In this article, we will discuss the 10 Best Stocks Under $100 to Invest In.
Wall Street experts believe that mid-cap stocks might be well-placed for a strong run-up. As per Ryan Detrick (Chief Market Strategist at Carson Group), historically, midcaps outperform once the US Fed actually initiates cutting rates. According to him, the small and mid-caps are expected to surge up to 20% over the upcoming 12 months, far exceeding the large-cap counterparts.
Furthermore, Goldman Sachs believes that mid-caps outperform large- and small-cap stocks over the 12 months after the first rate cut. As market experts continue to expect a soft landing, the investors might look for other options apart from the biggest companies.
What Happened in Q3 2024 and What to Expect in Q4 2024?
As per the earnings sight report from FactSet dated 1st November, the S&P 500 continues to report mixed results. The Q3 remained strong for risk assets and safe havens, with the US markets delivering an all-time closing high to finish Q3 and bonds posting positive returns, as per JPMorgan Asset Management. Overall, the S&P 500 gaining for 4th straight quarter (making 18 new highs), and the US Treasuries and corporate bonds rallying with the decline in yields dominated much of the movements in Q3 2024. The asset management firm also added that gold saw its biggest gain since Q1 2016 (thanks to the expectations of faster rate cuts) and China’s stimulus supported equity market returns.
What is expected for Q4 2024 now? JPM believes that positive expected earnings growth, cooling inflation, easing policies of central banks, and firm job creation should help create a strong backdrop for risk assets. Wall Street analysts believe that mid-caps might be in a position to see strong growth moving forward.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
Outlook for Mid-caps
As per BofA’s Jill Carey Hall, mid-caps can be considered as the “best hedge” for the near term.
According to Hall, the mid-caps have experienced better recent guidance and revision trends and have also surpassed the small caps on average in the downturn scenarios. Mid-caps can also act as a hedge against fewer-than-expected rate cuts, considering that small caps are rate-sensitive.
According to Goldman’s Jenny Ma, the start of the rate-cut cycle remains a potential source of incremental equity demand and a boost to broader investor risk sentiment. Moreover, over the short term, mid-cap performance as compared to other segments is expected to be dependent on the strength of economic growth data, along with the pace of the easing cycle.
As per Wells Fargo, mid-cap growth stocks are technically oversold as of now. Despite this, these stocks have a significant scope to outperform. It also added that stability in their earnings, risk, liquidity, and balance sheet appear to be more attractive as compared to small caps.
With these trends in mind, let’s take a look at the 10 Best Stocks Under $100 To Invest In.
A large computer terminal full of complex calculations tracking the company’s cash flow and investment management decisions.
Our Methodology
To list the 10 Best Stocks Under $100 To Invest In, we first used a screener to extract stocks trading under $100. Next, we narrowed our list by selecting the ones having high hedge fund holdings. Finally, the stocks were arranged in the ascending order of their hedge fund sentiments, as of Q2 2024.
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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Stocks Under $100 To Invest In
10) Shopify Inc. (NYSE:SHOP)
Stock Price as of November 6: $81.92
Number of Hedge Fund Holders: 56
Shopify Inc. (NYSE:SHOP) is a commerce company, providing a commerce platform and services in Canada, the US, Europe, the Middle East, Africa, the Asia Pacific, Australia, China, and Latin America.
Shopify Inc. (NYSE:SHOP)’s competitive advantages are expected to aid its long-term growth trajectory, which stems from its user-friendly interface, extensive app store, and mobile responsiveness. The company continues to make strong progress in attracting larger enterprise customers via its Shopify Plus offering. This move should fuel higher-value, more stable revenue streams. Recognizing the importance of integrating online and offline commerce, Shopify Inc. (NYSE:SHOP) continues to expand its point-of-sale (POS) solutions and various other omnichannel capabilities.
It is also leveraging AI to enhance its platform’s capabilities, which include improved merchant efficiency and customer experiences. Shopify Inc. (NYSE:SHOP)’s product innovation and comprehensive ecosystem should continue to help it navigate a challenging environment. Wall Street analysts are optimistic about the company’s push into the enterprise market through its Shopify Plus.
This offering provides a strong growth opportunity. Large and well-established enterprises bring increased transaction volumes and more stable and recurring revenue streams. As Shopify Inc. (NYSE:SHOP) has been enhancing its enterprise-level features and building its reputation in this segment, it might see accelerated growth in high-value customers.
Rowan Street Capital, an investment management company, released its second-quarter 2024 investor letter. Here is what the fund said:
Shopify Inc. (NYSE:SHOP) has been an incredibly rewarding investment for those lucky enough to get in early after the company’s initial public offering (IPO) in 2015. The shares have delivered a return of 2,600% or 42% annual. Its revenues have grown at 49% per annum since the end of 2014 from $105 million to estimated $8.6 billion in 2024. The massive e-commerce market is a huge opportunity, as the company’s growth indicates. As you tell from the chart below, revenues are forecasted to grow above 20% for the next 3 years. Keep in mind, Shopify has been around for more than a decade — and it’s still growing at these high rates.
We have owned Shopify for only 2.5 years, establishing our position in the first quarter of 2022 at a cost basis of $60, after the stock collapsed from its highs of $169 in November 2021. In hindsight, our entry may have been a bit premature, as the stock continued to plunge, eventually reaching a low of $27 in October 2022. However, such market movements are inherently unpredictable, and we seized the opportunity to invest in a company we had long admired…” (Click here to read the full text)
9) Cisco Systems, Inc. (NASDAQ:CSCO)
Stock Price as of November 6: $57.87
Number of Hedge Fund Holders: 61
Cisco Systems, Inc. (NASDAQ:CSCO) is engaged in designing, manufacturing, and selling Internet Protocol-based networking and other products associated with the communications and information technology industry in the Americas, Europe, the Middle East, Africa, the Asia Pacific, Japan, and China.
Wall Street believes that Cisco Systems, Inc. (NASDAQ:CSCO)’s portfolio is well-positioned to benefit from trends focused on hybrid work and hybrid cloud environments. The company offers the most comprehensive suite of capabilities throughout converging networking and security markets. Therefore, its competitive advantage stems from the customer switching costs, which should help it in the long term. Cisco Systems, Inc. (NASDAQ:CSCO) continues to place its strategic focus on AI, Cloud, and Security as key growth areas.
Experts remain optimistic about the company’s acquisition of Splunk, a move targeted at enhancing its observability and security portfolios. Cisco Systems, Inc. (NASDAQ:CSCO) has been shifting from a product-centric to a platform-centric approach, primarily in security and observability. This transition should help simplify the customer experience and might lead to higher sales opportunities.
With the networking industry seeing significant changes due to AI and cloud computing trends, Cisco Systems, Inc. (NASDAQ:CSCO)’s commitment to ethernet over InfiniBand should place it well in the evolving market landscape. AI-related networking demand, mainly from sovereign nations and cloud providers, should fuel modest multiple expansion for the company.
The London Company, an investment management company, released a Q3 2024 investor letter. Here is what the fund said:
“Exited: Cisco Systems, Inc. (NASDAQ:CSCO) – Sale reflects slowing growth prospects and risk of value-destroying M&A. Valuation of the shares is attractive, and CSCO offers a 3.3% dividend yield at the current price, which makes it a more attractive holding for our Income Equity portfolio.”
