In this article, we will be taking a look at 10 stocks that will skyrocket. To skip our detailed analysis of cheaply-valued stocks that are set to gain in the future, you can go directly to see the 5 Stocks That Will Skyrocket.
With the U.S. stock market plunging into bear territory, investors have typically been wary when it comes to picking up new stocks. According to Forbes, the S&P 500 stock index fell by over 20% between January and July, leading to intense economic fear. Coming out of the 2008 economic crisis, numerous investors began considering big tech and growth champions to help their portfolios recover from the devastation of the crisis, which lead to a resurgence in growth investing.
Stocks like Micron Technology, Inc. (NASDAQ:MU), Etsy, Inc. (NASDAQ:ETSY), and Shopify Inc. (NYSE:SHOP), which offer investors growth prospects in the tech and e-commerce sectors, are beginning to gain popularity among growth investors this year. The main attraction comes from cheaper valuations for otherwise profitable stocks, according to Jack Janasiewicz, a lead portfolio strategist at Natixis Investment Managers Solutions. According to Reuters, Mr. Janasiewicz stated that the current valuations in the tech sector are some of the most attractive they’ve been in a long time. The S&P 500’s tech sector had a forward price-to-earnings ratio of 19.1x as of this July.
According to a more recent Reuters report, interest in U.S. growth stocks was cemented this August. $7.1 billion worth of equities were bought at the beginning of the month, with growth stocks recording their largest weekly inflow of cash since December at $2.5 billion, showcasing the rising popularity of growth investing. For the tech sector, and even the consumer discretionary sector, August has also shown massive growth of 20% and 25% respectively, according to the Wall Street Journal.
With inflation fears receding somewhat after inflation rates declined month-over-month in July, U.S. stocks are now on the rise once more. The tech-focused Nasdaq composite rose by 2.9%, while the S&P 500 and Dow Jones Industrial Average rose by 2.1% and 1.6% respectively. While tech stocks were among the underperformers at the start of the year, recent inflation data has catalyzed their comeback. The worst-performing stocks in the Russell 1000 during the first six months of the year rose by over 32% in the weeks leading up to August. At the same time, the stocks that had been performing well at the start of the year barely rose by 3%. The market is beginning to look better for tech and growth options in the coming months, as a result.
With that background in mind, let’s now take a look at 10 stocks that will skyrocket.
Photo by lucas Favre on Unsplash
Our Methodology
Using factors like positive earnings per share, revenue growth, and profitable products, among others, we have selected cheap stocks that are expected to skyrocket in the coming years. Insider Monkey tracks over 9oo hedge funds, and we use this hedge fund data to find stocks that are popular among a select group of top performing funds. These stocks have mostly positive analyst ratings and price targets showing upside potential as well. They are ranked based on their share prices as of August 10, from the lowest to the highest.
Stocks That Will Skyrocket
10. Palantir Technologies Inc. (NYSE:PLTR)
Number of Hedge Fund Holders: 36
Share price as of August 10: $9.65
Palantir Technologies Inc. (NYSE:PLTR) is an information technology company that builds and deploys software platforms for the intelligence community in the U.S. The company offers software platforms like palantir gotham, palantir foundry, and apollo, among other products and services.
On August 9, Morgan Stanley’s Keith Weiss reiterated an ‘Equal Weight’ rating on Palantir Technologies Inc. (NYSE:PLTR) shares. Weiss also placed an $11 price target on the stock.
The company’s $473 million in revenue represented an exponential rise in the second quarter of 25.92% year-over-year. It also beat estimates by $1.3 million. Palantir Technologies Inc.’s (NYSE:PLTR) projected EPS growth rate for the next three-to-five years is 26.8%. The company also expects a 30% rise in annual sales through 2025.
Palantir Technologies Inc. (NYSE:PLTR) was held by 36 hedge funds in the first quarter, with a total stake value of $611 million. Of those funds, Catherine Wood’s ARK Investment Management was the largest stakeholder in the company, holding 541,577 shares worth $4.7 million.
Palantir Technologies Inc. (NYSE:PLTR) is an undervalued tech stock many hedge funds are piling into today. Micron Technology, Inc. (NASDAQ:MU), Etsy, Inc. (NASDAQ:ETSY), and Shopify Inc. (NYSE:SHOP) are some other tech names popular among institutional investors in the first quarter.
9. Exelixis, Inc. (NASDAQ:EXEL)
Number of Hedge Fund Holders: 30
Share price as of August 10: $19.29
Exelixis, Inc. (NASDAQ:EXEL) is a biotechnology company focused on oncology. The company works to discover, develop, and commercialize new medicines to treat cancers in the U.S. It is based is Alameda, California.
Cowen analyst Yaron Werber raised the price target on Exelixis, Inc. (NASDAQ:EXEL) shares on August 10 from $24 to $26. The analyst also reiterated an ‘Outperform’ rating on the stock.
Exelixis, Inc. (NASDAQ:EXEL) had EPS of $0.20 in the second quarter, beating estimates by $0.03. The company’s revenue was $419.4 million, up 8.9% year-over-year and also beating estimates, by $26.4 million. Exelixis, Inc.’s (NASDAQ:EXEL) is projected to deliver EPS growth of 36.7% over the next three-to-five years. In a press release from this January, the company mentioned that the commercial success of its CABOMETYX tablets will allow it to advance its portfolio of differentiated therapeutic candidates. It also offered full year 2022 net product revenues guidance of $1.3 billion to $1.4 billion.
There were 30 hedge funds long Exelixis, Inc. (NASDAQ:EXEL) in the first quarter of 2022, with a total stake value of $1.1 billion. That’s a noteworthy increase compared to 26 hedge funds with a total stake value of $825 million a quarter earlier.
8. CarGurus, Inc. (NASDAQ:CARG)
Number of Hedge Fund Holders: 29
Share price as of August 10: $20.24
CarGurus, Inc. (NASDAQ:CARG), an online automotive marketplace provider, connects buyers and sellers of new and used cars. The company’s brands include CarGurus, Autolist, and PistonHeads. It operates in Canada, the UK, and the U.S.
An ‘Outperform’ rating was reiterated on CarGurus, Inc. (NASDAQ:CARG) shares on August 9 by analyst Brad Erickson at RBC Capital. Erickson also placed a $35 price target on the stock.
CarGurus, Inc. (NASDAQ:CARG) expects EPS growth of 20.5% over the next three-to-five years. The company benefits from an asset-light business model, has no long-term debt, and $375 million in cash, cash equivalents, and short-term investments as of the close of the first quarter. CarGurus, Inc.’s (NASDAQ:CARG) had non-GAAP operating income of $62.2 million in the first quarter, a 28% rise year-over-year. It had second quarter EPS of $0.30, beating estimates by $0.01, and revenue of $511.2 million, beating estimates by $3.9 million.
Out of 912 hedge funds that filed 13Fs in the first quarter, 29 of them held stakes in CarGurus, Inc. (NASDAQ:CARG). Their collective stakes were valued at $338.9 million, with PAR Capital Management being the largest stakeholder in the company, holding 2.89 million shares worth $123 million.
7. Pinterest, Inc. (NYSE:PINS)
Number of Hedge Fund Holders: 56
Share price as of August 10: $22.93
Pinterest, Inc. (NYSE:PINS) is a social media company based in San Francisco, California that is popular among older women and do-it-yourselfers. Shares of PINS have lost 38% in 2022.
Evercore ISI analyst Mark Mahaney raised his price target on Pinterest, Inc. (NYSE:PINS) shares on August 2 from $24 to $28. Mahaney also reiterated an ‘In Line’ rating on them.
In the first quarter, 56 funds were long Pinterest, Inc. (NYSE:PINS), compared to 57 hedge funds in the previous quarter. Their total stake values were approximately $1.3 billion in both quarters.
Harding Loevner, an investment management firm, mentioned Pinterest, Inc. (NYSE:PINS) in its first quarter 2022 investor letter. Here’s what the firm said:
“Other detractors within Communication Services included Pinterest (NYSE:PINS), which is finding it hard to sustain the extremely rapid growth they enjoyed over the past two years of pandemic lockdown and social distancing.”
6. Revolve Group, Inc. (NYSE:RVLV)
Number of Hedge Fund Holders: 23
Share price as of August 10: $29.21
Revolve Group, Inc. (NYSE:RVLV), a global consumer discretionary company, works to connect consumers, global fashion influencers, and brands. The company is based in Cerritos, California.
Anna Andreeva, a Needham analyst, kept her ‘Buy’ rating on Revolve Group, Inc. (NYSE:RVLV) on August 8, alongside placing a $40 price target on the stock.
Analyst Andreeva noted an acceleration in order value and strong gross margins in Revolve Group, Inc.’s (NYSE:RVLV) second quarter results. The company’s P/E ratio was 21.2x in 2021, and its EPS is expected to grow by 5.5% over the next three-to-five years. Revolve Group, Inc. (NYSE:RVLV) showed sales growth of 58% in the first quarter. The company’s high-fashion website, FWRD, grew its sales in 2021 by 71%.
Fisher Asset Management was the largest stakeholder in Revolve Group, Inc. (NYSE:RVLV) in the first quarter, out of a total of 23 hedge funds long the stock. Fisher Asset Management held 1.7 million shares worth $91.4 million.
Polen Capital, an investment management firm, mentioned Revolve Group, Inc. (NYSE:RVLV) in its first quarter 2022 investor letter. Here’s what the fund said:
“Online fashion retailer Revolve had another favorable quarter, and our investment in this company has continued to compound at a high level. We were impressed with the company’s recent results, especially the combination of customer growth, the growing number of orders per customer, and improving average order values. We believe the company still has considerable room for growth as it benefits from the bourgeoning trend of fashion going online, while its investments in adjacent categories, like beauty, are increasing the market opportunity its addressing.”
Revolve Group, Inc. (NYSE:RVLV), like Micron Technology, Inc. (NASDAQ:MU), Etsy, Inc. (NASDAQ:ETSY), and Shopify Inc. (NYSE:SHOP), is an attractive growth option that may skyrocket in the near future.
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Disclosure: None. 10 Stocks That Will Skyrocket is originally published on Insider Monkey.
