In this article, we will take a detailed look at the Top 10 Stocks to Watch Ahead of May.
Aswath Damodaran from NYU Stern School of Business said in a latest interview with CNBC that while investors are “celebrating” positive results of a few major tech companies, the problems haunting these firms will take a while to show up in their results. However, Damodaran, also known as ‘Dean of Valuation,’ said it won’t be prudent to “give up” entirely on Mag. 7 companies.
“They can consolidate their advantage. In a weird way, again, all these troubles might play into the hands of the Mag 7, because the more troubles there are, the more flexibility gets rewarded. And as you pointed out, these companies are incredibly flexible, incredibly adaptable. We saw that with COVID, we saw that in 2022 with inflation, and I’m convinced you’re going to see it again. Doesn’t mean you load up on the Mag 7, but if you’ve never owned them, you had a chance to buy into at least one or two of them in the last month. You might have missed that chance, but the chance was there. So I wouldn’t give up that easily on the Mag 7.”
Damodaran said investors experienced a lot of “trauma” in April. He argued against reactionary investing and said that when investors respond to daily events and news cycles, they damage their portfolios.
“Maybe the best thing investors could have done is left at the start of the month, gone somewhere without internet service, and come back at the end of the month. Because everything we do is reactive, and often when you’re reacting to day-to-day events, you’re going to end up doing more damage to your portfolio than helping.”
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
For this article, we picked 10 stocks Wall Street analysts are talking about as the chaotic month of April nears its close. With each stock, we have mentioned its latest hedge fund sentiment. 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
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10. Barrick Gold Corp (NYSE:GOLD)
Number of Hedge Funds Investors: 42
Jim Cramer in a latest program on CNBC said he likes Barrick Gold Corp (NYSE:GOLD):
“A gold company is—I mean, I hate to just say this because it really doesn’t take a weatherman to know which way the wind blows, does it—but gold, I think, is going higher still. Barrick Gold has a lot more room to run. I think it’s doing better. I wish they weren’t so far-flung. But I think GOLD is a good place to be.
Ariel Focus Fund stated the following regarding Barrick Gold Corporation (NYSE:GOLD in its Q4 2024 investor letter:
“Lastly, gold mining company, Barrick Gold Corporation (NYSE:GOLD) fell following an investor day where management reduced five-year guidance for gold production and raised cost estimates. Meanwhile, a dispute with the African government of Mali and associated negative headlines created an overhang on shares. Despite ongoing uncertainty, management remains laser focused on upgrading its mining operations and broadly improving efficiencies amid today’s rising prices for precious metals. The company also continues to prioritize capital returns to shareholders via dividends and share repurchases. At current valuation levels, we believe the risk/reward is priced in.”
9. United Parcel Service Inc (NYSE:UPS)
Number of Hedge Funds Investors: 43
A United Parcel Service Inc (NYSE:UPS) investor recently asked Jim Cramer on a call during a program on CNBC about his thoughts on the logistics company. Cramer told the caller to be “careful.”
“I do think that you’re going to run into a little trouble because world trade is not what we think it is. And look, I really like FedEx, and I’m not just sitting here pounding the table for FedEx either. So we got to be careful, but I appreciate your call. We got to be careful.”
River Road Large Cap Value Select Fund stated the following regarding United Parcel Service, Inc. (NYSE:UPS) in its Q4 2024 investor letter:
“As of December 31, the portfolio held 29 positions, up four positions from Q3. During Q4, the largest sector increase was 736 bps within industrials, while the largest decrease was -276 bps within consumer discretionary. We established five new positions and eliminated one position
We also initiated a position in United Parcel Service, Inc. (NYSE:UPS) (Cl B) (UPS, 3.0 conviction), the world’s largest package delivery company, which handles over six billion packages annually and can reach 90% of the world’s gross domestic product (GDP) within a day. After years of elevated network investments to expand capacity, UPS has refocused its strategy on growing return on invested capital (ROIC). We believe the stock will rerate higher as margins, which we believe have bottomed, are expected to expand with the price per package growing faster than the cost per package. In the interim, investors collect a 5% dividend, which has grown in 21 out of 24 years since UPS went public. The dividend is supported by healthy free cash flow and an investment grade balance sheet with ~1x net leverage.”
8. Simon Property Group Inc (NYSE:SPG)
Number of Hedge Funds Investors: 48
Jim Cramer in a latest program on CNBC said Simon Property Group Inc (NYSE:SPG) has some tariff exposure but still recommended the stock:
“They have some exposure because they have some retail, but you know what, I’ve got to tell you—they are a terrific company. Got a 5.7% yield. I think Simon Property should be bought, and bought right here.”
Here is what Baron FinTech Fund has to say about S&P Global Inc. (NYSE:SPGI) in its Q3 2023 investor letter:
“Shares of rating agency and data provider S&P Global Inc. gave back some gains from earlier this year due to investor concerns that rising interest rates will weigh on future debt issuance and asset-based fees. Management also removed its 2026 revenue target for the ESG segment due to a more uncertain regulatory landscape and political climate. On a positive note, S&P Global reported strong second quarter financial results, with 7% adjusted revenue growth and 11% EPS growth as ratings issuance returned to growth for the first time in six quarters. Management maintained fullyear guidance as a more favorable outlook for the Ratings and Indices segments offset slower growth in the Market Intelligence segment. We continue to own the stock due to the company’s long runway for growth and significant competitive advantages.”
7. Target Corp (NYSE:TGT)
Number of Hedge Funds Investors: 49
Jim Cramer was recently asked about Target Corp (NYSE:TGT). The CNBC host recommended caution amid the impact of tariffs:
“It’s down 30%. It sells at 10 times earnings, but the tariffs are going to hurt it. And I think their pricing is not reasonable enough, and that makes me reluctant to pound the table. I’ve got a lot of stocks where there’s questionable stuff, and I can’t pound the table on them. If anything’s questionable, everything’s got to be totally buttoned down.”
Carillon Eagle Growth & Income Fund stated the following regarding Target Corporation (NYSE:TGT) in its Q4 2024 investor letter:
“Target Corporation (NYSE:TGT) missed earnings dramatically. The company’s sales were positive, but margins were disappointing due to higher expenses. While traffic was up, prices were down; consumers continued to seek value and shop during promotional periods. A one-time decision to re-route inventory ahead of the East Coast port strike also explains a large part of the company’s performance.”
6. McDonald’s Corp (NYSE:MCD)
Number of Hedge Funds Investors: 60
Jim Cramer in a latest program on CNBC mentioned a positive analyst report on McDonald’s Corp (NYSE:MCD) and made some bullish comments about the stock:
“Very rarely do you get this, but BTIG has this note that I just absolutely loved. It said, “Our recent McDonald’s franchise checks conveyed a sharp inflection in April sales trends, more optimistic tone from operators, Minecraft promo helping to regain some big McDonald’s momentum.” This is it, David. This is what you’re looking for. You’re looking for a story—ironclad. No tariff. Numbers look up. Stock chart is good. There you go.”
Carillon Eagle Growth & Income Fund stated the following regarding McDonald’s Corporation (NYSE:MCD) in its Q3 2024 investor letter:
“McDonald’s Corporation (NYSE:MCD) performed well as it met the expectations of investors looking for improvements in relative market share trends. The company’s introductions of menu items at premium- and medium-price tiers are picking up pace, allowing it to capture value more effectively.”
5. Walmart Inc (NYSE:WMT
Number of Hedge Funds Investors: 88
CFRA’s Arun Sundaram said in a recent program on Schwab Network that Walmart Inc (NYSE:WMT) is among the big-box retailers that can absorb the impact of tariffs:
“We do think that Walmart and Costco have more levers to offset tariff risks. For Walmart, you know, first and foremost, Walmart is predominantly a food retailer in the US. 60% of Walmart’s US sales is grocery. It also makes, grows, or assembles about two-thirds of its goods in the US, so it only has about one-third of its mix is imported. But of that one-third of imports, China and Mexico are the two biggest import partners. So, there is some risk related to tariffs, but I think one big offset is the fact that Walmart is rapidly growing some of these newer alternative revenue streams. Think like digital advertising, which is a much higher margin business than selling grocery. And so, if they continue to grow this digital advertising business at a much faster rate than grocery, that’s good for overall margins. And so, it can probably absorb some tariff headwinds in its grocery business or its discretionary merchandise business if it continues to grow like, for example, its digital advertising.”
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