
Of the 873 hedge funds being tracked by Insider Monkey, 50 hedge funds hold a position in Paysafe Limited (NYSE:PSFE) as of Q2 2021. The total worth of their position is $1.12 billion, which is equivalent to 19.1% of the company’s market capitalization.
Paysafe Limited (NYSE:PSFE) has an opportunity to reap the benefit of the growth potential in the online gambling industry in the US through its specialized products. The industry is expected to grow by 50% as more states are opening to online betting. Most recently, online sports betting started in Connecticut. Meanwhile, the proposal to start online sports betting is in the final stage in New York, and neighboring New Jersey became the first state to report $1 billion worth of sports bets in a month. Furthermore, the company also has digital wallets that can make it a play in the cryptocurrency universe as well.
3. eMagin Corporation (NYSE: EMAN)
Number of Hedge Fund Holders: 9
eMagin Corporation (NYSE: EMAN) engages in the development and selling of organic light-emitting diode displays and other virtual imaging products. It was founded in 1996 and has a market cap of close to $200 million.
In March, investment advisory HC Wainwright reiterated a Buy rating on eMagin Corporation (NYSE: EMAN) stock and raised the price target to $5 from $2, noting that the firm was well positioned for growth this year on the back of improving virtual reality prospects.
At the end of the first quarter of 2021, 9 hedge funds in the database of Insider Monkey held stakes worth $5.9 million in eMagin Corporation (NYSE: EMAN), up from 5 in the preceding quarter worth $786,000.
2. Zynga Inc. (NASDAQ:ZNGA)
Number of Hedge Fund Holders: 49
Zynga Inc. (NASDAQ:ZNGA) is a renowned developer of social games globally and is home to popular games like Farmville and Zynga Poker. The videogame industry has gained a lot of traction since the start of the COVID-19 pandemic as people adopted staying indoors and playing video games.
As of the second quarter of 2021, 49 hedge funds held stakes worth $1.27 billion in Zynga Inc. (NASDAQ:ZNGA), up from 47 in the preceding quarter.
On October 26, Clark Lampen, an analyst at investment advisory BTIG, started coverage of Zynga Inc. (NASDAQ:ZNGA) with a Buy rating and stated the price target as $10. In a research note to investors, Lampen analyzed the company from a sales perspective and shared that Zynga’s setup for 2022 “looks strong.”
Artisan Partners Limited Partnership mentioned Zynga Inc. (NASDAQ:ZNGA) in its Q4 2020 investor letter. Here’s what the firm said:
“We also added to our position in Zynga. Our multiyear investment campaign in Zynga has been based on a new management team’s ability to drive steady growth in the company’s base portfolio of games, expand margins, reinvigorate the new game development pipeline and use its strong balance sheet to acquire complementary games and studios. Shares have been pressured in recent quarters, presumably because of investor concerns about the company’s moderating growth rate and Apple’s pending new privacy policy which will make it more difficult for Zynga to both efficiently acquire new players and sell advertising in its games. We believe the company has multiple growth levers it can pull in the periods ahead, including the rollout of new games, acquisitions, further penetration into international markets and entry into new gaming categories, to name a few. Furthermore, our research suggests the Apple privacy policy change is manageable for larger mobile game developers such as Zynga. Given our strong conviction in the profit cycle, we used recent weakness to add to our position.”
1. Clover Health Investments, Corp. (NASDAQ:CLOV)
Number of Hedge Fund Holders: 23
Clover Health Investments, Corp. (NASDAQ:CLOV) is a Tennessee-based company that provides Medicare Advantage (MA) insurance plans to senior citizens. The company leverages its proprietary software known as the Clover Assistant to provide a complete picture of individuals under their plan. The company was taken public in June 2021 by Sri Lankan-born Canadian venture capitalist Chamath Palihapitiya and also had Alphabet Inc (NASDAQ: GOOGL) and Sequoia Capital amongst its investors.
Back in September, the US Department of Health’s Center for Medicare and Medicaid Services (CMS) approved Clover Health Investments Corp. (NASDAQ:CLOV) to increase its coverage to 101 new counties across the US in September 2021. Furthermore, the CMS also upgraded Clover Health’s PPO plan to 3.5 stars rating early in October.
Out of the 873 hedge funds being tracked by Insider Monkey, 23 held positions in Clover Health Investments, Corp. (NASDAQ:CLOV) at the end of the second quarter of 2021. The total value of the position is more than $1.4 billion and is equivalent to nearly 70% of the market capitalization of the company. This reflects the heavy involvement of hedge funds in Clover Health Investments Corp. (NASDAQ:CLOV).
You can also take a peek at the 11 Best Dividend Aristocrats with over 3% Yield and 12 Best Software Stocks To Buy According To Hedge Funds.
