In this article, we discuss the 10 best multibagger stocks to buy now. If you want to skip our detailed analysis of these stocks, go directly to the 5 Best Multibagger Stocks To Buy Now.
Everyone is looking to invest in multibagger stocks amid rising inflation and economic uncertainty. Market research suggests that over 15 million Americans used trading apps actively during the COVID-19 pandemic, most of them being young, amateur traders. The hyperactivity of retail investors has also been observed in Europe, India, and the Philippines, with buyers increasing their trading volume by two times the normal activity.
In 2020, US retail investors surpassed renowned corporations as the majority stakeholders in companies. The market speculated that the retail investors’ craze would subside when meme stocks like Robinhood Markets, Inc. (NASDAQ:HOOD) and GameStop Corp. (NYSE:GME) would stop getting hyped up by the media and eventually die down, but the trading activity of new investors has only skyrocketed.
Some of the most notable multibagger stocks based on the stock price gains in the last twelve months include Devon Energy Corporation (NYSE:DVN), NVIDIA Corporation (NASDAQ:NVDA), and Ford Motor Company (NYSE:F).
Our Methodology
We selected stocks that returned more than 100% in 2021, making sure to choose companies that reported solid Q3 earnings, had positive analyst ratings, and strong company fundamentals.
We also mentioned the hedge fund sentiment around each stock, which was gauged out of the 867 hedge funds that were monitored by Insider Monkey in the third quarter.
Best Multibagger Stocks To Buy Now
10. Devon Energy Corporation (NYSE:DVN)
12-Month Returns as of January 3: 180.72%
Number of Hedge Fund Holders: 48
Devon Energy Corporation (NYSE:DVN) is an American energy company specializing in hydrocarbon exploration. Devon Energy Corporation (NYSE:DVN) deals in petroleum, natural gas, and natural gas liquids.
On December 8, Devon Energy Corporation (NYSE:DVN) declared a quarterly dividend of $0.74 per share, payable on December 30 to shareholders of record on December 10. The $0.74 per share dividend reflects a 71.4% increase from the prior quarter dividend of $0.49 per share.
The Q3 results, published on November 2 by Devon Energy Corporation (NYSE:DVN), reported an EPS of $1.08, exceeding estimates by $0.15. Revenue for the quarter came in at $3.47 billion, up 224.84% from the prior year quarter, beating estimates by $546.05 million.
Mizuho analyst Silvio Micheloto on November 30 raised the price target on Devon Energy Corporation (NYSE:DVN) to $61 from $59 and kept a Buy rating on the shares. He expects the U.S. unconventional oil growth to “continually lag the call on supply necessary to balance global markets”.
In Q3 2021, 48 hedge funds tracked by Insider Monkey were bullish on Devon Energy Corporation (NYSE:DVN), down from 50 funds in the preceding quarter. Rajiv Jain’s GQG Partners, the leading Devon Energy Corporation (NYSE:DVN) stakeholder, increased its stake in the company by 87103% in the third quarter. GQG Partners holds 13.9 million shares of Devon Energy Corporation (NYSE:DVN), worth approximately $494 million.
Here is what GoodHaven Capital Management has to say about Devon Energy Corporation (NYSE:DVN) in their Q4 2020 investor letter:
“After a rough start to the year our two biggest energy holdings – WPX Energy rebounded materially in the last six months though energy was still our biggest detractor for the year. I’ve previously written about deciding earlier this year to direct new capital towards better businesses versus adding more to the energy sector, but given the material optionality at WPX, we opted to maintain a material exposure. Recently WPX announced an all stock merger with a larger competitor – Devon Energy – which will leave the new company with plenty of cash flow at lower oil prices, less leverage, and material upside to higher commodity prices.”
9. LendingClub Corporation (NYSE:LC)
12-Month Returns as of January 3: 162.53%
Number of Hedge Fund Holders: 25
LendingClub Corporation (NYSE:LC) is a California-based peer-to-peer lending company, offering a business model that allows individuals to borrow unsecured personal loans worth up to $40,000.
According to Insider Monkey’s Q3 data, 25 hedge funds reported owning stakes in LendingClub Corporation (NYSE:LC), worth $437.3 million, as compared to 23 funds in the preceding quarter, holding stakes amounting to roughly $375 million.
As per the third quarter earnings reported on October 27, LendingClub Corporation (NYSE:LC) posted earnings per share of $0.26, beating estimates by $0.13. Revenue over the period totaled $246.17 million, increasing 246.17% year-over-year, outperforming estimates by $24.20 million.
Wedbush analyst David Chiaverini on December 21 assumed coverage of LendingClub Corporation (NYSE:LC) with an Outperform rating and a price target of $40, down from $50. The analyst appreciated the LendingClub Corporation (NYSE:LC)’s new business model following the acquisition of Radius Bank earlier this year, stating that the company offers high expected growth, better credit quality than peers, and a “reasonable” valuation.
The largest LendingClub Corporation (NYSE:LC) stakeholder as of Q3 2021 is Cathie Wood’s ARK Investment Management, with 2.88 million shares worth $81.5 million.
In addition to Devon Energy Corporation (NYSE:DVN), NVIDIA Corporation (NASDAQ:NVDA), and Ford Motor Company (NYSE:F), LendingClub Corporation (NYSE:LC) is one of the best multibagger stocks to invest in.
8. Signet Jewelers Limited (NYSE:SIG)
12-Month Returns as of January 3: 239.93%
Number of Hedge Fund Holders: 33
Signet Jewelers Limited (NYSE:SIG) made it to our list of the best multibagger stocks, having gained about 239.93% return over the last twelve months. Headquartered in Ohio, Signet Jewelers Limited (NYSE:SIG) is the largest retailer of diamond jewelry in the world. The company owns jewelry brands including Zales, Kay Jewelers, Jared, and JamesAllen.com, and is a leading distributor in the American, Canadian, and UK markets for diamonds.
Posting its Q3 earnings on December 2, Signet Jewelers Limited (NYSE:SIG) announced earnings per share of $1.43, topping estimates by $0.71. The quarterly revenue jumped 18.27% year-over-year to $1.54 billion, exceeding estimates by $110.62 million.
On December 3, Citi analyst Paul Lejuez raised the price target on Signet Jewelers Limited (NYSE:SIG) to $100 from $93 and kept a Neutral rating on the shares. The analyst views the company’s guidance as conservative.
Signet Jewelers Limited (NYSE:SIG) announced on November 18 that it has finalized its acquisition of Diamonds Direct, an American specialty diamonds company, for $490 million in cash. Diamonds Direct currently operates 22 locations with mature stores having a median annualized revenue of approximately $18.5 million over the last twelve months, which will help Signet Jewelers Limited (NYSE:SIG) expand its operations and improve company fundamentals.
A total of 33 hedge funds monitored by Insider Monkey were long Signet Jewelers Limited (NYSE:SIG) in the third quarter, with total stakes valued at $1.16 billion. The leading Signet Jewelers Limited (NYSE:SIG) stakeholder is Robert Joseph Caruso’s Select Equity Group, holding 5.23 million shares worth almost $413 million.
Signet Jewelers Limited (NYSE:SIG) is one of the top multibagger stock picks of hedge funds, in addition to Devon Energy Corporation (NYSE:DVN), NVIDIA Corporation (NASDAQ:NVDA), and Ford Motor Company (NYSE:F).
7. Grid Dynamics Holdings, Inc. (NASDAQ:GDYN)
12-Month Returns as of January 3: 214.60%
Number of Hedge Fund Holders: 18
Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) is an IT company that offers digital transformation services to enterprise-level firms. Grid Dynamics Holdings, Inc. (NASDAQ:GDYN)’s services include technical consulting, software design, development, testing, emerging technology engineering services, lean labs, and legacy re-platforming solutions. The company provides its services to the retail, technology, consumer packaged goods, manufacturing, and finance sectors.
In the third quarter earnings results, announced on November 4, Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) posted earnings per share of $0.11, exceeding estimates by $0.03. The revenue gained 120% year-over-year, reaching $57.93 million, outperforming estimates by $7.06 million.
Needham analyst Mayank Tandon raised the price target on Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) to $45 from $30 and kept a Buy rating on the shares on November 5. The company posted “stellar” Q3 results that beat expectations across the board as revenue jumped 15% from Q2 on an organic basis.
Of the 18 hedge funds that were long Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) in Q3, Driehaus Capital is the largest company stakeholder, increasing its stake in Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) by 242% as of September 2021. Driehaus Capital owns 2.72 million shares of Grid Dynamics Holdings, Inc. (NASDAQ:GDYN), worth $79.5 million.
Here is what Baron FinTech Fund has to say about Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) in its Q3 2021 investor letter:
“Grid Dynamics Holdings Inc. provides outsourced software development to business customers. Shares increased after the company reported strong quarterly results with 72% organic revenue growth and raised annual guidance. Grid is benefiting from robust demand as clients across industries invest in digital transformation. The company issued new shares in late June, which temporarily depressed the share price but provided dry powder for M&A. We continue to own the stock because we believe the company has unique capabilities and a long runway for growth.”
6. Chico’s FAS, Inc. (NYSE:CHS)
12-Month Returns as of January 3: 227.98%
Number of Hedge Fund Holders: 19
Chico’s FAS, Inc. (NYSE:CHS) is an American retailer of clothing and accessories for women, operating online and in-stores across the US and Canada. In Q3 2021, 19 hedge funds monitored by Insider Monkey were bullish on Chico’s FAS, Inc. (NYSE:CHS), down from 22 funds in the preceding quarter.
Chico’s FAS, Inc. (NYSE:CHS) is one of the best multibagger stocks to buy now, delivering a 227.98% return for 2021. In the third quarter earnings report, announced on November 30, Chico’s FAS, Inc. (NYSE:CHS) posted an EPS of $0.18, beating estimates by $0.20. Revenue over the period equaled $453.64 million, up 29.09% from the preceding year quarter, outperforming estimates by $27.54 million.
Riley analyst Susan Anderson on December 1 raised the price target on Chico’s FAS, Inc. (NYSE:CHS) to $6 from $5.25 and kept a Neutral rating on the shares post the Q3 results.
The largest Chico’s FAS, Inc. (NYSE:CHS) stakeholder from Q3 is Jim Simons’ Renaissance Technologies, with 6.73 million shares worth $30.2 million.
Here is what Miller Value Partners has to say about Chico’s FAS, Inc. (NYSE:CHS) in its Q3 2021 investor letter:
“Chico’s FAS (CHS) declined 31.8% during the period despite reporting Q2 revenue of $472M (+54% Y/Y) and EBITDA of $50M, both well ahead of consensus of $407M and $5M, respectively. Gross margin of 38.4% reached the highest level in five years, driven by controlled inventories and lower promotional levels while free cash flow (FCF) of $35M improved from $6.7M Y/Y and $8.9M in 2Q19. Management raised their FY21 outlook, including net sales improvement of 32%-35% (from 28%-34%) and gross margin improvement of 20%-22% (from 18%-20%), implying net sales of $1.75Bn-$1.79Bn (versus consensus of $1.75Bn) and EBITDA of $45M-$98M (versus consensus of $55M). Additionally, Chico’s announced the appointment of Patrick Guido as CFO. Mr. Guido brings over twenty years of retail experience to the management team, including as the CFO of lululemon (LULU) and Treasurer of VF Corporation (VFC).”
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Disclosure: None. 10 Best Multibagger Stocks To Buy Now is originally published on Insider Monkey.
