In this article, we discuss 12 best US stocks to buy now.
All major stock benchmarks saw their highest losses in two years in the first quarter of 2022, with the S&P 500 declining 4.6% and the Nasdaq Composite falling 9%. Market experts are concerned that the rising rates to control inflation might go too far and trigger a recession in the United States. Similarly, the Russia-Ukraine conflict is still ongoing regardless of peace talks, which is eroding consumer confidence and new investments in the US.
David J. Kostin, the chief U.S. equity strategist at Goldman Sachs, noted on April 4 that the S&P 500 Index will likely close at 4,700 at the end of 2022, which means that stocks will gain only 4% during this year. In Goldman’s “recession scenario”, the S&P 500 will decline 21% further and finish the year at 3,600.
On the other hand, Fundstrat’s Tom Lee stated on April 3 that as long as the United States steers clear of a 2022 recession, the S&P 500 could end the year at 5,100, reflecting potential upside of 13% from current levels. His bullish view is based on the historical resilience of the US stock market in turbulent times. He also pointed to the stock market’s strong forward returns during similar past macroeconomic disturbances.
The broad market selloff has created an attractive buying opportunity in the near-term, especially in high-growth stocks. To realize long-term financial goals, it is important to select stocks based on strong business fundamentals, resilience in high inflationary periods, room for growth, and solid financial positions. Apart from popular US companies like Microsoft Corporation (NASDAQ:MSFT), Moderna, Inc. (NASDAQ:MRNA), and Amazon.com, Inc. (NASDAQ:AMZN), we highlight some of the other top US equities in this article.
Our Methodology
For this list, we focused on small to mid-sized US companies with growth catalysts and solid business fundamentals. Positive analyst ratings and strong hedge fund sentiment were classifiers as well.
Data from 900+ elite hedge funds tracked by Insider Monkey at the end of December 2021 was used to identify the number of hedge funds that hold stakes in each firm.
Best US Stocks to Buy Now
12. Duolingo, Inc. (NASDAQ:DUOL)
Number of Hedge Fund Holders: 12
Duolingo, Inc. (NASDAQ:DUOL) was incorporated in 2011 and is headquartered in Pittsburgh, Pennsylvania. The company operates a language learning application and website, and provides digital language expertise tests.
On March 16, Duolingo, Inc. stock gained when the company’s director, Durable Capital Partners LP, purchased 17,379 shares worth approximately $1.4 million. The shares were bought at $79.84 each. The stock jumped 9.3% on this disclosure, and the shares have climbed more than 18% in the last month.
KeyBanc analyst Justin Patterson upgraded Duolingo, Inc. on March 21 to Overweight from Sector Weight with a $112 price target. The analyst believes product and monetization initiatives can lead Duolingo, Inc. to sustainably grow 30% as the company transitions into a multi-app product line. Keeping in mind the app store changes, the analyst sees potential for Duolingo, Inc. to achieve 35% long-term EBITDA margin.
Among the hedge funds tracked by Insider Monkey, 12 funds were bullish on Duolingo, Inc., with collective stakes worth approximately $360 million, compared to the same number of funds in the prior quarter, holding stakes in the company valued at roughly $184 million. Henry Ellenbogen’s Durable Capital Partners is the leading shareholder of the company, with more than 2 million shares worth $214.73 million.
In addition to Microsoft Corporation, Moderna, Inc., and Amazon.com, Inc., elite investors are piling into Duolingo, Inc..
11. Compass Minerals International, Inc. (NYSE:CMP)
Number of Hedge Fund Holders: 12
Compass Minerals International, Inc. (NYSE:CMP) is a Kansas-based company that markets and distributes essential minerals in the United States, Canada, Brazil, the United Kingdom, and international markets. The company primarily sells salt, magnesium chloride, sulfate of potash, and plant nutrition products.
On February 24, Compass Minerals International, Inc. declared a quarterly dividend of $0.15 per share, in line with previous. The dividend was distributed on March 21, to shareholders of the company as of March 10.
CL King analyst David Silver maintained a Buy recommendation on Compass Minerals International, Inc. and raised the firm’s price target on the shares to $67 from $65 on March 3. Compass Minerals International, Inc.’s valuation appears to be tied to the future prospects for its identified lithium resource and smaller growth initiatives. Multi-year upgrades and operating efficiency improvements are also steadily carried out at its core Goderich salt mine, the analyst told investors.
According to Insider Monkey’s fourth quarter database, 12 hedge funds placed long calls on Compass Minerals International, Inc., compared to 14 funds in the previous quarter. The total stakes held in Q4 amounted to $86.7 million, versus $80 million in Q3. Jeffrey Bronchick’s Cove Street Capital is the leading shareholder of the company, with 587,618 shares worth $30 million.
Here is what Bernzott Capital Advisors US Small Cap Value has to say about Compass Minerals International, Inc. in its Q4 2021 investor letter:
“Compass Minerals (CMP): The salt and plant nutrient producer reported earnings below expectations due to unfavorable weather conditions combined with higher operating costs. Additionally, the company announced a reduction in its quarterly dividend as they refocus capital on growing battery grade Lithium assets. Despite the disappointing results, we continue to view this stock as attractive based on its asset base, strong cash flow characteristics and the potential opportunity to unlock value with the Lithium assets.”
10. Informatica Inc. (NYSE:INFA)
Number of Hedge Fund Holders: 14
Informatica Inc. (NYSE:INFA) is based in Redwood City, California. The company operates an artificial intelligence-powered platform that allows enterprise scalability, data integration, data management, and governance. Informatica Inc.’s Q4 revenue of $406.71 million outperformed market estimates by $10.17 million.
On March 14, RBC Capital analyst Matthew Hedberg maintained an Outperform rating on Informatica Inc. but lowered the firm’s price target on the shares to $29 from $40. The analyst is positive about the continued business momentum and multiple growth avenues at Informatica Inc., including an increasing cloud mix, new logo growth, business expansions, and a significant maintenance conversion opportunity.
In the fourth quarter of 2021, 14 hedge funds were bullish on Informatica Inc., with combined stakes valued at $72.8 million. Informatica Inc.’s initial public offering at the end of December 2021 fetched a valuation of about $8 billion, and it was considered one the most noteworthy IPOs in the tech space.
9. ASGN Incorporated (NYSE:ASGN)
Number of Hedge Fund Holders: 15
ASGN Incorporated (NYSE:ASGN) is a Virginia-based company that provides technology, digital, and creative solutions for commercial and government clients in the United States. The company was incorporated in 1985, and has a market capitalization of $5.83 billion as of April 8.
On January 3, ASGN Incorporated announced a share repurchase program to buy back up to $350 million of its common stock through December 2023. Publishing its Q4 results on February 9, the company posted earnings per share of $1.55, topping market estimates by $0.20. The $1.05 billion revenue increased 4.19% year-over-year, outperforming analysts’ predictions by $26.69 million.
BofA analyst Heather Balsky reinstated coverage of ASGN Incorporated on March 11 with a Buy rating and a $130 price target. The analyst resumed coverage of the information and business services sectors, noting the recent pullback in shares makes the group overall attractive. She favors companies with “clear near-term positive catalysts”. She highlighted ASGN Incorporated as a preferred idea for 2022.
According to the Q4 database of Insider Monkey, 15 hedge funds were bullish on ASGN Incorporated, compared to 11 funds in the earlier quarter. Cliff Asness’ AQR Capital Management is the biggest shareholder of the company, with 86,870 shares worth $10.72 million.
Here is what Baron Small Cap Fund has to say about ASGN Incorporated in its Q3 2021 investor letter:
“Shares of ASGN Incorporated, a leading provider of skilled workers to the IT and digital/creative industries for staffing and consulting work, rose as the company reported strong results for the quarter. Revenues grew 17% and earnings gained 24%, driven by a healthy rebound in the depressed staffing business and a robust 62% organic growth rate in its burgeoning consulting segment. Guidance is for continued strong growth, which we think should greatly surpass industry rates. ASGN closed on the sale of its Oxford division in the third quarter, a strategic decision we like very much, as it will focus the company on higher-growth end-markets and services. After the sale, the company is well capitalized, and management is indicating that it will pursue acquisitions in its consulting and government services segments. We think they have been masterful acquirors in the past. ASGN stock is appreciating not just on the back of strong results but is being re-rated. The company is no longer a cyclical, low-multiple business, but now a strong secular grower, with market-leading capabilities and relationships, serving great end-markets.”
8. FIGS, Inc. (NYSE:FIGS)
Number of Hedge Fund Holders: 16
Founded in 2013 and headquartered in Santa Monica, California, FIGS, Inc. (NYSE:FIGS) is a healthcare apparel and lifestyle company offering lab coats, scrubs, and outerwear. The company markets and distributes its products through its website and mobile application.
On March 8, FIGS, Inc. reported earnings for the fourth quarter of 2021. The company posted an EPS of $0.09, beating estimates by $0.06. The $128.70 million revenue increased 42.7% year-over-year and outperformed market consensus by $644,850. The stock gained 13% after the Q4 results went live.
Truist analyst Beth Reed initiated coverage of FIGS, Inc. with a Buy rating and a $32 price target on April 7. The analyst thinks that FIGS, Inc. can exceed $1 billion in sales by 2025, given market share growth and innovative lifestyle products designed specifically for healthcare professionals. While the stock has been volatile, FIGS, Inc.’s fundamentals remain solid, and it should achieve sector-leading gross margins over the medium term, the analyst told investors in a bullish thesis.
Among the hedge funds tracked by Insider Monkey, 16 hedge funds were bullish on FIGS, Inc. at the end of December 2021, compared to 21 funds in the last quarter. Andreas Halvorsen’s Viking Global held the largest stake in FIGS, Inc., with 14.7 million shares worth $406.3 million.
Just like Microsoft Corporation, Moderna, Inc., and Amazon.com, Inc., FIGS, Inc. is gaining traction among smart investors.
Here is what Baron Opportunity Fund has to say about FIGS, Inc. in its Q4 2021 investor letter:
“During the fourth quarter, the Fund increased its position in Figs Inc., an IPO from earlier in the year, at what we believe were attractive prices for a long term investment. Figs, a founder-led health care apparel and lifestyle brand, is one of the fastest growing and most profitable digitally native, direct-to-consumer companies in the world. The traditional health care apparel market underserved the needs of health care professionals by selling commoditized products through an antiquated distribution network. Figs reimagined the health care professional’s uniform, engineering it for function and style. And by selling directly to consumers, Figs engages with customers in authentic and meaningful ways, giving the company a unique data advantage that the competition cannot replicate. This has enabled the company to maintain best-in-class customer acquisition costs even as it has scaled. With fewer than 2 million active customers out of 21 million health care professionals in the U.S., and even more internationally, we believe Figs has a long growth runway ahead.”
7. Axcelis Technologies, Inc. (NASDAQ:ACLS)
Number of Hedge Fund Holders: 22
Axcelis Technologies, Inc. (NASDAQ:ACLS) is headquartered in Beverly, Massachusetts, operating as a manufacturer of processing equipment used in the production of semiconductor chips in the United States, Europe, and Asia. The company announced dispatching multiple shipments of Purion Power Series implanters to chipmakers and semiconductor manufacturers in the first quarter of 2022.
On March 1, Axcelis Technologies, Inc. announced a new $100 million share repurchase program. The company will fund the stock buy back from its working capital. Since 2019, the company has distributed more than $75 million to shareholders.
The company published its fourth quarter results on February 7, posting earnings per share of $1.05, exceeding consensus estimates by $0.18. Axcelis Technologies, Inc.’s revenue over the period gained 68.32% year-over-year, reaching $205.68 million, outperforming market estimates by $15.64 million.
Riley analyst Craig Ellis raised the price target on Axcelis Technologies, Inc. to $98 from $87 and reiterated a Buy rating on the shares, given his checks, data points, and meetings with the company management.
Among the hedge funds tracked by Insider Monkey, 22 funds reported owning stakes worth $284.5 million in Axcelis Technologies, Inc. at the end of December 2021, compared to the same number of funds in the prior quarter, holding stakes in the company valued at approximately $224 million. Richard Driehaus’ Driehaus Capital is the biggest shareholder of the company, with 1.45 million shares worth $108.5 million.
6. Apellis Pharmaceuticals, Inc. (NASDAQ:APLS)
Number of Hedge Fund Holders: 26
Apellis Pharmaceuticals, Inc. (NASDAQ:APLS) was incorporated in 2009 and is based in Waltham, Massachusetts. Apellis Pharmaceuticals, Inc. is a biopharmaceutical company that develops therapeutic compounds for autoimmune and inflammatory diseases. The Q4 revenue of $60.29 million exceeded estimates by $51.51 million.
On March 24, Apellis Pharmaceuticals, Inc. priced its upsized previously announced public offering of 7.45 million shares at $47 per share. The total offering is worth $350 million. The offer closed on March 28.
Citi analyst Yigal Nochomovitz on March 17 maintained a Buy recommendation on Apellis Pharmaceuticals, Inc. and raised the price target on the shares to $81 from $74, adding the stock to the firm’s “US Focus List”. He believes the 18-month data “substantially erased investor concerns that DERBY was a failed trial” and observed that Apellis Pharmaceuticals, Inc. has “convincingly demonstrated that longer duration magnifies the treatment effect predictably”.
According to the fourth quarter database of Insider Monkey, 26 hedge funds were bullish on Apellis Pharmaceuticals, Inc., compared to 30 funds in the earlier quarter. Kurt Von Emster’s VenBio Select Advisor is the largest shareholder of the company, with 8.5 million shares worth $404.50 million.
Apellis Pharmaceuticals, Inc. is one of the best US stocks to consider for a solid investment portfolio, just like Microsoft Corporation, Moderna, Inc., and Amazon.com, Inc..
5. Centennial Resource Development, Inc. (NASDAQ:CDEV)
Number of Hedge Fund Holders: 28
Centennial Resource Development, Inc. (NASDAQ:CDEV) is a Colorado-based independent oil and natural gas company with interests in properties across the Delaware Basin, Reeves County, West Texas, Lea County, and New Mexico.
The company published its fourth quarter results on February 23, posting GAAP earnings per share of $0.51, beating estimates by $0.23. The $316.42 million revenue increased 113.69% year-over-year, surpassing market consensus estimates by approximately $31 million.
On April 7, Piper Sandler analyst Mark Lear upgraded Centennial Resource Development, Inc. to Overweight from Neutral, lifting the price target to $13 from $10. With Russian oil and product exports off the market, Piper Sandler’s Energy Macro team views the United States as one of the few places to deliver long-term supply growth, the analyst told investors. He thinks that limited supply ultimately drives material upside to crude prices, which has positive implications for companies like Centennial Resource Development, Inc., despite the outperformance in 2022.
John Overdeck and David Siegel’s Two Sigma Advisors is one of the leading stakeholders of Centennial Resource Development, Inc., with 4.35 million shares worth $26 million. Overall, 28 hedge funds held long positions in the stock at the end of December 2021.
4. Globus Medical, Inc. (NYSE:GMED)
Number of Hedge Fund Holders: 29
Globus Medical, Inc. (NYSE:GMED) is a medical device company that produces healthcare solutions and implants for patients with musculoskeletal disorders, spine problems, and orthopedic trauma. The company distributes its products in the United States and international markets.
On March 4, Globus Medical expanded its share repurchase program by authorizing the buy back of $200 million in additional common stock. The company now has $295 million available for repurchases. Its market cap of $7.75 billion has increased 17% as compared to last year.
Wells Fargo analyst Vik Chopra on March 28 initiated coverage of Globus Medical with an Overweight rating and an $80 price target. The analyst cited the company’s consecutively strong EBITDA margin profile, consistent above-market spine growth and share gains, and its unique selling advantage as one of the two organizations to offer a spine robot. With new offerings in its Spine segment, the analyst expects 150 bps of growth in 2023.
According to the fourth quarter database of Insider Monkey, 29 hedge funds were bullish on Globus Medical, with combined stakes valued at $231.3 million. Brian Ashford-Russell and Tim Woolley’s Polar Capital owned the biggest position in the company, holding 754,204 shares worth $54.4 million.
Here is what Madison Small Cap Fund has to say about Globus Medical, Inc. in their Q4 2020 investor letter:
“Healthcare continued its streak of underperformance in the fourth quarter. The biotech industry component of the Russell 2000 was up 34% for the quarter and 53% for the year. While we have become more open to investing in this space where appropriate, we prefer molecular diagnostics given less regulatory risk and better revenue diversification. With the new administration comes a shift in healthcare philosophy. We believe that further access to care and coverage expansion will benefit some parts of the sector. However, the risk of further reimbursement cuts, particularly in pharmaceuticals, will bear monitoring.
Our favorite healthcare stock for 2021 is Globus Medical, a provider of spine implants and robotic solutions in the orthopedic industry. This stock has been a disappointing investment in the three years that we have held it. Though, the company itself has executed extremely well. We think this name is a “coiled spring” in a reopening scenario as management played aggressive offense in 2020. They aggressively have grown their sales force and did not hunker down during the pandemic. Recent quarters suggest that the company has taken considerable share, and this should bear fruit as surgical volumes resume in 2021 and 2022.”
3. Ginkgo Bioworks Holdings, Inc. (NYSE:DNA)
Number of Hedge Fund Holders: 30
Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) was founded in 2008 and is headquartered in Boston, Massachusetts. The company develops a platform for cell programming, serving the specialty chemicals, agriculture, food, consumer products, and pharmaceuticals sectors. Ginkgo Bioworks Holdings, Inc. reported a fourth quarter revenue of $148.49 million, above market consensus by $53.63 million.
On April 5, Ginkgo Bioworks Holdings, Inc. and Twist Bioscience Corporation (NASDAQ:TWST) announced a new agreement that expands the scope of the collaboration between the organizations in the synthetic biology space. This four-year agreement includes an increased commitment by Ginkgo Bioworks Holdings, Inc. to purchase products from Twist, which will allow Ginkgo to meet its anticipated growth targets.
BTIG analyst Mark Massaro maintained a Buy rating on Ginkgo Bioworks Holdings, Inc. on March 31 but slashed the firm’s price target on the shares to $6 from $12. The analyst noted that Ginkgo Bioworks Holdings, Inc.’s fourth quarter results exceeded expectations and the company is experiencing stronger demand now than at any other time in the past. While Ginkgo Bioworks Holdings, Inc.’s platform will be used to help with food security and higher crop yield, his price target cut reflects the broad selloff in biotech.
Among the hedge funds tracked by Insider Monkey in Q4 2021, 30 funds placed long calls on Ginkgo Bioworks Holdings, Inc., with collective stakes amounting to $4.2 billion. This is compared to 32 funds in the prior quarter, holding stakes in Ginkgo Bioworks Holdings, Inc. worth $5.6 billion.
2. The AZEK Company Inc. (NYSE:AZEK)
Number of Hedge Fund Holders: 31
The AZEK Company Inc. (NYSE:AZEK) is an Illinois-based firm that manufactures and sells construction products for residential, commercial, and industrial customers in the United States.
Credit Suisse analyst Daniel Oppenheim initiated coverage of The AZEK Company Inc. on April 5 with an Outperform rating and a $29 price target. The strong housing market and confidence in home values should increase the growth for building products companies, the analyst told investors in a research note. According to Oppenheim, The AZEK Company Inc.’s EBITDA growth should result in further deleveraging.
On February 3, The AZEK Company Inc. published its Q4 results, posting earnings per share of $0.18, above consensus by $0.02. Revenue over the period came in at approximately $260 million, up 22.34% from the prior-year quarter, topping market estimates by $3.01 million.
Insider Monkey’s fourth quarter database suggests that 31 hedge funds were bullish on The AZEK Company Inc., with combined stakes valued at $418.5 million. Anand Parekh’s Alyeska Investment Group held the largest position in the company, with 1.5 million shares worth more than $70 million.
Here is what Baron Funds has to say about The AZEK Company Inc. in its Q2 2021 investor letter:
“The AZEK Company Inc.: AZEK is a leading manufacturer of outdoor, non-wood building products including decking, railing, trim, and other leading outdoor products. 95% of cash flow is generated from the U.S. residential housing market. We believe the company has a compelling multi-year strategic growth plan that should result in strong share price appreciation in the next few years.”
1. Denbury Inc. (NYSE:DEN)
Number of Hedge Fund Holders: 32
Denbury Inc. (NYSE:DEN) was incorporated in 2003 and is headquartered in Plano, Texas, operating as an independent energy company in the Gulf Coast and Rocky Mountain regions. The company also owns interests in multiple oil and natural gas properties located in the United States.
Roth Capital analyst John White upgraded Denbury Inc. to Buy from Neutral ahead of the company’s earnings report, citing higher crude oil futures and lower debt levels for raising the price target on the shares to $87.75 from $78.75. The company’s balance sheet is “in great shape” and he sees further longer-term upside from Denbury Inc.’s growing CCUS effort, the analyst added.
On February 24, Denbury Inc. reported its fourth quarter results, posting a GAAP EPS of $2.19, beating estimates by $1.44. Revenue jumped 83.64% year-over-year to $361.90 million, outperforming estimates by $47.95 million.
According to Insider Monkey’s Q4 database, Edward A. Mule’s Silver Point Capital is the leading stakeholder of Denbury Inc., with 3.8 million shares worth $292.5 million. Overall, 32 hedge funds reported owning stakes worth more than $1 billion in Denbury Inc. at the end of December 2021.
You can also take a look at 10 Dividend Growth Stocks Popular on Robinhood and 10 Dividend Paying Consumer Defensive Stocks.
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This article is originally published at Insider Monkey.
