In this article, we will discuss the 10 most buzzing stocks to buy now.
Stock Market Volatility
September and October tend to be the most volatile months for the stock market, particularly during election years. This was recently discussed by Sam Stovall, the chief investment strategist at CFRA Research, who expects the volatility to stay until the end of October.
Stovall says that while the S&P 500 recovered all its 2022 bear market losses by January this year, and reached 22 new all-time highs by March, equities have digested some of these gains and experienced sector rotation away from 2023 high flyers into more defensive areas of the market. Hence, the year started great, but the markets are declining once again. The S&P 500’s average volatility in October 2023 was 35% higher than the average for the remaining 11 months of the year.
Investors are concerned that the Fed will be slower to lower interest rates while inflation remains sticky and GDP growth begins to cool. Stovall expects three 25-basis point cuts this year, followed by another four in 2025. He thinks that while a 50 basis point cut is rare since it only ever happened twice, in 2001 and then 2007, it is still not unlikely given that the economy is worse than expected.
According to Stovall, investors need to be prepared for this increased volatility as the market digests the Fed’s actions and the potential impact on the economy. The market will likely remain uncertain until the Fed can find the right balance between slowing down the economy and stopping inflation, without causing a recession.
Tom Lee, Fundstrat Global Advisors managing partner and head of research, is of a similar idea, suggesting that investors should remain cautious over the next 8 weeks, due to both uncertainty surrounding elections and the September cuts. He says that the stock market may experience a 7-10% pullback, considering there have already been two 7% corrections this year.
Lee thinks at least a 5% pullback can be anticipated, but if it’s only 1-2%, then that’s negligible. But despite the recommended caution for the 8 weeks starting September, he thinks the volatility does not translate into a tough full-year. He views this pullback as a buying opportunity, believing that the market has not yet reached its peak for 2024.
As Lee encourages investors to be ready to buy the dip, we are here with a list of the 10 most buzzing stocks to buy now.
Methodology
To compile our list, we sifted through Yahoo Finance’s list of stocks that are experiencing high trading volumes. We looked at the analyst and investor sentiment for each stock and narrowed down our selection to 10 stocks that were the most popular among elite hedge funds. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q2 2024.
Note: All price/volume data is as of September 6.
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 Most Buzzing Stocks To Buy Now
10. Nu Holdings Ltd. (NYSE:NU)
Volume: 48.735 million
Average Volume (3-Month): 41.735 million
Number of Hedge Fund Holders: 59
Nu Holdings Ltd. (NYSE:NU) is a Brazilian digital bank and fintech company that provides financial services to the underserved and unbanked population in Brazil and other Latin American countries. The product offerings are across spending, saving, investing, borrowing, and protecting.
During the second quarter of 2024, the company’s customer base grew strongly, with 5.2 million new customers joining the platform, taking the total customer count to 104.5 million, a 25% increase year-over-year. The active base increased by 27%. There are established primary banking relationships with about 60% of this active customer base
Brazil added an average of 1.2 million new customers monthly bringing the total to 95.5 million at the end of Q2. Mexico experienced strong growth with 1.2 million net ads in the quarter resulting in 7.8 million customers. Colombia surpassed the 1 million customer mark with almost 1.3 million customers following the successful launch of the Cuenta product.
All of this resulted in a revenue of $2.85 billion, recording a 52.45% year-over-year rise. Revenue from credit cards increased by 39% year-over-year, reaching a total of $14.3 billion. The lending portfolio expanded by 92% year-over-year, reaching a total of $4.6 billion.
Interest-earning installments now represent 28% of the credit card portfolio, up from 26% last quarter. PIX and Boleto financing products drove this growth. These products offer attractive returns and meet customer needs.
With 59 hedge funds long in the company, it is evident that the company is expected to be well-positioned for growth. The largest stake amounts to $257,140,883 by Atmos Capital.
Baron FinTech Fund stated the following regarding Nu Holdings Ltd. (NYSE:NU) in its first quarter 2024 investor letter:
“Nu Holdings Ltd. (NYSE:NU) is a digital bank with operations in Brazil, Mexico, and Colombia. Shares appreciated during the quarter after the company reported strong balance sheet growth and improving margins. New product launches and expansion in newer countries are yielding favorable results. Nu also benefited from inclusion in the MSCI Brazil Index, which prompted buying from passively managed funds. We continue to own the stock because Nu is disrupting the financial services industry in Latin America with its digital distribution and intense focus on user experience. The company has grown to serve over 90 million customers in less than 10 years, largely through word-of-mouth referrals. We believe the company’s superior product offering will drive continued share gains in large and growing markets.”
9. AT&T Inc. (NYSE:T)
Volume: 52.499 million
Average Volume (3-Month): 32.828 million
Number of Hedge Fund Holders: 71
AT&T Inc. (NYSE:T) is the world’s third-largest telecommunications holding company by revenue and the second-largest wireless carrier in the US behind Verizon but ahead of T-Mobile. Its portfolio spans wireless, wireline, and broadband services, both domestically and internationally.
It has nearly 28 million consumer and business locations with fiber and remains on track to pass more than 30 million fiber locations by the end of 2025.
It’s a compelling investment due to its focus on modern connectivity solutions, expanding its 5G and fiber networks, and offering superior broadband speeds and reliability.
The company has strong pricing power which allows it to generate healthy revenue and maintain profitability. 71 hedge funds hold it currently. As of June 30, the highest stake holder was Citadel Investment Group with a value of $518,594,606.
However, in Q2 2024, there was a decline of 0.4% in the company’s year-over-year revenue. The earnings per share still managed to stay at $0.57.
Consumer Wireline in Mexico drove more than 80% of the total revenue offset by continued declines in Business Wireline. Mobility service revenues grew by 3.4%. It delivered 419,000 postpaid phone net adds in this quarter.
Postpaid phone average revenue per user was up 1.4% year-over-year. Broadband revenues grew 7% due to strong fiber revenue growth of 18%. It also added 239,000 AT&T Fiber, and 139,000 AT&T Internet Air subscribers in Q2.
For the full year, broadband revenue growth guidance is more than 7%. The mobile business is performing well and is expected to grow in the remaining 2024. The focus on selling both mobile and internet services is driving strong returns on investment, making it a top buzzing stock.
Miller Value Income Strategy made the following comment about AT&T Inc. (NYSE:T) in its Q3 2023 investor letter:
“Our third-largest holding at quarter end was AT&T Inc. (NYSE:T), a leading provider of communications and connectivity services in the US. At $15/share, the stock trades at the same price it did almost thirty years ago. The share price is much less interesting to us in relation to where it has traded in the past than in relation to how much cash the company generates and what management is doing with it. At just over 6x earnings, the stock trades near its lowest price-to-earnings (P/E) multiple ever, also representing close to its largest-ever P/E discount to the stock market. The business converts most of its earnings to free cash flow, implying a forward free cash flow yield north of 15%. Just under half of free cash flow is going toward the dividend (7.5% yield), while much of the balance is going to debt paydown. In other words, if the stock does not fall below its lowest-ever valuation, investors clip a rock-solid 7.5% in cash, while owning a growing portion of a very steady business as management reduces debt outstanding. A discounted cash flow model will suggest that intrinsic value for shares begins with a “2,” suggesting the stock is undervalued on an absolute basis. The lack of volatility in the underlying fundamentals also makes it unique when compared to many other things we own, which reduces the probability of permanent capital impairment and argues for a significant weight in the portfolio.
AT&T looks particularly attractive when compared to some of the larger names dominating the S&P 500. Compare the stock to Apple, for instance, whose revenues and profits are likely to shrink this year, even as it trades at 29x this year’s earnings estimate. The ongoing return to rationality and capital accountability, along with extreme valuations in the megacap tech stocks, have us more excited about our portfolio’s prospects than we can remember for quite some time. As always, we remain the largest investors and welcome any questions or comments.”
8. Intel Corp. (NASDAQ:INTC)
Volume: 85.307 million
Average Volume (3-Month): 64.564 million
Number of Hedge Fund Holders: 75
Intel Corp. (NASDAQ:INTC) is one of the world’s leading semiconductor chip manufacturers by revenue, playing a significant role in advancing the x86 series of instruction sets, widely utilized in personal computers. The company’s foray into augmented reality focuses on using its chips to power AR devices.
Earlier this year, the Japanese division partnered with 14 domestic firms to establish a research body focused on automating “back-end chipmaking processes,” such as packaging, as Japan and the US work to strengthen their chip supply chains amidst geopolitical tensions.
In Q2, it introduced its new Xeon 6 artificial intelligence chips designed to compete with industry competitors NVIDIA and AMD. Despite that, the company recorded a 0.9% year-over-year revenue decline in this quarter, with the total revenue amounting to $12.83 billion.
In August, the company announced it was cutting 15% of the 125,000-strong workforce and suspended dividends to cut spending and streamline the company.
Even with these massive layoffs, the inventory problem won’t be resolved anytime soon because the company has 137 days of inventory, worth over $11.2 billion. This is much higher than the industry average of 90 days.
CTO Greg Lavender stated that the company’s cumulative software revenue could reach $1 billion by the end of 2027. Such an outlook brings investor trust to Intel Corp. (NASDAQ:INTC). 75 hedge funds hold it as of June 30, with the largest stake at $742,084,558 by Citadel Investment Group.
Ariel Global Fund stated the following regarding Intel Corporation (NASDAQ:INTC) in its Q2 2024 investor letter:
“Alternatively, several positions weighed on performance. One of the world’s largest semiconductor chip manufacturers by revenue, Intel Corporation (NASDAQ:INTC), underperformed in the period on news of a longer than expected turnaround in profitability within the Foundry business. This was exacerbated by disappointing near-term guidance due to a weakening demand environment signaling an extended replacement cycle. We view the quarter as a temporary trough that should dissipate as we see signs of a cyclical recovery for personal computers (PCs) and central processing units (CPUs), driven by the Windows 11 upgrade. In our view, the market is overlooking the progress Intel is making to advance its manufacturing process. Not to mention, the company’s efforts to serve as a viable second source foundry partner of leading-edge silicon. We believe the separation of the design and manufacturing businesses will be a key catalyst in unlocking improved financial performance while also enhancing the competitiveness of the foundry business.”
