In this article, we discuss 10 strong buy stocks to invest in now according to Reddit.
The first half of 2022 was decidedly one of the worst on record in terms of corporate performance and deteriorating macroeconomic environment. However, retail investors have been strengthening their long positions as an upcoming recession threatens a downturn in US equities yet again. For the three months ending May, retail investors purchased stocks worth $76 billion. The market turbulence did not stop novice traders from loading up on growth and tech equities when the S&P 500 benchmark came close to announcing a bear territory.
In March, retail investors poured a net $28 billion into tech-heavy US securities, which is the largest monthly investment since Vanda Research began tracking retail activity in 2014. In April, May, and June, retail traders put $25 billion a month on average in the stock market, up drastically from the pre-pandemic levels, where monthly average stock market activity came in at $3 billion in 2019. The market selloff, paired with rampant inflation and rising rates, has battered growth stocks and significant market players are now trading at large discounts.
Reddit is an internet platform where retail investors often share their trades, discuss possible portfolio positions, celebrate their stock market triumphs, and bemoan their trade losses. Reddit forums are abuzz with potential stock market plays that the retail investors are extremely fond of, as these companies seem to be trading at attractive valuations and the beaten down stock prices create solid buying opportunities. Some of the strong buy stocks to invest in now according to Reddit include Alphabet Inc. (NASDAQ:GOOG), The Walt Disney Company (NYSE:DIS), and Intel Corporation (NASDAQ:INTC).
Photo by Chris Liverani on Unsplash
Our Methodology
We used the r/Stocks subreddit for our research for this article, selecting the most prominent and commonly purchased stocks by the community members. These stocks have strong growth prospects for the future and also received positive ratings from market analysts recently.
Strong Buy Stocks to Invest in Now According to Reddit
10. AMN Healthcare Services, Inc. (NYSE:AMN)
Number of Hedge Fund Holders: 25
AMN Healthcare Services, Inc. (NYSE:AMN) was founded in 1985 and is based in Dallas, Texas. The company offers healthcare staffing services to hospitals and healthcare facilities in the United States, operating through three segments – Nurse and Allied Solutions, Physician and Leadership Solutions, and Technology and Workforce Solutions. AMN Healthcare Services, Inc. (NYSE:AMN) announced a $250 million share repurchase program in mid-June and the company more than doubled its revenue in Q4 2021 amid the pandemic-related staffing shortages.
According to Redditors, the labor situation in the United States is bleak and more people are moving away from the healthcare sector. Since it takes extensive training to become a healthcare professional, the healthcare staffing companies who can recruit and deploy the most workforce will grow and print money rapidly in the future. While HCA has recently pointed towards easing labor pressures in the healthcare space, Redditors believe that healthcare professionals, specially at-home staff or nurses, will be too expensive to hire and the labor market will once again be pressurized, paving the way for AMN Healthcare Services, Inc. (NYSE:AMN).
According to Insider Monkey’s data, 25 hedge funds were bullish on AMN Healthcare Services, Inc. (NYSE:AMN) at the end of the first quarter of 2022, compared to 28 funds in the prior quarter. Billionaire Israel Englander’s Millennium Management is the leading position holder in the company, with 890,147 shares worth about $93 million.
In addition to Alphabet Inc. (NASDAQ:GOOG), The Walt Disney Company (NYSE:DIS), and Intel Corporation (NASDAQ:INTC), Redditors are lately bullish on AMN Healthcare Services, Inc. (NYSE:AMN).
Polen Capital Management mentioned AMN Healthcare Services, Inc. (NYSE:AMN) in its Q3 2020 investor letter. Here is what the firm said:
“AMN Healthcare Services also contributed during the quarter. As a leading provider of healthcare workforce solutions and staffing services in the U.S., the business has experienced substantial dislocation because of COVID-19. Still, the company has adapted, adding services like telehealth and audio/video interpretation services, and deepened and expanded its relationships. While demand for its services remains depressed, order flows are beginning to resume. Over the long-term, we believe its competitive position along with secular tailwinds should continue to drive demand for the company’s services and solutions.”
9. GFL Environmental Inc. (NYSE:GFL)
Number of Hedge Fund Holders: 27
GFL Environmental Inc. (NYSE:GFL) operates as a diversified environmental services company in Canada and the United States. The company specializes in non-hazardous solid waste management, infrastructure and soil remediation, and liquid waste management services. It is headquartered in Vaughan, Canada. On July 27, GFL Environmental Inc. (NYSE:GFL) reported Q2 2022 earnings per share of $0.19 and a revenue of $1.33 billion, above Street consensus by $0.04 and $116.97 million, respectively.
Redditors observed that GFL Environmental Inc. (NYSE:GFL)’s main strategy is to grow by acquisition and one day they will own a big share of the waste management market. The Reddit investors called GFL Environmental Inc. (NYSE:GFL) a gold mine, since everyone makes waste and companies will mine plastics and metals from these dumps, and use methane for natural gas production as well. This will give greater revenue streams to GFL Environmental Inc. (NYSE:GFL) in the future.
Among the hedge funds tracked by Insider Monkey, GFL Environmental Inc. (NYSE:GFL) was part of 27 public stock portfolios at the end of Q1 2022, compared to 30 funds in the earlier quarter. Robert Pohly’s Samlyn Capital is the leading stakeholder of the company, with 4.16 million shares worth $135.6 million.
8. United States Steel Corporation (NYSE:X)
Number of Hedge Fund Holders: 37
United States Steel Corporation (NYSE:X) is a Pennsylvania-based company that manufactures and sells flat-rolled and tubular steel products in North America and Europe. The company declared on July 28 a $0.05 per share quarterly dividend, which is payable on September 8 to shareholders of record as of August 8. United States Steel Corporation (NYSE:X) posted a Q2 EPS of $3.86, in-line with estimates. The revenue of $6.29 billion gained 25.17% year over year and exceeded market consensus by $468.84 million. The company also announced a $500 million repurchase authorization. With a price to earnings ratio of just 1.36, Redditors are interested in United States Steel Corporation (NYSE:X)’s attractive valuation relative to earnings potential and its steady dividend payment.
On July 6, Morgan Stanley analyst Carlos De Alba maintained an Equal Weight rating on United States Steel Corporation (NYSE:X) and lowered the price target on the stock to $20 from $27. Steel prices have dropped swiftly from their March highs and he is marking-to-market his steel and scrap price forecasts for 2022 and 2023, and reducing estimates and price targets across his Americas Steel coverage, the analyst told investors.
Among the hedge funds tracked by Insider Monkey, United States Steel Corporation (NYSE:X) was part of 37 funds in the first quarter of 2022, compared to 39 funds in the earlier quarter. Eric W. Mandelblatt’s Soroban Capital Partners is the biggest position holder in the company, with 11.6 million shares valued at roughly $441 million.
7. Academy Sports and Outdoors, Inc. (NASDAQ:ASO)
Number of Hedge Fund Holders: 40
Academy Sports and Outdoors, Inc. (NASDAQ:ASO) is a Texas-based retailer of sporting goods and outdoor recreational products. Redditors were bullish on Academy Sports and Outdoors, Inc. (NASDAQ:ASO) as the stock has gained about 17% in the last year and its financials are solid. Some Redditors said that they had loaded up on Academy Sports and Outdoors, Inc. (NASDAQ:ASO) when it was trading in the $30 range, and they wish they had purchased more of the stock back then. The Reddit community claimed that they preferred Academy Sports and Outdoors, Inc. (NASDAQ:ASO) over other sporting goods companies including DICK’S Sporting Goods, Inc. (NYSE:DKS) and Hibbett, Inc. (NASDAQ:HIBB).
On June 8, Stephens analyst Daniel Imbro raised the price target on Academy Sports and Outdoors, Inc. (NASDAQ:ASO) to $72 from $70 and reiterated an Overweight rating on the shares after the company reported “another strong quarter” and gave better-than-expected margin guidance that he sees as “evidence of the self-help initiatives management has discussed since the IPO”. The quarterly results boost his confidence that Academy Sports and Outdoors, Inc. (NASDAQ:ASO) is maintaining share gains and he believes the present valuation remains largely discounted given the quality of the business.
According to Insider Monkey’s data, 40 hedge funds were long Academy Sports and Outdoors, Inc. (NASDAQ:ASO) at the end of March 2022, compared to 47 funds in the earlier quarter. Shellback Capital is a notable stakeholder of the company, with 1.20 million shares worth $47.2 million.
6. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 60
Walmart Inc. (NYSE:WMT) is an American retailer that operates through three segments – Walmart U.S., Walmart International, and Sam’s Club. Redditors believe that Walmart Inc. (NYSE:WMT) stock is always a buy, and provides great value especially at the current prices. The discounted price, paired with the valuation and scale of operations, makes Walmart Inc. (NYSE:WMT) an attractive stock for many Redditors.
On July 27, Deutsche Bank analyst Krisztina Katai reiterated a Buy rating on Walmart Inc. (NYSE:WMT) but lowered the price target on the shares to $142 from $166. The company reassured investors about their biggest concern coming out of the Q1 earnings season, confirming that it did not slash its guidance due to internal factors such as the surplus discretionary inventory. Walmart Inc. (NYSE:WMT)’s guidance update actually indicates a larger softening within the retail space, especially among the low to middle-income consumers who are increasingly pressured by soaring inflation and the outrageous gas prices, the analyst told investors in a research note.
Among the hedge funds tracked by Insider Monkey, Rajiv Jain’s GQG Partners is the leading stakeholder of Walmart Inc. (NYSE:WMT), with 15.4 million shares worth about $2.3 billion. Overall, 60 hedge funds were bullish on Walmart Inc. (NYSE:WMT) at the end of Q1 2022, compared to 63 funds in the prior quarter.
Like Alphabet Inc. (NASDAQ:GOOG), The Walt Disney Company (NYSE:DIS), and Intel Corporation (NASDAQ:INTC), retail investors are piling into Walmart Inc. (NYSE:WMT).
5. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 73
QUALCOMM Incorporated (NASDAQ:QCOM) is a California-based technology firm that develops and commercializes integrated circuits and system software for the wireless industry worldwide. While the Q2 2022 earnings and revenue exceeded Wall Street consensus, the company said adjusted earnings for Q3 2022 would fall between $3 and $3.30 per share, and revenue is expected to clock in between $11 billion and $11.8 billion. Whereas, analysts predicted earnings per share of $3.25 and $11.86 billion in revenue. On July 29, DZ Bank analyst Ingo Wermann downgraded QUALCOMM Incorporated (NASDAQ:QCOM) to Hold from Buy with a $150 price target.
Redditors see QUALCOMM Incorporated (NASDAQ:QCOM)’s P/E ratio of only 13 as a positive indicator, in addition to a steady dividend stream. QUALCOMM Incorporated (NASDAQ:QCOM) is an integral supplier of modems to Apple Inc. (NASDAQ:AAPL) and Samsung, which positions it as one of the best tech stocks according to Redditors. Moreover, the Reddit community believes that the impact of the 5G upgrade is not yet understood widely enough to have properly valued the top companies such as QUALCOMM Incorporated (NASDAQ:QCOM).
According to Insider Monkey’s data, 73 hedge funds were bullish on QUALCOMM Incorporated (NASDAQ:QCOM) at the end of March 2022, compared to 75 funds in the last quarter. Alkeon Capital Management is the leading stakeholder of the company, with 4.10 million shares worth $626.7 million.
Here is what ClearBridge Investments Large Cap Value Strategy has to say about QUALCOMM Incorporated (NASDAQ:QCOM) in its Q4 2021 investor letter:
“Market strength continued in the fourth quarter, with only the communication services sector down in the Russell 1000 Value Index. Portfolio returns benefited from the strong performance of semiconductor maker Qualcomm, which has executed exceptionally well in pursuing the transition to 5G, growing both content and share due to its leadership position in cellular technology. The chipmaker recently outlined a number of peripheral growth opportunities outside of mobile markets, including automotive (where it hopes to leverage its strong presence in the automotive infotainment space into advanced driver assistance systems), Internet of Things (including opportunities in the PC market, VR/AR market, and factory automation) and radio frequency (where mmWave adoption globally, including China, would drive substantial upside).”
4. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 76
Intel Corporation (NASDAQ:INTC) is a California-based company that manufactures and sells computer products and technologies worldwide. Redditors believe that Intel Corporation (NASDAQ:INTC) is attractively valued with a P/E ratio of 8 and a 4% dividend yield. According to the Reddit community, Intel Corporation (NASDAQ:INTC) will likely be the largest benefactor of the chips bill, and will be the leading chip producer in the US supplying to all the major markets at a time when competitors are looking to exit unstable international markets.
Northland analyst Gus Richard on July 29 maintained an Outperform rating on Intel Corporation (NASDAQ:INTC) and lowered the price target on the stock to $55 from $62 after the company missed Q2 expectations and “guided down by a lot”. There “really is no plausible excuse for not pre-announcing the quarter,” which “brings into question the company’s ability to forecast the next 90 days and understanding the role of IR,” said the analyst. Intel Corporation (NASDAQ:INTC) forecasts that Q2 and Q3 will be the bottom, and the analyst hopes that products built on Intel 4 and Intel 3 “will help turn the tide”, while reiterating that “no one said turnarounds were easy”.
Among the hedge funds tracked by Insider Monkey, Seth Klarman’s Baupost Group is the leading stakeholder of Intel Corporation (NASDAQ:INTC), with 16.5 million shares worth $822.3 million. Overall, 76 hedge funds were bullish on the stock at the end of March 2022, up from 72 funds in the prior quarter.
Here is what O’Keefe Stevens Advisory has to say about Intel Corporation (NASDAQ:INTC) in its Q1 2022 investor letter:
“Intel announced they are removing stock-based compensation from non-GAAP earnings in 2022 to report results aligning with semiconductor peers. This may seem like a reasonable thing to do as comparability between peers becomes easier. On the other hand, what exactly is the point of adjusted earnings? It is not to conform to some industry norm or because the management teams need to make performance metrics. The point of adjusting earnings is to present results in a light that more closely reflects the actual underlying performance of the business. That is, backing out expenses that might be one-time in nature, such as legal or fire expenses. First off, share-based compensation is an actual expense. Decreasing my ownership stake in a company without receiving any compensation is not free. If a company paid its employees in all stock, would they add back the entire SBC? What a margin profile that would be. Second, should a company be worried about reporting results similar to other companies? Every company is unique. Management should not waste time determining what expenses should be excluded. Run the business, don’t worry about adjusting the numbers.”
3. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 83
Advanced Micro Devices, Inc. (NASDAQ:AMD) is an American multinational semiconductor company. Redditors believe in the long-term potential of Advanced Micro Devices, Inc. (NASDAQ:AMD), and since the stock is already down 35% year to date as of August 1, they think it will bounce up a little better even despite a recession. Reddit investors also believe that the company is one of the best boutique PC gamers in the market and once it starts making GPUs, it will possibly outperform NVIDIA Corporation (NASDAQ:NVDA).
On July 20, Deutsche Bank analyst Ross Seymore reiterated a Hold rating on Advanced Micro Devices, Inc. (NASDAQ:AMD) and lowered the price target on the shares to $85 from $115. The current “purgatory” stage of the semiconductor cycle prevails heading into the Q2 earnings season, the analyst told investors. Despite expecting positive activity across most of the sector in Q2 and Q3, the analyst said that investors appear to be waiting for a “widespread deck-clearing” guide-down before buying semi stocks again.
According to Insider Monkey’s data, 83 hedge funds were long Advanced Micro Devices, Inc. (NASDAQ:AMD) at the end of Q1 2022, up from 69 funds in the earlier quarter. Ken Fisher’s Fisher Asset Management featured as the leading stakeholder in the company, with 24.3 million shares worth $2.6 billion.
Here is what Carillon Tower Advisers has to say about Advanced Micro Devices, Inc. (NASDAQ:AMD) in its Q4 2021 investor letter:
“Advanced Micro Devices (AMD) supplies semiconductor chips for central processing units (CPUs) and graphic processing units (GPUs). The firm has been gaining share against its primary competitor in the datacenter server CPU space, as this rival has been unable to match the design and manufacturing capabilities of AMD and its partners. Investors are also looking forward to the closing of the previously announced merger with a semiconductor manufacturer that is another one of the portfolio’s holdings. The merger will increase AMD’s capabilities in the Field Programmable Gate Array (FPGA) chip space, and the combined company should possess the potential to win additional market share in the datacenter chip market.”
2. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders: 113
The Walt Disney Company (NYSE:DIS) operates as an entertainment company worldwide. Redditors observed that Disney+ only recently launched in most of the European Union at a reasonable price, while long-term subscribers of Netflix, Inc. (NASDAQ:NFLX) are giving up on their subscriptions due to the increasing fees. Additionally, the impact of COVID-19 on footfall in Disneyland and Parks is now very limited and the company has a bright future ahead, according to the Reddit community members.
On July 26, Goldman Sachs analyst Brett Feldman reaffirmed a Buy rating on The Walt Disney Company (NYSE:DIS) but lowered the price target on the stock to $130 from $148. The analyst slashed linear TV advertising revenue estimates across his media coverage to account for a likely economic slowdown. The revisions are in line with the challenges the analyst projects based on the historical relationship between macroeconomic patterns and TV advertising.
Among the hedge funds tracked by Insider Monkey, David Goel and Paul Ferri’s Matrix Capital Management is the largest shareholder of the company, with 6.33 million shares worth $868.2 million. Overall, 113 hedge funds were bullish on The Walt Disney Company (NYSE:DIS) at the end of Q1 2022.
Here is what Oakmark Fund has to say about The Walt Disney Company (NYSE:DIS) in its Q2 2022 investor letter:
“Disney (NYSE:DIS) is one of the most beloved consumer companies in the world. Its media business has a rich library of intellectual property, which provides a powerful engine for creating new content across the Disney, Pixar, Marvel, and Star Wars brands. This content also contributes to the success of Disney’s theme parks, which generated nearly half the company’s earnings and grew more than 10% annually in the decade prior to the pandemic. Shares have fallen nearly 50% over the past year as investors worried about the company’s ability to transition its media business to a direct-to-consumer streaming world. This transition has required management to make investments in its Disney+ streaming service that are depressing profitability today. However, we believe these investments will ultimately produce attractive returns as Disney+ continues to grow subscribers and increase pricing over time. As a result, we were able to purchase shares at a substantial discount to our estimate of intrinsic value.”
1. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 160
Redditors believe that Alphabet Inc. (NASDAQ:GOOG) is a steal at its current price, which is about 20% down year to date as of August 1. The retail investors think that Alphabet Inc. (NASDAQ:GOOG) is an extremely well diversified company and it maintains its core positions well, with 10 different products and services that have more than a billion active users. This is a market position that no competitors have yet achieved. The Reddit community observed that Google Workspace is trending now among millennials and Gen Z alike, and the latter do not actively use Microsoft Office at all.
On July 27, JPMorgan analyst Doug Anmuth said Alphabet Inc. (NASDAQ:GOOG) reported “solid results in an increasingly uncertain macro environment”. Despite the overall robustness in Q2, Alphabet Inc. (NASDAQ:GOOG)’s management used the term “uncertain/uncertainty” 13 times during its conference call to reflect the global macro outlook, the analyst told investors. However, the guidance for the second half of 2022 “could have been worse”, reiterated the analyst, while keeping an Overweight rating on the shares with a $140 price target.
According to Insider Monkey’s Q1 data, 160 hedge funds were bullish on Alphabet Inc. (NASDAQ:GOOG), up from 158 funds in the preceding quarter. Chris Hohn’s TCI Fund Management held a prominent stake in the company, comprising 2.3 million shares worth $6.6 billion.
Here is what Wedgewood Partners has to say about Alphabet Inc. (NASDAQ:GOOG) in its Q2 2022 investor letter:
“Alphabet grew its core search revenues +24% on a +30% year-ago comparison. Despite this stellar top-line performance, shares sold off as the market began to discount fears of a recession. However, the stock has outperformed relative to other holdings as core Google Search has been less affected by disruptions related to Apple’s privacy initiatives. Alphabet’s Cloud segment is generating revenue at a $24 billion run rate but is still running at a loss. We think this business can generate much better margins at some point. In the meantime, the Company has 4% to 5% of shares authorized for repurchase which is an attractive use of capital as the stock trades for about just 18X 2023 consensus estimates.”
You can also take a look at 10 Buy-The-Dip Restaurant Stocks to Invest In Now and 10 Best Stocks For Inflation According to Redditors.
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Disclosure: None. 10 Strong Buy Stocks to Invest in Now According to Reddit is originally published on Insider Monkey.
