In this article, we discuss the 10 best and most active stocks to buy now. If you want to skip our detailed analysis of these stocks, go directly to the 5 Best Most Active Stocks To Buy Now.
Market experts expect the United States economy to slow down in the first quarter of 2022 as higher inflation numbers and an indecisive Fed are supported by a better-than-expected jobs recovery. The results of a survey of forecasters by the Philadelphia Federal Reserve, reported by news agency Reuters, show that forecasters expect the US economy to grow by 1.8% between January and March, down from November projections of 3.9%. Over the whole year though, growth projections are around 3.7%.
The forecasters also backed the US economy to add around 430,000 jobs per month in 2022, calming fears around the spread of new virus variants. Newly released figures by the US Department of Labor indicate that the US economy added around 467,000 in January, easily beating these predictions. However, inflation continues to wreak havoc with consumer sentiment, which has dropped to the lowest levels in almost a decade. Yearly inflation expectations are also up to around 5%.
In this uncertain marketplace, trading volumes have been at record highs as investors move away from growth-focused firms to value plays. Shrewd investors can pick up the shares of these growth stocks at bargain prices through this crisis period. Some of the top active stocks to buy now include Advanced Micro Devices, Inc. (NASDAQ:AMD), Uber Technologies, Inc. (NYSE:UBER), and Apple Inc. (NASDAQ:AAPL), among others discussed in detail below.
Our Methodology
These were picked keeping in mind the trading volume. The analyst ratings and business fundamentals of each stock are also discussed to provide readers with some additional context for their investment choices.
Data from around 900 elite hedge funds tracked by Insider Monkey was used to identify the number of hedge funds that hold stakes in each company.
Image by Sergei Tokmakov www.thecorporateattorneys.com from Pixabay
Best Most Active Stocks To Buy Now
10. Lumen Technologies, Inc. (NYSE:LUMN)
Number of Hedge Fund Holders: 25
Volume as of February 10: 34.7 million
Lumen Technologies, Inc. (NYSE:LUMN) is a technology and communications firm. The high volume around the stock can be explained by recent earnings results. In the fourth quarter of 2021, the company missed market estimates on earnings per share and revenue. The updated guidance numbers of the firm have also led to concerns about a slash in dividend payments. Citi analyst Michael Rollins had predicted a dividend cut by the firm back in August 2021.
Hedge funds have been offloading Lumen Technologies, Inc. (NYSE:LUMN) stock as well. At the end of the third quarter of 2021, 25 hedge funds in the database of Insider Monkey held stakes worth $941 million in Lumen Technologies, Inc. (NYSE:LUMN), compared to 33 in the previous quarter worth $1 billion.
Just like Advanced Micro Devices, Inc. (NASDAQ:AMD), Uber Technologies, Inc. (NYSE:UBER), and Apple Inc. (NASDAQ:AAPL), Lumen Technologies, Inc. (NYSE:LUMN) is one of the stocks generating a lot of buzz on Wall Street.
In its Q1 2021 investor letter, Longleaf Partners Fund, an asset management firm, highlighted a few stocks and Lumen Technologies, Inc. (NYSE:LUMN) was one of them. Here is what the fund said:
“Lumen (40%, 3.33%), the global fiber company, was the top contributor. While COVID fallout still weighed on fourth quarter results, the company benefitted from positive business mix improvements. Early in the quarter, Lumen appreciated 38% in a few short days amidst the “Game Stop / Reddit” short cover phenomenon. After this shortterm bounce, Lumen’s stock price appreciated more steadily over the last six weeks of the quarter with improved results. Many of last year’s worst-case fears have not materialized and the outlook is improving for the core business. We continue to believe that the company has multiple ways within its control to both grow and realize value per share, and we have a 13D filed to allow us to discuss these options with the company. Lumen’s board, which includes Southeastern-nominated Chairman Mike Glenn from FedEx and Director Hal Jones from Graham Holdings, is doing good work to realize Lumen’s hidden value and return the business to FCF/share growth. Despite its appreciation, the stock trades at less than half of our appraisal.”
9. Zillow Group, Inc. (NASDAQ:Z)
Number of Hedge Fund Holders: 67
Volume as of February 10: 35.7 million
Zillow Group, Inc. (NASDAQ:Z) operates as a digital real estate firm. The company recently posted market-beating earnings for the fourth quarter of 2021, reporting a 1,000% surge in home offers revenue. The stock has also benefited from a recent rise in household net worth as home prices climb. A $750 share repurchase program has boosted investor confidence in the company as well after a disappointing 2021 in which the shares tanked by over 53%.
The hedge fund sentiment around Zillow Group, Inc. (NASDAQ:Z) stock remains mixed. At the end of the third quarter of 2021, 67 hedge funds in the database of Insider Monkey held stakes worth $4.2 billion in Zillow Group, Inc. (NASDAQ:Z), down from 76 in the preceding quarter worth $5.2 billion.
In its Q1 2021 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Zillow Group, Inc. (NASDAQ:Z) was one of them. Here is what the fund said:
“Zillow Group, Inc. (NASDAQ:Z) operates leading U.S. real estate sites, a mortgage marketplace, and the Zillow Offers home-buying business. Shares fell during the quarter in concert with the broader rotation out of technology-based stocks despite the company’s continued inflection in mortgages revenue, strong profitability in its core business, and a positive real estate outlook as Zillow builds out its iBuying ecosystem. In our view, Zillow is a leader in the large online real estate advertising market with substantial upside from mortgages and Offers, and we remain investors.”
8. Cleveland-Cliffs Inc. (NYSE:CLF)
Number of Hedge Fund Holders: 35
Volume as of February 10: 36.4 million
Cleveland-Cliffs Inc. (NYSE:CLF) operates as a steel producer. Hedge funds have been selling the stock in the past few months. At the end of the third quarter of 2021, 35 hedge funds in the database of Insider Monkey held stakes worth $682 million in Cleveland-Cliffs Inc. (NYSE:CLF), compared to 44 in the preceding quarter worth $1.1 billion.
Amid weakening steel prices and an earnings miss in the fourth quarter of 2021, Cleveland-Cliffs Inc. (NYSE:CLF) stock has been on a downward spiral. CEO Lourenco Goncalves has said the weaker fourth quarter results were due to the fact that the company decided to use a lull in auto-production to speed up work on maintenance projects.
7. The Goodyear Tire & Rubber Company (NASDAQ:GT)
Number of Hedge Fund Holders: 37
Volume as of February 10: 40.1 million
The Goodyear Tire & Rubber Company (NASDAQ:GT) markets tires and related products. There is positive hedge fund sentiment around the company. At the end of the third quarter of 2021, 37 hedge funds in the database of Insider Monkey held stakes worth $449 million in The Goodyear Tire & Rubber Company (NASDAQ:GT), up from 33 the preceding quarter worth $497 million.
The Goodyear Tire & Rubber Company (NASDAQ:GT) is one of the first tire firms to develop an EV-tuned replacement tire in North America. It started offering this tire in late December 2021. Last year, the firm had purchased Cooper Tire in a deal worth around $2.8 billion. The purchase helped the firm increase product offerings and grow revenue.
Junto Investments, in its Q3 2020 investor letter, mentioned The Goodyear Tire & Rubber Company (NASDAQ:GT). Here is what the fund has to say in its letter:
“During the third quarter of 2019 White Brook entered Goodyear Tire, the year to date worst performer in the Fund. Covid, set the company back a year, but the thesis remains in tact.
Goodyear is one of the 3 largest tire companies in the world and operates a distributed manufacturing capability globally. 50% of their revenue comes from the America’s region, with the US and Brazil as the notable markets within that group, EMEA is 30% of the business and the rest is Asia Pacific which contains the notable markets of China and India. About 80% of their revenue are replacement tires with the balance sold to new car manufacturers (OEM).
Within the OEM market, there’s a distinct sales cycle, where tire manufacturers pitch and are awarded business for specific models from the OEMs. It can sometimes require custom tires to be launched to support the model. While less profitable, OEM business is important as it’s guaranteed revenue and because consumers “know” the product when it comes time to replace. In the past year, that business has taken two hits. First, Covid-19 seriously impaired volumes in the 4th quarter of 2019 through the second quarter of 2020. Additionally, as manufacturers struggled, Goodyear had to cut the prices charged to OEMs – of between $2-$4.
Goodyear uses a size nomenclature to denote premium and non-premium tires, where less than 17 inches, is a commodity tire and above, is premium. Most of their business is non-premium, commodity tires, where they earn on average $8 per tire in the replacement market, and $5 at the OEM. However, a rapidly increasing percentage of tires are now above 17 inches due in large part to the popularity of SUV and light truck sales and now make up almost 50% of the replacement market. Goodyear earns $15 on average in the OEM channel and $28 when replacing a 17-inch tire.
In 2019, Goodyear took some short-term pain, dropping some low profitability 16-inch OEM business, in order to be able to guarantee production for more profitable 17-inch business that will come online in 2020 and 2021 and buttress revenue growth. Those cuts led to a consolidation of the manufacturing footprint that should help margins as volumes return in 2020 and 2021. Additionally, during the 4th quarter of 2019 and into 2020, the Company began to rationalize it’s European distribution channel filtering out those retailers who didn’t prioritize Goodyear tires. This process should end during the 4th quarter of 2020, setting up very easy comparables and much better cash flow prospects for 2021.
Electrification of..” (Read the entire letter here)
6. Ford Motor Company (NYSE:F)
Number of Hedge Fund Holders: 51
Volume as of February 10: 44.1 million
Ford Motor Company (NYSE:F) is an automaker that operates from Michigan. On February 4, Wells Fargo analyst Colin Langan maintained an Overweight rating on Ford Motor Company (NYSE:F) stock with a price target of $24, noting that a separation of the electric vehicle business from the traditional auto business would be a “positive catalyst” for Ford.
Ford Motor Company (NYSE:F) is one of the most trusted carmakers on Wall Street. At the end of the third quarter of 2021, 51 hedge funds in the database of Insider Monkey held stakes worth $1.6 billion in Ford Motor Company (NYSE:F), compared to 55 in the preceding quarter worth $2.1 billion.
Alongside Advanced Micro Devices, Inc. (NASDAQ:AMD), Uber Technologies, Inc. (NYSE:UBER), and Apple Inc. (NASDAQ:AAPL), Ford Motor Company (NYSE:F) is one of the stocks on the radar of growth investors.
In its Q1 2020 investor letter, Greenlight Capital Fund, an asset management firm, highlighted a few stocks and Ford Motor Company (NYSE:F) was one of them. Here is what the fund said:
“General Motors (GM) was a disappointment. The damage from last year’s strike consumed most of the cash flow GM would have otherwise generated in 2019. We had expected a strong bounce back in earnings and cash flow in 2020, but the annual guidance, while meeting Wall Street expectations, was worse than we expected. Further, the cash burned during the strike needed to be re-earned in order to protect GM’s investment grade rating. Pre-crisis, there would have been, at best, a minimal share repurchase late in the year. At the analyst day, our hopes that 2020 would finally be the year were dashed. We sold our stock. Over our five-year holding period, we made a 9.6% IRR on GM. In the difficult environment, its most comparable peer, Ford, lost about half its value.”
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Disclosure. None. 10 Best Most Active Stocks To Buy Now is originally published on Insider Monkey.
