In this article, we will discuss 12 best stocks that are on the rise. If you want to explore similar stocks, you can also take a look at Stocks On The Rise: 5 Best To Buy Now.
The Fed just bumped up interest rates by 75 basis points, the fourth time in a row. Effective on November 3, the benchmark federal fund’s rate is now in a range between 3.75% and 4%. The reverberations of this are being felt in the equities market. The expensive borrowing costs are hurting corporate earnings and becoming a hurdle in business expansion and growth. Investors are left befuddled as to where to park cash in the current macro environment, where fixed income has started to look more attractive than its higher-returning counterparts.
“If I Had More Money To Invest, I Would Invest It”
On November 4, billionaire investor and founder of Baron Capital, Ron Baron, made an appearance on CNBC where he discussed his stock-picking style and his overall take on the stock market. Baron Capital is a research-oriented investment management firm based in New York that manages over $39 billion as of the second quarter of 2022. As of 2022, Ron Baron’s net worth sits at $4.9 billion. Ron Baron is a vocal long-term investor and believes that owning quality businesses over a long-term time horizon is a gateway to generating stellar returns in the stock market while getting through economic challenges. Ron Baron noted that “last November, you couldn’t find things (stocks) that were cheap” and “now you can’t find things (stocks) that are expensive”. The recent share price weakness, according to Ron Baron, is an optimal buying opportunity for the long-term investor. He said, “if I had more money to invest, I would invest it.”
Equities are getting hammered, bond yields are going up, and the dollar is not showing any signs of weakness. As of November 4, the S&P 500 has tumbled over 21% since the beginning of the year, the Dow has shed over 11% of its value year to date, and the Nasdaq is down roughly 34% for the year. While all the major market indices are down, there are individual stocks that are actually up. This article will discuss in detail some of the best stocks that are on the rise and are expected to continue this momentum. Some of the top stocks that are on the rise include Lockheed Martin Corporation (NYSE:LMT), Pioneer Natural Resources Company (NYSE:PXD), and Cigna Corporation (NYSE:CI).
Photo by Adam Nowakowski on Unsplash
Our Methodology
To determine the best stocks to buy now that are on the rise, we screened for quality companies that had solid business fundamentals, promising growth catalysts, and secular growth stories. We looked for companies that were up at least 30% for the year and were expected to continue this momentum as we move into 2023. Along with each stock, we have mentioned the hedge fund sentiment, their year-to-date return, and analyst ratings, among other salient features that make them optimal investment options. These stocks are ranked according to their popularity among elite hedge funds.
Stocks On The Rise: 12 Best To Buy Now
12. Itaú Unibanco Holding S.A. (NYSE:ITUB)
Year-to-Date Return as of November 4: 57.94%
Number of Hedge Fund Holders: 11
Itaú Unibanco Holding S.A. (NYSE:ITUB) is one of the largest banks in Brazil and Latin America. The company has a strong market position in its home country and continues to grow its market share. Itaú Unibanco Holding S.A. (NYSE:ITUB) is well-positioned to continue its growth in the coming years, as Brazil’s economy continues to expand. The stock is on the rise in 2022 and, as of November 4, has gained roughly 58% year to date.
Itaú Unibanco Holding S.A. (NYSE:ITUB) has a strong cash position and the company reinvests in itself. Itaú Unibanco Holding S.A. (NYSE:ITUB) has free cash flows of BRL 127.88 billion. On August 26, Itaú Unibanco Holding S.A. (NYSE:ITUB) announced a share repurchase program under which the company will buyback up to 75 million company through February 24, 2024.
On September 29, Goldman Sachs analyst Tito Labarta raised his price target on Itaú Unibanco Holding S.A. (NYSE:ITUB) to $7 from $5.40 and upgraded the stock to Buy from Neutral.
At the close of Q2 2022, 11 hedge funds were bullish on Itaú Unibanco Holding S.A. (NYSE:ITUB) and held stakes worth $397.5 million in the company. Of those, Orbis Investment Management was the top investor in the company and disclosed a position worth $127.7 million.
Other notable stocks that are on the rise in 2022 include Lockheed Martin Corporation (NYSE:LMT), Pioneer Natural Resources Company (NYSE:PXD), and Cigna Corporation (NYSE:CI).
11. Companhia Energetica Minas Gerais (NYSE:CIG)
Year-to-Date Return as of November 4: 30.73%
Number of Hedge Fund Holders: 13
Companhia Energetica Minas Gerais (NYSE:CIG) is a leading electric utility company in Brazil with a strong history of profitability and dividend growth. The company is among the largest generators and distributors of power in Brazil. As of November 4, Companhia Energetica Minas Gerais (NYSE:CIG) has gained 30.7% year to date and is expected to continue this momentum moving forward. The stock is among the best stocks to buy that are on the rise.
Companhia Energetica Minas Gerais (NYSE:CIG) is trading cheaply relative to earnings and is offering investors a strong dividend payout. As of November 4, the stock has a trailing twelve-month PE ratio of 9.36 and is offering a forward dividend yield of 9.43%. The company has a strong cash position and has free cash flows of BRL 3.54 billion.
At the end of Q2 2022, Companhia Energetica Minas Gerais (NYSE:CIG) was a part of 13 investors’ portfolios that held collective stakes of $64 million in the company. As of September 30, Polunin Capital is the top investor in Companhia Energetica Minas Gerais (NYSE:CIG) and has a position worth $27.25 million in the company.
10. Modine Manufacturing Company (NYSE:MOD)
Year-to-Date Return as of November 4: 101.15%
Number of Hedge Fund Holders: 15
Modine Manufacturing Company (NYSE:MOD) is a global leader in thermal management technologies and solutions. The company has a long history of success that dates back to the 1900s and has cemented its position in the industry. Modine Manufacturing Company (NYSE:MOD) is currently trading at bargain levels, making now an optimal time to buy, and is efficient at making profits for shareholders. The company has a trailing twelve-month PE ratio of 9.10, as of November 4, and has an ROE of 29.83%.
On November 2, Modine Manufacturing Company (NYSE:MOD) released market-beating earnings for the fiscal second quarter of fiscal 2023. The company generated a revenue of $578.80 million, up 20.86% year over year, and outperformed Wall Street estimates by $27.95 million. The company reported an EPS of $0.48 and beat expectations by $0.11. As of November 4, Modine Manufacturing Company (NYSE:MOD) has risen by 101.15% year to date and is ranked among the best stocks that are on the rise.
At the end of Q2 2022, Modine Manufacturing Company (NYSE:MOD) was spotted on 15 investors’ portfolios that held collective stakes of $86.15 million in the company. This is compared to 13 hedge funds a quarter ago with stakes worth $70.9 million. The hedge fund sentiment for the stock is positive.
As of September 30, Royce & Associates is the top investor in Modine Manufacturing Company (NYSE:MOD) and has a position worth $20.64 million in the company.
9. Unum Group (NYSE:UNM)
Year-to-Date Return as of November 4: 78.42%
Number of Hedge Fund Holders: 25
Unum Group (NYSE:UNM) is a leading provider of financial protection benefits in the United States, the United Kingdom, and Poland. The company offers disability, life, accident, and critical illness insurance products that provide financial protection in the event of an unexpected illness or injury. Unum Group (NYSE:UNM) has a strong history of financial stability and is committed to providing quality customer service. The stock has surged 78.42% in 2022, as of November 4, and is expected to continue this trajectory in the foreseeable future. Unum Group (NYSE:UNM) is ranked among the stocks on the rise that are worth buying right now.
Unum Group (NYSE:UNM) is trading at an attractive valuation and is paying a hefty dividend to investors. As of November 4, the stock has a trailing twelve-month PE ratio of 7.66 and is offering a forward dividend yield of 2.92%.
This October, Truist analyst Mark Hughes raised his price target on Unum Group (NYSE:UNM) to $48 from $44 and reiterated a Buy rating on the shares.
At the end of Q2 2022, 25 hedge funds were long Unum Group (NYSE:UNM) and held stakes worth $436 million in the company. This is compared to 30 positions in the previous quarter with stakes worth $323.5 million.
As of June 30, Viking Global is the dominating investor in Unum Group (NYSE:UNM) and has a position worth $146.6 million in the company.
8. Energy Transfer L.P. (NYSE:ET)
Year-to-Date Return as of November 4: 41.22%
Number of Hedge Fund Holders: 36
Energy Transfer L.P. (NYSE:ET) is a leading oil and gas transportation company that owns and operates several pipelines and related infrastructure in the United States. On October 25, the company raised its quarterly dividend by 15.2% to $0.265 per common share. The dividend is payable on November 21 to stockholders of record at the close of business on November 4.
Energy Transfer L.P. (NYSE:ET) is among the stocks that are on the rise and, as of November 4, the stock has surged 41% year to date. The company is also trading cheaply relative to earnings and is offering a strong dividend payout. As of November 4, Energy Transfer L.P. (NYSE:ET) is trading at a PE multiple of 9x and is offering a forward dividend yield of 8.62%.
On October 19, Morgan Stanley analyst Robert Kad raised his price target on Energy Transfer L.P. (NYSE:ET) to $17 from $15 and reiterated an Overweight rating on the shares.
At the end of Q2 2022, 36 hedge funds were long Energy Transfer L.P. (NYSE:ET) and held stakes worth $598.5 million in the company. Of those, Abrams Capital Management was the top investor in the company and disclosed a position worth $220.8 million.
7. Archer Daniels Midland Company (NYSE:ADM)
Year-to-Date Return as of November 4: 40.21%
Number of Hedge Fund Holders: 42
Archer Daniels Midland Company (NYSE:ADM) is a diversified food and agricultural company with a strong history of profitable operations. The company has a wide moat in the form of its strong relationships with farmers and its integrated supply chain. This gives it a significant competitive advantage over its rivals. The company is also well-positioned to benefit from the growing global demand for food and agricultural products.
On October 25, Archer Daniels Midland Company (NYSE:ADM) released earnings for the third quarter of fiscal 2022. The company reported a revenue of $24.68 billion, up 21.35% year over year, and ahead of estimates by $2.46 billion. The company reported an EPS of $1.86 and outperformed expectations by $0.45. Shortly after the company’s earnings release, Baird analyst Ben Kallo raised his price target on Archer Daniels Midland Company (NYSE:ADM) to $98 from $94 and reiterated an Outperform rating on the shares.
At the end of Q2 2022, 42 hedge funds were eager on Archer Daniels Midland Company (NYSE:ADM) and held stakes worth $658.96 million in the company. This is compared to 42 positions in the preceding quarter with stakes worth $625.68 million. As of September 30, Markel Gayner Asset Management is the top shareholder in Archer Daniels Midland Company (NYSE:ADM) and has a position worth $117.7 million.
Like Lockheed Martin Corporation (NYSE:LMT), Pioneer Natural Resources Company (NYSE:PXD), and Cigna Corporation (NYSE:CI), Archer Daniels Midland Company (NYSE:ADM) is on the rise in 2022 and has soared 40% year to date, as of November 4.
6. McKesson Corporation (NYSE:MCK)
Year-to-Date Return as of November 4: 59.88%
Number of Hedge Fund Holders: 47
McKesson Corporation (NYSE:MCK) is a leader in the healthcare services industry. McKesson Corporation (NYSE:MCK) has a diversified customer base and a strong financial position. The company has a long history of delivering shareholder value and is well-positioned to continue to do so. McKesson Corporation (NYSE:MCK) has free cash flows of $3.95 billion and is offering shareholders a forward dividend yield of 0.54%, as of November 4.
On November 1, McKesson Corporation (NYSE:MCK) announced earnings for the fiscal second quarter of 2023. The company reported earnings per share of $6.06 and generated a revenue of $70.16 billion, outperforming analyst estimates by $119.8 million. As of November 4, the stock has gone up by 59.8% in 2022 and is expected to continue this uptrend into 2023. McKesson Corporation (NYSE:MCK) is ranked among the stocks to buy that are on the rise.
This November, Barclays analyst Steve Valiquette raised his price target on McKesson Corporation (NYSE:MCK) to $415 from $375 and maintained an Equal Weight rating on the shares.
At the close of Q2 2022, McKesson Corporation (NYSE:MCK) was spotted on 47 investment portfolios. These funds held collective stakes of $4.43 billion in the company. As of June 30, Berkshire Hathaway is the top investor in McKesson Corporation (NYSE:MCK) and holds a position worth $1 billion in the company.
Here is what Baron Funds had to say about McKesson Corporation (NYSE:MCK) in its third-quarter 2022 investor letter:
“McKesson Corporation (NYSE:MCK) is a leading distributor of pharmaceuticals and medical supplies. The company also provides prescription technology solutions that connect pharmacies, providers, payers, and biopharmaceutical customers. The stock price rose on solid financial results as its business is less exposed to current macroeconomic headwinds. We continue to have conviction that McKesson can grow earnings per share by an average of 12% to 14% annually and think the stock is still reasonably valued.”
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Disclosure: None. Stocks On The Rise: 12 Best To Buy Now is originally published on Insider Monkey.