In this article, we discuss the 10 best stocks to buy right now. If you want to skip our detailed analysis of these stocks, go directly to What are the 5 Best Stocks to Buy Right Now?
Merely a day after the United States Department of Commerce released growth numbers that indicated that the US economy had surpassed pre-pandemic levels and was growing at a record pace, the Centre for Disease Control and Prevention, according to internal documents seen by news publication The Washington Post, claimed that the Delta variant of the coronavirus was as infectious as chickenpox. The report dampened hopes of investors who had been optimistic about the continuity of a post-pandemic economic boom.
However, Federal Reserve Chair Jerome Powell sought to ease fears about an impending bear market last week and told reporters that the US economic recovery was on track despite the rise in the number of coronavirus cases and that governments around the world had learned how to handle the pandemic with progressively less economic disruption. He also said that strong job growth was expected as the vaccinations continued to reduce the effect of the public health crisis. Powell also played down inflation fears as temporary while talking to news media.
Statements from top officials like Powell should ease investor concerns around the economy and increase confidence in the stock market. For those looking to cash in on the positive sentiment created by the release of GDP growth numbers and subsequent public appearances by top economists, the top hedge fund holdings could offer handsome returns. At the end of the first quarter, these included Facebook, Inc. (NASDAQ: FB), Microsoft Corporation (NASDAQ: MSFT), and Amazon.com, Inc. (NASDAQ: AMZN), among others discussed in detail below.
There is little doubt that the pandemic has transformed the conventional economy. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and May 29th 2021 our monthly newsletter’s stock picks returned 206.8%, vs. 91.0% for the SPY. Our stock picks outperformed the market by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
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With this context in mind, here is our list of the 10 best stocks to buy right now. These stocks were ranked keeping in mind hedge fund sentiment, with only those firms selected that have the highest number of hedge fund holders from amongst the database of funds tracked by Insider Monkey. Special importance was given to analyst ratings for each firm. In addition, the basic business fundamentals of each firm were also considered.
What are the Best Stocks to Buy Right Now?
10. Uber Technologies, Inc. (NYSE: UBER)
Number of Hedge Fund Holders: 130
Uber Technologies, Inc. (NYSE: UBER) is placed tenth on our list of 10 best stocks to buy right now. The stock has returned 43% to investors over the past twelve months. The firm is based in California and operates as a technology company with stakes in several businesses, including ride-hailing services. On July 28, the firm announced that it had signed an agreement with FTD, a floral service based in Illinois, for flower deliveries across the US. The services will be available through the Uber and Uber Eats applications, the firm revealed.
On July 1, investment advisory Cowen maintained an Outperform rating on Uber Technologies, Inc. (NYSE: UBER) stock and raised the price target to $80 from $76, backing the firm to post record second quarter numbers from increased mobility and delivery.
Out of the hedge funds being tracked by Insider Monkey, California-based investment firm Altimeter Capital Management is a leading shareholder in Uber Technologies, Inc. (NYSE: UBER) with 28 million shares worth more than $1.5 billion.
Just like Facebook, Inc. (NASDAQ: FB), Microsoft Corporation (NASDAQ: MSFT), and Amazon.com, Inc. (NASDAQ: AMZN), Uber Technologies, Inc. (NYSE: UBER) is one of the best stocks to buy right now.
RiverPark Advisors, LLC, in its Q4 2020 investor letter, mentioned Uber Technologies, Inc. (NYSE: UBER). Here is what the fund has to say in its letter:
“UBER was also a strong contributor, as shares rallied following the approval of California’s Proposition 22 by voters, allowing the company’s California-based drivers to remain independent contractors (rather than become more expensive employees). We believe this news is not just about the 10%-15% of Uber’s revenue tied to California, but the influence this will have on other states reassessing driver pay. UBER also reported strong third quarter results with Delivery Gross Bookings growing 135% year-over-year which nearly fully offset a reduction in Mobility Gross Bookings, which were down 50% year over year. Total Gross Bookings for the quarter were down only 10% year over year as compared with down 35% last quarter.
Despite the COVID disruption, UBER remains the undisputed global leader in ride sharing (44% of the Company’s third quarter revenue), with greater than 50% share in every major region in which it operates. The company is also a leader in food delivery (46% of revenue), where it is number one or two in the more than 25 countries in which it operates. We view UBER as more than just ride sharing and food delivery, but also as a global mobility platform with the ability to sell to its more than 100 million users (by comparison, Amazon Prime has 130+ million members) and penetrate new markets of on-demand services, such as grocery delivery, truck brokerage and worker staffing for shift work. At its current $96 billion market capitalization, UBER trades at only 6x next year’s revenue from its two core businesses. Additionally, the company has substantial, seemingly unrecognized, value in its several nascent development businesses and another $12 billion in equity stakes in synergistic businesses around the world.”
9. The Walt Disney Company (NYSE: DIS)
Number of Hedge Fund Holders: 134
The Walt Disney Company (NYSE: DIS) is a firm that has stakes in the mass media and entertainment businesses. It is based in California and is ranked ninth on our list of 10 best stocks to buy right now. The company’s shares have returned 50% to investors over the past year. On July 13, Morgan Stanley outlined a bullish thesis for the company based on the theme parks and streaming potential of the firm. Disney owns some of the most famous theme parks in the world and also runs the internet-based streaming platform Disney+.
On July 14, investment advisory Tigress Financial maintained a Buy rating on The Walt Disney Company (NYSE: DIS) stock with a 12-month price target of $227, noting that the firm had performed better than expected during the pandemic and was set for post-pandemic growth.
At the end of the first quarter of 2021, 134 hedge funds in the database of Insider Monkey held stakes worth $12.6 billion in The Walt Disney Company (NYSE: DIS), down from 144 in the preceding quarter worth $16.4 billion.
Alongside Facebook, Inc. (NASDAQ: FB), Microsoft Corporation (NASDAQ: MSFT), and Amazon.com, Inc. (NASDAQ: AMZN), The Walt Disney Company (NYSE: DIS) is one of the best stocks to buy right now.
In its Q4 2020 investor letter, Harding Loevner, an asset management firm, highlighted a few stocks and The Walt Disney Company (NYSE: DIS) was one of them. Here is what the fund said:
“One of the original constituents of the Nifty Fifty holds a place in our portfolio today. When we bought Disney three years ago, we wrote that “we view Disney theme parks in the US, Europe, and China as resistant to online substitution.” We did not reckon on a pandemic, which closed all of them, and sent all of us to our couches. Disney, however, was ready for us, brilliantly illustrating the importance of management foresight and change management. Or, as Louis Pasteur said, “chance favors the prepared mind.
A century after its founding in 1923, Disney is in the middle of a bold shift from its legacy media networks & entertainment model—with cable TV, theme parks, and theater films dominating its earnings—to a direct-to-consumer streaming media model. The keys to Disney’s transition: matchless storytelling, coupled with financial strength. The company reliably creates content that people all over the world are eager to consume. It also hastened spending on original content to attract subscribers to its new streaming platform. These factors have allowed Disney to weather the pandemic having expanded its direct engagement with customers. Such connections yield a rich harvest of insights used to customize offerings on a mass scale, reinforcing that engagement in a virtuous circle and thereby raising the lifetime value of each customer. Subscribers to Disney+ reached 86.8 million one year after launch, compared to the 60 – 90 million management projected to reach in 2024. To be sure, Netflix, Apple, and Amazon remain formidable competitors in new-era streaming entertainment (mind what we said about everyone standing up at once), but there’s fight left in this old dog.”
8. Alibaba Group Holding Limited (NYSE: BABA)
Number of Hedge Fund Holders: 135
Alibaba Group Holding Limited (NYSE: BABA) is a technology company based in China that owns and operates one of the largest ecommerce platforms in the world. It is placed eighth on our list of 10 best stocks to buy right now. The stock has been hit in recent weeks amid a larger crackdown in China against dual listed companies. Some US firms that were planning stock market debuts in the US have also cancelled their plans after ride hailing giant Didi tanked after a record IPO in the US at the end of June.
On July 13, investment advisory Arete reiterated a Neutral rating on Alibaba Group Holding Limited (NYSE: BABA) stock but reduced the price target to $192 from $250, noting that there was no end in sight to a Chinese government crackdown against dual listed firms.
Still, BABA is one of the best long-term plays to profit from the huge ecommerce and Cloud computing potential of the company both in China and in the US. The latest crackdown and restrictions from the Chinese government is expected to eventually end.
Out of the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Alibaba Group Holding Limited (NYSE: BABA) with 13.9 million shares worth more than $3.1 billion.
In addition to Facebook, Inc. (NASDAQ: FB), Microsoft Corporation (NASDAQ: MSFT), and Amazon.com, Inc. (NASDAQ: AMZN), Alibaba Group Holding Limited (NYSE: BABA) is one of the best stocks to buy right now.
In its Q1 2021 investor letter, Polen Capital Management, an asset management firm, highlighted a few stocks and Alibaba Group Holding Limited (NYSE: BABA) was one of them. Here is what the fund said:
“Alibaba also detracted from performance as the company continues to remain under regulatory scrutiny from both the Chinese State Administration for Market Regulation on antitrust concerns and the U.S. Securities and Exchange Commission on ADR listing requirements. Despite the regulatory overhang, we believe that Alibaba’s competitive positioning and growth outlook remains intact, even if the company must pay fines or modify some business practices. We viewed the current valuation at <20x next twelve month’s earnings as a compelling opportunity to add to our position. Alibaba is the second largest position in the Portfolio.”
7. PayPal Holdings, Inc. (NASDAQ: PYPL)
Number of Hedge Fund Holders: 143
PayPal Holdings, Inc. (NASDAQ: PYPL) is ranked seventh on our list of 10 best stocks to buy right now. The company’s shares have offered investors returns exceeding 40% over the course of the past year. The firm is based in California and operates as a technology platform for payment services. A few months ago, the firm allowed users on its platform to checkout with cryptocurrency. On July 15, the firm said in a statement that it had raised the crypto purchase limit for eligible customers in the US to $100,000 per week with no annual purchase limit.
On July 29, investment advisory KeyBanc maintained an Overweight rating on PayPal Holdings, Inc. (NASDAQ: PYPL) stock with a price target of $335, underlining that any drop in the share price of the firm was a buying opportunity for investors.
At the end of the first quarter of 2021, 143 hedge funds in the database of Insider Monkey held stakes worth $14.7 billion in PayPal Holdings, Inc. (NASDAQ: PYPL), down from 147 in the preceding quarter worth $15.9 billion.
Facebook, Inc. (NASDAQ: FB), Microsoft Corporation (NASDAQ: MSFT), and Amazon.com, Inc. (NASDAQ: AMZN) are some of the best stocks to buy right now, just like PayPal Holdings, Inc. (NASDAQ: PYPL).
In its Q4 2020 investor letter, Polen Capital Management, an asset management firm, highlighted a few stocks and PayPal Holdings, Inc. (NASDAQ: PYPL) was one of them. Here is what the fund said:
“For the full year 2020, one of the top performers was PayPal, which we purchased in 2019, the company continues to take market share in digital payments and has seen an acceleration in user adoption and engagement, especially within their “silver tech” or older user demographic. We expect many more years of ongoing double-digit growth from their various business segments and new initiatives.”
6. Mastercard Incorporated (NYSE: MA)
Number of Hedge Fund Holders: 151
Mastercard Incorporated (NYSE: MA) stock has offered investors returns exceeding 25% over the course of the past twelve months. It is placed sixth on our list of 10 best stocks to buy right now. The firm markets payment-related services. It is headquartered in New York. On July 29, the firm posted earnings results for the second quarter, reporting earnings per share of $1.95, beating market estimates by $0.20. The revenue over the period was $4.5 billion, up 36% year-on-year and beating estimates by $130 million.
On July 30, investment advisory Wells Fargo reiterated an Overweight rating on Mastercard Incorporated (NYSE: MA) stock and raised the price target to $440 from $430, noting that travel-related card spending looked set to benefit the firm in the coming months.
Out of the hedge funds being tracked by Insider Monkey, Virginia-based investment firm Akre Capital Management is a leading shareholder in Mastercard Incorporated (NYSE: MA) with 5.8 million shares worth more than $2 billion.
Facebook, Inc. (NASDAQ: FB), Microsoft Corporation (NASDAQ: MSFT), and Amazon.com, Inc. (NASDAQ: AMZN) are some of the best stocks to buy right now, alongside Mastercard Incorporated (NYSE: MA).
In its Q4 2020 investor letter, Bretton Fund, an asset management firm, highlighted a few stocks and Mastercard Incorporated (NYSE: MA) was one of them. Here is what the fund said:
“While consumers resumed much of their spending by summer, what and how they used their Visas and Mastercards changed. For obvious reasons, people shifted to contactless payments—one of the Covid-era changes we think is permanent—and replaced travel purchases with online shopping and food delivery. Consumers spent more on their debit cards and less on their credit cards; Visa and Mastercard make more per transaction on the latter. They also make more on cross-border transactions that come mostly from international travel, which ground to a halt early in the pandemic. Visa’s and Mastercard’s earnings per share fell by 7% and 16%, respectively, compared to their usual mid-teens growth. We’re not too worried, and we think they’ll catch up nicely in the post-vaccine world. Visa’s stock returned 17.1% and Mastercard’s 20.2%.”
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Disclose. None. What are the Best Stocks to Buy Right Now? is originally published on Insider Monkey.
