In this article, we will be taking a look at 5 stocks that will skyrocket. To read our detailed analysis of cheaply-valued stocks that are set to gain in the future, you can go directly to see 10 Stocks That Will Skyrocket.
5. Shopify Inc. (NYSE:SHOP)
Number of Hedge Fund Holders: 72
Share price as of August 10: $40.19
Shopify Inc. (NYSE:SHOP) is an IT company operating an e-commerce platform accessible to users in Canada, the U.S, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. The company sells custom themes and apps, alongside the registration of domain names. There were 72 hedge funds long Shopify Inc. (NYSE:SHOP) in the first quarter, owning a collective $5.8 billion in shares.
On August 11, Atlantic Equities analyst Kunaal Malde upgraded shares of Shopify Inc. (NYSE:SHOP) from ‘Neutral’ to ‘Overweight’. Malde also placed a $46 price target on the stock.
Shopify Inc.’s (NYSE:SHOP) revenue was $1.3 billion in the second quarter, up 15.7% year-over-year. The company’s EPS is also set to grow by 35.7% over the next three-to-five years. The three-year CAGR for the company is 53% as of this August.
Rowan Street Capital LLC, an investment management firm, mentioned Shopify Inc. (NYSE:SHOP) in its second quarter 2022 investor letter. Here’s what the fund said:
“Tobias Lutke, Shopify (NYSE:SHOP) Founder and CEO
When Tobias Lütke opened an online snowboarding store in 2004, he realized how painfully cumbersome e-commerce software was. So he decided to create Shopify – a platform that made it easy for anyone to open up an online store.
Tobi has built Shopify into one of the most popular e-commerce platforms in the world, with $175 billion in GMV (Gross Merchandise Value) and $4.6 billion in revenues in 2021. SHOP went public in 2015, when revenues were just lightly above $200 million, and the stock is up 1,233% since its IPO. Shopify stock peaked in November 2021 (traded at astronomical 47x sales), which coincided with peak enthusiasm for the tech-driven, “stay-home” stocks. Since then, the stock is down almost 80% and is currently trading at just 6x 2023E sales. We believe that Mr. Market is offering us an exceptional value, at current price levels, for an exceptional company led by a very talented, visionary founder/CEO.”
4. Roblox Corporation (NYSE:RBLX)
Number of Hedge Fund Holders: 40
Share price as of August 10: $46.05
Roblox Corporation (NYSE:RBLX) is a communication services company operating an online entertainment platform. The company’s main product is Roblox Studio, a free toolset allowing users to build, publish, and operate 3D experiences and other content.
In the second quarter, Roblox Corporation (NYSE:RBLX) grew its revenue to $639.9 million, beating estimates by $13.7 million. The company had year-over-year revenue growth of 57.3%. Roblox Corporation (NYSE:RBLX) has been steadily increasing its daily active users (DAUs) because of the uniqueness of its platform. Between 2018 and 2021, the company’s DAUs grew from 10.3 million to 42.1 million. The company’s growth during the pandemic was significant, standing at 82% year-over-year in 2020, and 140% year-over-year in 2021. The company’s revenue is expected to rise another 186% to $2.7 billion this year.
Out of 912 hedge funds that filed 13Fs in the first quarter, 40 funds were long Roblox Corporation (NYSE:RBLX), owning $1.8 billion in shares. In comparison, 61 hedge funds held stakes in the company in the previous quarter, with a total stake value of $4.03 billion.
3. Micron Technology, Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 78
Share price as of August 10: $61.37
Chipmaker Micron Technology, Inc. (NASDAQ:MU), another IT company on our list, is based in Boise, Idaho. It operates through its Compute and Networking Business Unit, Mobile Business Unit, Storage Business Unit, and Embedded Business Unit to provide memory and storage technologies.
Analyst Vijay Rakesh at Mizuho reiterated a ‘Buy’ rating on Micron Technology, Inc. (NASDAQ:MU) shares on August 10. The analyst also holds a $75 price target on the stock. Our hedge fund data for the first quarter shows 78 hedge funds long Micron Technology, Inc. (NASDAQ:MU), with their total stakes valued at $3.4 billion.
Micron Technology, Inc. (NASDAQ:MU) has enjoyed year-over-year revenue growth of 27.1%, and expectations are that the company will deliver EPS growth of 7.3% over the next three-to-five years. This May, the company noted that 42% of its 2025 revenue would come from its data center and graphics division, limiting losses from its consumer business division. Micron Technology, Inc. (NASDAQ:MU) also told investors that it sees robust growth for its DRAM and NAND memory chips in the next few years.
2. ON Semiconductor Corporation (NASDAQ:ON)
Number of Hedge Fund Holders: 48
Share price as of August 10: $66.33
ON Semiconductor Corporation (NASDAQ:ON) is an information technology company providing intelligent sensing and power solutions globally. The company is based in Phoenix, Arizona. There were 48 hedge funds holding stakes in ON Semiconductor Corporation (NASDAQ:ON) in the first quarter, compared to 47 hedge funds in the previous quarter. Their total stake values were $1.3 billion and $1.6 billion respectively.
On August 2, Mark Lipacis, an analyst at Jefferies, kept a ‘Buy’ rating on ON Semiconductor Corporation (NASDAQ:ON). Lipacis also raised his price target on the stock from $75 to $77.
ON Semiconductor Corporation (NASDAQ:ON) had EPS of $1.30 in Q2, beating estimates by $0.10. The company’s revenue was $2.1 billion, up 24.9% year-over-year and topping estimates by $70.7 million. The company is expected to generate 21.5% EPS growth over the next three-to-five years. As of this August, the company’s year-over-year cash flow growth is 88.9%, while the industry average stands at 41.2%.
Artisan Partners, a high value-added investment management firm, mentioned ON Semiconductor Corporation (NASDAQ:ON) in its fourth quarter 2021 investor letter. Here’s what it said:
“ON Semiconductor is a global supplier of advanced semiconductors for sophisticated electronics applications within the automotive, industrial, communications, consumer and computing end-product markets. The company operates across three segments: power solutions, advanced solutions and intelligent sensing. A new management team, which took over toward the end of 2020, is working to dramatically improve the company’s performance by rightsizing its manufacturing footprint, exiting more commoditized products and investing in several compelling growth opportunities. When the dust has settled, we expect the portfolio to be more focused on the auto and industrial segments. As auto OEMs incorporate more automated safety technology and car fleets transition from internal combustion engines to battery electric vehicles, ON’s image sensors for cars and silicon carbide inverters— which extend EV battery efficiency—will be in high demand. This mix shift should drive ON’s margins higher over time. With shares trading at an attractive valuation, we initiated a GardenSM position.”
1. Block, Inc. (NYSE:SQ)
Number of Hedge Fund Holders: 84
Share price as of August 10: $88.54
Block, Inc. (NYSE:SQ), a data processing company, creates tools to help sellers accept card payments. The company also provides hardware products like its Magstripe reader, enabling swiped transactions of magnetic stripe cards. Out of 912 hedge funds, 84 were long Block, Inc. (NYSE:SQ) in the first quarter of 2022, with their combined stakes valued at $6.2 billion.
A ‘Buy’ rating was reiterated on Block, Inc. (NYSE:SQ) shares on August 8 by analyst Dan Dolev at Mizuho. The analyst also holds a $125 price target on the stock. The company’s three-year sales growth CAGR is 65% as of 2022. Block, Inc.’s (NYSE:SQ) EPS for the second quarter was $0.20, beating estimates by $0.02, while its revenue was $4.4 billion, beating estimates by $69.5 million. The company’s EPS has positive growth prospects over the next three-to-five years, as it’s estimated to rise by 12.7% over that period.
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