In this article, we will discuss 10 best multi-bagger stocks to buy now. To skip the detailed analysis of the current market and these stocks, go directly to 5 Best Multi-Bagger Stocks to Buy Now.
The recession followed by 40-year high inflation has been quite unkind to investors in the stock market. With major US indexes showing a downward trend in the past few months, analysts are unsure of their counsel. To make matters worse, the Ukraine-Russia war has wreaked havoc on the global economy. According to the Organisation for Economic Co-operation and Development, the global economy will pay a “hefty price” for it. In early June, the organization decreased its global growth outlook from 4.5% to 3%. The inflation projection for 2022 was at 9%, which has come true. Furthermore, the organization believes that the growth will further decrease to 2.8% in 2023.
However, despite global economic headwinds, some companies performed well enough to become multi-baggers. Due to inflation, some firms were able to put the burden of rising prices on consumers. The sanction on Russia caused the oil prices to soar as high as $130 WTI. On the other hand, the product shortages and halted flow of goods from Ukraine also affected the food, minerals, and metal prices.
Multi-Bagger Stocks
Multi-bagger stocks are the firms that have returned more than 100% and several folds over their cost. Most of the time, these stocks are undervalued but the fundamentals or the business model is quite strong, which makes them a right fit for investment. The essential factors to note in a multi-bagger stock are the debt levels, previous performance from the quarter, and the sources of revenue.
In our list of multi-bagger stocks, Target Hospitality Corp. (NASDAQ:TH), CONSOL Energy Inc. (NYSE:CEIX), and Lantheus Holdings, Inc. (NASDAQ:LNTH) are some of the most notable names.
Image by Steve Buissinne from Pixabay
Our Methodology
The stocks mentioned in these articles have returned at least 100% to their shareholders in the last 12 months as of August 2. Furthermore, bullish analyst ratings have also been assigned to these stocks. For the readers, we have analysed the financial reports, dividend history, and hedge fund sentiment around these stocks. The hedge fund sentiment has been taken from Insider Monkey’s database of 900+ elite hedge funds as of the first quarter of 2022.
Best Multi-Bagger Stocks to Buy Now
10. Marathon Oil Corporation (NYSE:MRO)
12-Month Returns as of August 2: 106.75%
Marathon Oil Corporation (NYSE:MRO) is a Houston-based hydrocarbon exploration company. In the last 12 months alone, the company stock has returned 102.75% to its shareholders. Marathon Oil Corporation (NYSE:MRO) reported that free cash flow break-even is less than $35 per barrel for WTI. The company can generate $5 billion of free cash flow by 2025 at $50/bbl WTI.
As of August 2, the company has a dividend yield of 1.4% with an annual dividend of 0.$32. For Q1 2022, the company also announced a share repurchase program of $1.5 billion. Furthermore, for the last five consecutive quarters, Marathon Oil Corporation (NYSE:MRO) has increased its dividend by 1 cent. The last dividend payment of $0.08 was paid out on July 10.
On July 26, Raymond James analyst maintained a Strong Buy rating on Marathon Oil Corporation (NYSE:MRO)’s shares. The analyst lowered the firm’s price target to $35 from $40, representing a +46.14% upside.
Target Hospitality Corp. (NASDAQ:TH), CONSOL Energy Inc. (NYSE:CEIX), and Lantheus Holdings, Inc. (NASDAQ:LNTH) are some of the notable names among multi-bagger stocks, along with Marathon Oil Corporation (NYSE:MRO).
Here is what Carillon Tower Advisers had to say about Marathon Oil Corporation (NYSE:MRO) in its Q1 2022 investor letter:
“Stock selection contributed the most while sector allocation was also positive. An underweight to communication services and an overweight to energy helped performance, while an underweight to consumer staples and an overweight to materials detracted. Stock selection was strong within healthcare and materials but was weak within information technology and industrials. Marathon Oil (NYSE:MRO) increased its quarterly dividend and executed an impressive share buyback that blew by the target it originally announced.”
9. Devon Energy Corporation (NYSE:DVN)
12-Month Returns as of August 2: 131.32%
Devon Energy Corporation (NYSE:DVN) is a hydro-carbon exploration company with most of its concentration in petroleum, followed by natural gas liquids and then natural gas. On August 2, Devon Energy Corporation (NYSE:DVN) had a 9% dividend yield and announced two dividend raises in consecutive quarters. The last quarterly dividend of $1.27 was paid out on June 30 to the shareholders on record as of June 11. Furthermore, the company had a buyback authorization of $2 billion in Q1 2022 and aims to increase the repurchase volume after Q2 2022 results.
Piper Sandler analyst Mark Lear on July 22 maintained an Outperform rating on Devon Energy Corporation (NYSE:DVN)’s shares with a price target of $94, down from $97.
Hedge funds showed a positive trend towards Devon Energy Corporation (NYSE:DVN) in Q1 2022. 66 hedge funds were loading up on the stock in Q1, compared to 51 funds in the previous quarter.
8. EQT Corporation (NYSE:EQT)
12-Month Returns as of August 2: 134.10%
EQT Corporation (NYSE:EQT) is an energy company that produces natural gas, natural gas liquids, and natural gasoline. As of the first quarter of 2022, 52 hedge funds had a stake in the company with a combined stake value of $2.1 billion. Priorly, 46 hedge funds were bullish on EQT Corporation (NYSE:EQT), with holdings worth $1.2 billion.
At the end of Q2 2022, EQT Corporation (NYSE:EQT) reported an EPS of $0.83, beating the consensus by $0.03. The company generated $3.37 billion in revenue, representing a growth of 212% on a YoY basis. Moreover, the net cash from operating activities was $230 million and a free cash flow of $543 million was recorded.
On July 20, EQT Corporation (NYSE:EQT) increased its dividend by 20% to $0.15, payable by September 1, to the shareholders on record as of August 9. Scotiabank analyst Cameron Bean on June 9 initiated coverage of EQT Corporation (NYSE:EQT) with an Outperform rating and price target of $54.
Here is what ClearBridge Investments had to say about EQT Corporation (NYSE:EQT) in its Q1 2022 investor letter:
“In the early days of the invasion, we made two measured changes to the portfolio based on longer-term fallout we anticipate from Russia’s invasion of Ukraine. First, we initiated small positions in U.S. natural gas producer EQT (NYSE:EQT).
Given its superior environmental profile compared to other fossil fuels, we have long favored natural gas in our energy holdings. Combustion of natural gas releases 50% less CO2 than coal, 25% less CO2 than gasoline and dramatically less particulate and pollution, per the U.S. Energy Information Administration. With the advances in shale production this century, the U.S. has become a natural gas powerhouse with some of the lowest-cost and largest reserves in the world. But because natural gas is difficult to ship across the ocean (it must be liquefied, which requires expensive infrastructure on both ends of the voyage), America’s gas bounty has ironically proved a burden for U.S. producers.
The surplus of natural gas in North America has resulted in low prices and weak earnings for gas-focused producers. Exports, while growing, are restrained by the high cost of building export infrastructure. Europe, in a Faustian bargain, has relied on abundant, inexpensive Russian gas transported by pipeline.
Despite the abundance of low-cost resources and a superior environmental profile, the investment case for U.S. natural gas producers was previously unfavorable due to oversupply in the domestic market. In the days preceding the invasion, we were quick to realize the war would change global energy flows. Europe is shifting away from Russia and toward new sources of imported liquified natural gas. We purchased our stakes in EQT to capitalize on these trends. The recently announced energy pact between the U.S. and Europe represents an early positive datapoint in support of this investment thesis. We funded these purchases, in part, with a trim of Pioneer. While we continue to like Pioneer, the risk/reward outlook for the stock is more balanced following recent gains in the shares.”
7. NexTier Oilfield Solutions Inc. (NYSE:NEX)
12-Month Returns as of August 2: 142.60%
NexTier Oilfield Solutions Inc. (NYSE:NEX) is an oil & gas equipment and services company. The company has exceeded the small-cap mark with a market capitalization of $2.28 billion. For the second quarter of 2022, the company reported a non-GAAP EPS of $0.39, compared to the $0.34 consensus. The company beat revenue estimates by $19.64 million by recording a revenue of $842.91 million. The revenue grew by 188% compared to Q2 2021. The company expects to generate $225 million in free cash flow at the end of FY2022. Moreover, NexTier Oilfield Solutions Inc. (NYSE:NEX) is looking towards further revenue growth of 8%-10% in the third quarter.
At the end of Q1 2022, 28 hedge funds had a stake in NexTier Oilfield Solutions Inc. (NYSE:NEX), compared to 16 in the previous quarter. Cerberus Capital Management was the most prominent shareholder in the company with well over 33 million shares worth $292.79 million.
Here is what Aristotle Capital Management had to say about NexTier Oilfield Solutions Inc. (NYSE:NEX) in its Q1 2022 investor letter:
“NexTier Oilfield Solutions (NYSE:NEX), a provider of hydraulic fracturing and other completion-oriented oilfield services to exploration and production companies in the U.S., benefited from rising U.S. completion activity and rising prices due to tight supply/demand fundamentals for frac equipment. We maintain a position, as we believe the company’s dedicated service agreements, solid execution and merger synergies from recent mergers and acquisitions activity can unlock additional value for shareholders in periods to come.”
6. Occidental Petroleum Corporation (NYSE:OXY)
12-Month Returns as of August 2: 146.16%
Occidental Petroleum Corporation (NYSE:OXY) is an American hydrocarbon exploration company. The company also has a chemicals segment that manufactures chlorine, caustic soda, and calcium chloride, among others. In the last twelve months, the stock has returned 146.16%.
Around mid-June, Berkshire Hathaway Inc. (NYSE:BRK-B) purchased 4.3 million shares of Occidental Petroleum Corporation (NYSE:OXY), bringing the firm’s share in the company around 20%. The firm now has a $10.1 billion position in the company, along with around $10 billion of preferred stock and warrants.
On July 28, Barclays analyst Jeanine Wai reaffirmed an Overweight rating on Occidental Petroleum Corporation (NYSE:OXY)’s shares. The analyst lowered the firm’s price target to $79 from $84 ahead of Q2 results.
Just like Target Hospitality Corp. (NASDAQ:TH), CONSOL Energy Inc. (NYSE:CEIX), and Lantheus Holdings, Inc. (NASDAQ:LNTH), Occidental Petroleum Corporation (NYSE:OXY) is also one of the most significant multi-bagger stocks to buy now.
Here is what Smead Capital Management had to say about Occidental Petroleum Corporation (NYSE:OXY) in its Q3 2021 investor letter:
“Oil stocks dominated our winners for the quarter. We showed that we have unlimited ability to tempt fate by buying into Occidental Petroleum (OXY) this year after it was our biggest loser of 2020. It gained 16.64% during the third quarter.”
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Disclosure: None. 10 Best Multi-Bagger Stocks to Buy Now is originally published on Insider Monkey.
