In this article, we discuss the 10 best stocks to make money.
Investing in equities is a trusted and reliable method for building long-term wealth. However, even though it is relatively easier to identify stocks that will do well in the long-term, based on the viability of the products or services they offer and the vision of the management that markets them, it is somewhat harder to predict the direction a stock may take in the short-term. This is why making a quick buck at the market can be tricky. A comparison to gambling makes sense here, where beginner’s luck can only get you so far.
However, that is not to say that short-fluctuations are impossible to predict. Many money managers have made successful careers out of day-trading, a fancy term used to describe traders that buy and sell stocks within a trading day, profiting from short-term price fluctuations. With the influx of retail investors on the marketplace, day trading has been taken to new heights, becoming a new normal in a volatile market. Stock trading applications, like Robinhood, have also played a part in this changing dynamic.
As more companies prepare to release their earnings, investors should expect increased price fluctuations in the coming weeks. Academically speaking, any stock that trades 1 or 2 million shares in a day is considered an “active” stock. Active stocks usually experience greater volatility. However, since over 250 firms on the market, many of them in the S&P 500, fall under this category, it is safe to say that traditional definitions have not aged well for the stock market as it is today.
Internet forums like Reddit, often used by retail investors, are full of market enthusiasts who have made fortunes on increased volatility, often betting on small, high-risk firms that either go big or bust completely. This YOLO strategy has invoked interest from big finance as well, ever since the short squeeze saga involving GameStop in January. Some of the top stocks to make money now include Atlassian Corporation Plc (NASDAQ:TEAM), Tesla, Inc. (NASDAQ:TSLA), and Coinbase Global, Inc. (NASDAQ:COIN), among others discussed in detail below.
Our Methodology
These were picked based on upcoming growth catalysts, business fundamentals, and analyst ratings. Hedge fund sentiment was included as a key classifier to provide readers with some more context for their investment decisions.
The hedge fund sentiment around each stock was calculated using the data of 873 hedge funds tracked by Insider Monkey.
Why pay attention to hedge fund holdings? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
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Best Stocks to Make Money
10. Krispy Kreme, Inc. (NASDAQ:DNUT)
Number of Hedge Fund Holders: N/A
Krispy Kreme, Inc. (NASDAQ:DNUT) is a retailer of doughnuts, coffee, and other food and beverages. After a lengthy spell as a private entity, the firm debuted on the market in July this year, fetching a valuation of around $2.7 billion. The stock has gained in recent days after the firm beat market estimates on revenue for the third quarter, revealing that organic sales had grown 6% year-on-year and were up 14% compared to 2019 despite tough competition.
Krispy Kreme, Inc. (NASDAQ: DNUT) also updated guidance for the fiscal year, predicting that annual revenue would be up to $1.38 billion against consensus estimates of $1.34 billion, and organic revenue growth would be around 12%.
Krispy Kreme, Inc. (NASDAQ: DNUT) has been hit by labor and inflation pressures but has been busy shoring up an omnichannel strategy to offset the setbacks. It has agreed to take majority controlling interest in the Canada business of the firm as part of this plan.
Just like Atlassian Corporation Plc (NASDAQ:TEAM), Tesla, Inc. (NASDAQ:TSLA), and Coinbase Global, Inc. (NASDAQ:COIN), Krispy Kreme, Inc. (NASDAQ: DNUT) is one of the stocks attracting the attention of retail traders.
9. Rocket Lab USA, Inc. (NASDAQ:RKLB)
Number of Hedge Fund Holders: N/A
Stifel analyst Erik Rasmussen recently initiated coverage of Rocket Lab USA, Inc. (NASDAQ:RKLB) stock with a Buy rating and a price target of $22, underlining the “explosive” potential of the small satellite market and the technological advantages the firm had to compete in the realm as some of the reasons behind the bullish view. The analyst termed the new Electron rocket of the firm a “game-changer”.
Rocket Lab USA, Inc. (NASDAQ:RKLB) stock has also rallied after the company announced that the National Aeronautics and Space Administration (NASA) had chosen Rocket Lab to launch the Advanced Composite Solar Sail System on the Electron launch vehicle.
Among the hedge funds being tracked by Insider Monkey, California-based firm Think Investments is a leading shareholder in Rocket Lab USA, Inc. (NASDAQ:RKLB) with 1.6 million shares worth more than $17 million.
8. Blink Charging Co. (NASDAQ:BLNK)
Number of Hedge Fund Holders: 7
Blink Charging Co. (NASDAQ:BLNK) is an electric vehicle charging firm. The stock has jumped in the past few weeks as a new infrastructure plan is approved by the government that will place an emphasis on the development of new charging stations across America with the help of spending from Washington. The firm also recently announced that Rudy’s Performance Parts, an automotive accessories business, had purchased 64 residential charging stations from Blink.
Needham analyst Vikram Bagri has a Buy rating on Blink Charging Co. (NASDAQ:BLNK) stock with a price target of $32. In an investor penned in late October, the analyst underlined that the firm would face competition from big players in the US and EU in the short-term, but long-term outlook was bullish.
At the end of the second quarter of 2021, 7 hedge funds in the database of Insider Monkey held stakes worth $14 million in Blink Charging Co. (NASDAQ:BLNK), down from 12 in the previous quarter worth $40 million.
7. PubMatic, Inc. (NASDAQ:PUBM)
Number of Hedge Fund Holders: 10
PubMatic, Inc. (NASDAQ:PUBM) markets a cloud infrastructure platform for advertising. The stock is a favorite of retail investors on Reddit forums. It also has solid fundamentals, recently beating market estimates on earnings per share and revenue in the third quarter by $0.17 and $5.6 million respectively. The share price has soared 8% in the past five days on the back of the earnings report and improved guidance numbers.
On November 10, investment advisory Oppenheimer maintained an Outperform rating on PubMatic, Inc. (NASDAQ:PUBM) stock and raised the price target to $50 from $45, noting the firm was moving closer to “advertisers and agencies”.
At the end of the second quarter of 2021, 10 hedge funds in the database of Insider Monkey held stakes worth $87 million in PubMatic, Inc. (NASDAQ:PUBM), up from 5 in the preceding quarter worth $63 million.
6. Upstart Holdings, Inc. (NASDAQ:UPST)
Number of Hedge Fund Holders: 21
Upstart Holdings, Inc. (NASDAQ:UPST) is a fintech firm that operates a lending platform powered by artificial intelligence. Although the stock has slumped in the past few days despite posting market-beating earnings results for the third quarter, Piper Sandler analyst Arvind Ramnani recently maintained an Overweight rating on the shares with a price target of $300, noting the stock should be bought amid a selloff on concerns around valuation and quantification. The analyst touts loan volume growth and steady conversion rate as catalysts.
Prominent finance personality Jim Cramer recently outlined his bullish stance on “neo-banks” like Upstart Holdings, Inc. (NASDAQ:UPST), noting that these firms could be a good alternative holding to traditional banks in the earnings season.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Third Point is a leading shareholder in Upstart Holdings, Inc. (NASDAQ:UPST) with 13.3 million shares worth more than $1.6 billion.
Alongside Atlassian Corporation Plc (NASDAQ:TEAM), Tesla, Inc. (NASDAQ:TSLA), and Coinbase Global, Inc. (NASDAQ:COIN), Upstart Holdings, Inc. (NASDAQ:UPST) is one of the stocks on the radar of hedge funds.
In its Q2 2021 investor letter, Vulcan Value Partners, an asset management firm, highlighted a few stocks and Upstart Holdings, Inc. (NASDAQ:UPST) was one of them. Here is what the fund said:
“During the quarter, we purchased Upstart Holdings Inc. Upstart is an artificial intelligence (AI) and cloud-based lending platform. The company uses AI models to underwrite superior loans with lower interest rates, lower default rates, higher approval rates, and increased underwriting automation. Consumers can access Upstart-powered loans through its banking partners’ websites; however, most of its loans are underwritten on Upstart.com. Upstart has a fee-based revenue model and retains only a small portion of the loans, while the majority of the loans end up on the balance sheets of its partner banks or are sold into the capital markets. We believe Upstart’s technology is superior to the FICO score, which is ubiquitous within the consumer credit markets. With an excellent product and a large total addressable market, we believe that Upstart’s prospects are bright.”
5. 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS)
Number of Hedge Fund Holders: 24
1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS) markets gifts for different occasions. Craig-Hallum and DA Davidson are bullish on the stock heading into the holiday season on the back of improved guidance and solid third quarter earnings results. There has been a lot of chatter around the company on Reddit forums as the new ecommerce ventures of the firm go online, promising a boost in total sales and profits.
1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS) is the largest gourmet food and floral gift provider, controlling nearly 27% of the total market share. Labor shortages have failed to significantly affect margins for the firm, as investors had earlier feared.
At the end of the second quarter of 2021, 24 hedge funds in the database of Insider Monkey held stakes worth $93 million in 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS), up from 22 the preceding quarter worth $62 million.
4. Open Lending Corporation (NASDAQ:LPRO)
Number of Hedge Fund Holders: 24
Open Lending Corporation (NASDAQ:LPRO) provides risk analytics solutions. The stock has soared in recent weeks after reports that Stellantis, an automotive firm, had acquired First Investor Financial Services. Open Lending had established a partnership with First Investor in the third quarter that will likely lead to a huge new opportunity for the firm if it can extend it to Stellantis as a whole.
Raymond James analyst John Davis recently maintained a Strong Buy rating on Open Lending Corporation (NASDAQ:LPRO) stock with a price target of $52, noting that the rumored Stellantis deal would boost earnings of the company by 80%.
Among the hedge funds being tracked by Insider Monkey, New York-based firm Washington Harbour Partners is a leading shareholder in Open Lending Corporation (NASDAQ:LPRO) with 2.1 million shares worth more than $91 million.
3. Coinbase Global, Inc. (NASDAQ:COIN)
Number of Hedge Fund Holders: 49
Coinbase Global, Inc. (NASDAQ:COIN) operates as a fintech firm for the crypto economy. The firm recently beat market estimates on earnings per share for the third quarter by $0.19 but missed on revenue. However, analysts like Canaccord, JPM Securities, and Piper Sandler have reaffirmed their bullish long-term outlook on the stock after the earnings call, touting the potential of NFTs direct deposits as huge catalysts for growth.
Coinbase Global, Inc. (NASDAQ:COIN) stock has also benefited from a recent rally in cryptocurrencies, with popular coins like Bitcoin and Ether climbing to record highs as smaller ones like Cardano and Litecoin also increase in value.
Among the hedge funds being tracked by Insider Monkey, New York-based firm ARK Investment Management is a leading shareholder in Coinbase Global, Inc. (NASDAQ:COIN) with 5.6 million shares worth more than $1.4 billion.
2. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 60
Tesla, Inc. (NASDAQ:TSLA) has perhaps been the hottest stock in the market in the past few months, going on an incredible rally that saw share price climb 700% in a few months at the start of the year and then taking a breather through the second quarter before bouncing back in the third, climbing the $1 trillion market cap barrier. The stock has room to climb further after reports that suggest that the company is planning to open a second electric vehicle factory in Shanghai.
Tesla, Inc. (NASDAQ:TSLA) recently revealed that it had sold 54,391 China-made cars in October and shipped 40,666 of them. Between June and September this year, the firm had produced 237,823 vehicles and delivered 241,391 of them, up 64% and 73% year-on-year, respectively.
At the end of the second quarter of 2021, 60 hedge funds in the database of Insider Monkey held stakes worth $9 billion in Tesla, Inc. (NASDAQ:TSLA), down from 62 in the previous quarter worth $10 billion.
Here is what Baron Partners Fund has to say about Tesla, Inc. (NASDAQ:TSLA) in its Q1 2021 investor letter:
“Tesla, Inc. designs, manufactures, and sells fully electric vehicles, solar products, energy storage solutions, and battery cells. The stock fell during the quarter as a result of general market dynamics and a potential production slowdown due to parts shortages. A refreshed S/X and China Model Y ramp could also have a negative impact on margins in early 2021. We anticipate strong growth and improved margins driven by new production capacity, manufacturing efficiencies, localization of its manufacturing and supply chain, and maturation of Tesla’s full self-driving technology.”
1. Atlassian Corporation Plc (NASDAQ:TEAM)
Number of Hedge Fund Holders: 64
Atlassian Corporation Plc (NASDAQ:TEAM) is an application software firm. The stock has returned more than 137% to shareholders over the past twelve months. Most of this rally has been on the back of a successful cloud transition of the firm that has helped it beat market estimates on earnings over the last two quarters. The subscription revenue of the company is also increasing, evidenced by the 50% increase registered in the second quarter.
Canaccord analyst David Hynes recently raised the price target on Atlassian Corporation Plc (NASDAQ:TEAM) stock to $500 from $325 and maintained a Buy rating, noting that raised guidance and subscription growth pointed to the positive direction the firm was taking.
At the end of the second quarter of 2021, 64 hedge funds in the database of Insider Monkey held stakes worth $4.1 billion in Atlassian Corporation Plc (NASDAQ:TEAM), down from 67 the preceding quarter worth $3.9 billion.
Here is what Baron Opportunity Fund has to say about Atlassian Corporation Plc (NASDAQ:TEAM) in its Q2 2021 investor letter:
“Atlassian Corporation Plc is a software leader that makes tools that are used by thousands of teams worldwide, thus its ticker TEAM. Atlassian’s tools “help teams collaborate, build, and create together” (quote from Atlassian’s website), with an emphasis on designing, developing, and maintaining software, including JIRA for team planning and project management, Confluence for team content creation and sharing, HipChat for team messaging and communications, Bitbucket for team software code sharing and management, and JIRA Service Desk for team services and support use cases. Atlassian is the recognized market leader for information technology team planning and project management software, and has extended its product offering into tangential areas, such as those listed above. The company is in the midst of transitioning its business model to the cloud, which will help it drive faster product innovation, more seamlessly integrate its product families, and raise the effective price realization for its suite of products. Atlassian is run by its two visionary founders, has strong competitive advantages, and we think it should be able to grow revenue over 25% for many years with best-in-class free cash flow margins.”
You can also take a peek at 10 Best EV SPACs to Buy Now and 10 Best Lithium and Phosphate Stocks to Buy Now.
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Disclosure. None. 10 Best Stocks to Make Money is originally published on Insider Monkey.
