We recently published a list of 10 Best Single Digit Stocks To Buy Now. In this article, we are going to take a look at where Hawaiian Electric Industries, Inc. (NYSE:HE) stands against other best single digit stocks to buy now.
The US markets had a blockbuster 2024, led by a strong show by the technology sector. The broader market grew by over 23% during the year after rising 24% in 2023. Two consecutive years of over 20% gains marked the market’s best performance in nearly three decades.
READ ALSO: 12 Best Long-Term Penny Stocks to Buy According to Hedge Funds and 10 Best Penny Stocks to Buy for 2025.
Stocks have benefited from a resilient American economy that steered clear of recession. Waning inflation and interest rate cuts also bolstered investor sentiment throughout last year. Research analysts anticipate continued growth in 2025 amid strong economic data and anticipation of a business-friendly Trump administration.
In a note on December 30, Wedbush Securities analyst, Dan Ives, said that he expects tech stocks to surge 25% this year with the incoming Trump administration focusing on slashing unnecessary regulations.
Todd Rosenbluth, the head of research at VettaFi, believes 2025 could be the year for small-cap stocks with solid underlying fundamentals. He expects ETFs specializing in small-caps to make gains as investors broaden their market exposure as interest rates ease.
Rosenbluth shared the following remarks while talking to CNBC in late November.
“Small caps are going to become more in favor in 2025. They started to perk up since the election and heading into the election as interest rates have been coming down.”
Fundstrat’s Tom Lee also shares similar sentiments. In an interview in November, he said that small-cap stocks could soar in the coming years under the new administration, driving monster returns.
“I do think there’s still a lot of upside. So I think small-caps could, over the next couple of years, outperform by more than 100%.”
On the other hand, some Wall Street analysts are cautious about the new year and have warned of potential downsides, with the incoming administration promising new tariffs. Following his election victory, President-elect Trump vowed to impose steep tariffs on imports from Canada, China, and Mexico, which could increase costs for manufacturers. Ongoing geopolitical tensions in different parts of the world could also hurt the stock market.
Jurrien Timmer, Director of Global Macro for Fidelity Management & Research Company wrote the following in a note on December 18.
“Personally, I am bullish on stocks for 2025, though with valuations high and the bull market maturing, I don’t think investors should expect quite such spectacular returns next year as we have seen this past year. And I think there are important risks from inflation, and the market’s concentration, to be aware of.”
Methodology
For this article, we sifted through screeners to get a list of stocks priced greater than $1 and less than $10, with a low forward price-earnings ratio (<15) and institutional ownership of over 70%. From there, we selected the 10 stocks with the highest number of hedge fund investors, based on Insider Monkey’s database of over 900 prominent hedge funds as of Q3 2024.
The 10 best single digit stocks to buy now have been ranked in ascending order based on the number of hedge funds holding stakes in them. Where two or more stocks were tied on hedge fund sentiment, we used a higher market cap as a tiebreaker between them. Please note that all data is as of the close of day on Friday, December 27, 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
An engineer standing in front of a detailed control panel with the logo of the electric utility in the background, highlighting the innovation and technical expertise of the company.
Hawaiian Electric Industries, Inc. (NYSE:HE)
Share Price as of December 27: $9.94
Number of Hedge Fund Holders: 32
Hawaiian Electric Industries, Inc. (NYSE:HE) is a holding company, headquartered in Honolulu, that is engaged in electric utility, banking, and sustainable infrastructure businesses through its subsidiaries. It is the largest supplier of electricity in the state of Hawaii.
On December 31, the company announced that it would sell 90.1% of the stake in its bank subsidiary, American Savings Bank, to individual investors for $450 million. The bank would keep its current management and branches. It retained 9.9% of the common stock. No other investor owns a greater share.
The bank’s sale would allow the company to enhance its focus on the utility side of the business as it strives to recover from the 2023 Maui wildfires and improve its financial position. Hawaiian Electric Industries, Inc. (NYSE:HE) was hit with a series of lawsuits after investigators stated the wildfires, which killed more than 100 people, resulted from a downed power line.
On November 8, the company announced financial results for the third quarter of 2024. It reported a consolidated net loss of $104.4 million, or 91 cents per share. Two one-time losses occurred during the quarter. The first was a $203 million pretax loss related to wildfire liabilities, while the second was a $35.2 million pretax asset impairment at Pacific Current.
During Q3, Hawaiian Electric Industries, Inc. (NYSE:HE) entered into a definitive $1.99 billion settlement agreement with plaintiffs in the Maui wildfire tort litigation, a significant step toward financial recovery. The company ended the quarter in an improved cash position, with the holding company and the utility having $678 million and $148 million of cash on hand, respectively.
While Wall Street analysts have a consensus Hold rating for the stock, they anticipate an average share price upside potential of 14%. According to Insider Monkey’s database for Q3 2024, 32 hedge funds held a stake in the company, making HE one of the best single digit stocks to buy now.
Overall, HE ranks 7th on our list of best single digit stocks to buy now. While we acknowledge the potential of human capital technology companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than HE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.