11 Best Hot Stocks To Buy Right Now

Published on October 19, 2022 at 9:27 am by Omer Farooq in Hedge Funds, News

In this article, we will look at the 11 best hot stocks to buy right now. If you want to explore similar stocks, you can also take a look at 5 Best Hot Stocks To Buy Right Now.

One of Wall Street’s Biggest Bull Slashes Forecast

On October 17 John Stoltzfus, chief investment strategist at Oppenheimer, slashed his year-end price target for the S&P 500 from 4,800 points to 4,000. Though this is down 17% from the bank’s prior target, it still implies a 10% upside from current levels. John Stoltzfus noted that his projections for the end of 2022 factor in a “massive rally short of a miracle” based on the current uncertainty and volatility in the markets. Stoltzfus does not see the Fed pivoting by year-end, however, he sees the market in an “extremely oversold” condition” which can “become a catalyst for a modest rally” as we approach the end of the year.

Analyst Sees Stocks Rallying in the Short Term

On October 17 Morgan Stanley CIO, Mike Wilson, appeared on a call with CNBC where he pointed out that his “intermediate-term view is more constructive” and explained why he sees a rally in stocks in the short term. Mike Wilson said that he does not think it is a “cost-push inflation” situation, it is rather a “demand-pull inflation” situation and is “very serious”. Here are some comments from Mike Wilson:

“We think an earnings recession, and a technical recession at some point, will play through and that’s not fully priced… We’ve had a bearish view all year, we think the 200-week moving average is a really important technical level that a lot of people don’t talk about… The bear market is not over, but you can have major moves off of these technical support levels… We’ve been bearish all year and it’s time for some relief…

We overheated, the Fed reacted to that, financial conditions are tightening, and now we are gonna feel the effects of that on growth, mostly next year. the good news is the market has already discounted almost 100% of what the Fed’s done at this point and I would say that they have discounted very little of the earnings impact that’s going to be felt next year…

We’re not calling for rates to fall down, but maybe they will just stop going up, and that can be enough for equity markets to get excited…”

As of October 17, the S&P 500 has tanked 23% year to date, the Nasdaq is down 32% for the year, and the Dow has lost about 17% since the beginning of 2022. Markets have been hit hard amid high inflation, rising interest rates, and supply-demand imbalances. However, for long-term investors, now might be the time to rack up shares of some of the best-in-class stocks while they are trading at bargain levels. Some of the best momentum stocks to buy now include Constellation Energy Corporation (NASDAQ:CEG), Occidental Petroleum Corporation (NYSE:OXY), and Peabody Energy Corporation (NYSE:BTU).

Photo by Ishant Mishra on Unsplash

Our Methodology

To determine the best hot stocks to buy right now, we screened for companies that have been gaining in 2022. We narrowed down our selection to stocks that are up more than 30% for the year, as of October 14, and also took into account other factors that will propel them to gain further into year-end. We also gave weight to the hedge fund sentiment and analyst ratings for our picks and ranked them according to their year-to-date performance, from lowest to highest.

Best Hot Stocks To Buy Right Now

11. CF Industries Holdings, Inc. (NYSE:CF)

YTD Return as of October 17: 42%

Number of Hedge Fund Holders: 52

CF Industries Holdings, Inc. (NYSE:CF) is a leading American manufacturer of agricultural fertilizers. The company’s primary products include anhydrous ammonia, granular urea, urea ammonium nitrate, and ammonium nitrate. At the end of Q2 2022, 52 hedge funds were long CF Industries Holdings, Inc. (NYSE:CF) and held stakes worth $1.33 billion in the company.

Wall Street is bullish on CF Industries Holdings, Inc. (NYSE:CF). On October 3, RBC Capital analyst Andrew Wong upgraded CF Industries Holdings, Inc. (NYSE:CF) to Outperform from Sector Perform and raised his price target to $135 from $110. On October 4, Citi analyst P.J. Juvekar raised his price target on CF Industries Holdings, Inc. (NYSE:CF) to $120 from $117 and reiterated a Buy rating on the shares. As of October 17, CF Industries Holdings, Inc. (NYSE:CF) has gained 42% year to date and has a 3-month average trading volume of 2.47 million. The stock is one of the best momentum stocks to buy now.

As of June 30, Soroban Capital Partners is the largest shareholder in CF Industries Holdings, Inc. (NYSE:CF) and has stakes worth $213.28 million in the company.

Here is what Carillon Carillon Tower Advisers had to say about CF Industries Holdings, Inc. (NYSE:CF) in its first-quarter 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. CF Industries (NYSE:CF) manufactures and distributes nitrogen fertilizer. The stock rose as Russia’s invasion of Ukraine accelerated already rising fertilizer prices.”

10. First Horizon National Corporation (NYSE:FHN)

YTD Return as of October 17: 43.25%

Number of Hedge Fund Holders: 43

First Horizon National Corporation (NYSE:FHN) is one of the largest banks in southeast America and is among the best momentum stocks to buy now. As of October 17, the stock has gained 43.25% year to date. First Horizon National Corporation (NYSE:FHN) is awarding investors with a strong dividend and is a cash-rich company to invest in. As of October 17, the stock is offering a forward dividend yield of 2.5% and the company has free cash flows of $1.19 billion.

On October 18, First Horizon National Corporation (NYSE:FHN) announced earnings for the fiscal third quarter of 2022. The company reported earnings per share of $0.44 and beat expectations by $0.01. The company generated a revenue of $875 million for the quarter, up 18.6% year over year, and outperformed Wall Street consensus by $55.17 million.

At the end of Q2 2022, First Horizon National Corporation (NYSE:FHN) was spotted on 43 investment portfolios. The collective stakes of these hedge funds amounted to $1.09 billion. This is compared to 44 positions in the preceding quarter with stakes worth $1.05 billion. As of June 30, Segantii Capital is the most prominent investor in First Horizon National Corporation (NYSE:FHN) and has stakes worth $259.97 million in the company.

Here is what Ave Maria had to say about First Horizon Corporation (NYSE:FHN) in its second-quarter 2022 investor letter:

“First Horizon Corporation (NYSE:FHN) is a leading regional bank that merged with IBERIABANK Corporation in 2020 forming a regional financial services company with 412 branches across 12 southern states. On February 28, 2022, The Toronto-Dominion Bank (TD Bank) reached an agreement with First Horizon Corporation to acquire the bank for $25 per share.”

9. Itaú Unibanco Holding S.A. (NYSE:ITUB)

YTD Return as of October 17: 45%

Number of Hedge Fund Holders: 11

Itaú Unibanco Holding S.A. (NYSE:ITUB) is a major Brazilian financial services company. On September 29, Goldman Sachs analyst Tito Labarta raised his price target on Itaú Unibanco Holding S.A. (NYSE:ITUB) to $7 from $5.40 and upgraded the stock to Buy from Neutral. The analyst is bullish on the company’s “superior” profitability, diversified operations, and “resilient” asset quality.

Itaú Unibanco Holding S.A. (NYSE:ITUB) is one of the best momentum stocks to invest in right now. The stock has pulled back significantly and is presenting an attractive entry point for investors. As of October 17, Itaú Unibanco Holding S.A. (NYSE:ITUB) is trading at a PE multiple of 10x and has gained 45% year to date. Itaú Unibanco Holding S.A. (NYSE:ITUB) is profitable and cash-rich. The company has free cash flows of R$127.8 billion and has a trailing twelve-month operating margin of 38.63%.

At the end of Q2 2022, 11 hedge funds were bullish on Itaú Unibanco Holding S.A. (NYSE:ITUB) and held stakes worth $397.5 million in the company. As of June 30, Orbis Investment Management is the leading shareholder in Itaú Unibanco Holding S.A. (NYSE:ITUB) and has stakes worth $127.7 million in the company.

8. Centrais Eletricas Brasileiras SA (NYSE:EBR)

YTD Return as of October 17: 52%

Number of Hedge Fund Holders: 10

Centrais Eletricas Brasileiras SA (NYSE:EBR) is a major Brazilian utility and power generation company. The stock is trading at bargain levels and is also attracting a lot of attention on Wall Street. As of October 17, the stock is trading at a trailing twelve-month PE ratio of 10.96 and has a 3-month average volume of 1.73 million. The stock is among the best momentum stocks to invest in right now and is up 52% for the year, as of October 17.

Wall Street analysts like Centrais Eletricas Brasileiras SA (NYSE:EBR). This August, Bradesco BBI analyst Francisco Navarrete upgraded Centrais Eletricas Brasileiras SA (NYSE:EBR) to Outperform from Neutral and reiterated his R$70 price target on the shares. On September 23, Citi analyst Antonio Junqueira took coverage of Centrais Eletricas Brasileiras SA (NYSE:EBR) with a Buy rating and gave the shares a price target of R$66.

At the end of Q2 2022, Centrais Eletricas Brasileiras SA (NYSE:EBR) was spotted on 10 hedge fund portfolios. The total stakes of these hedge funds amounted to $30.2 million, up from $7.5 million in the previous quarter with 7 positions. The hedge fund sentiment for the stock is positive.

As of June 30, Zimmer Partners is the top shareholder in Centrais Eletricas Brasileiras SA (NYSE:EBR) and has stakes worth $16.4 million in the company.

In addition to Centrais Eletricas Brasileiras SA (NYSE:EBR), other stocks that are up more than 50% for the year, as of October 14, include Constellation Energy Corporation (NASDAQ:CEG), Occidental Petroleum Corporation (NYSE:OXY), and Peabody Energy Corporation (NYSE:BTU).

7. Exxon Mobil Corporation (NYSE:XOM)

YTD Return as of October 17: 59%

Number of Hedge Fund Holders: 72

Exxon Mobil Corporation (NYSE:XOM) is one of the best momentum stocks to buy now. As of October 17, the stock has gained 59% year to date. The company is profitable and cash-rich and has a trailing twelve-month operating margin of 14% and has free cash flows of $49.2 billion. As of June 30, GQG Partners is the largest shareholder in Exxon Mobil Corporation (NYSE:XOM) and has stakes worth $4.06 billion in the company.

Exxon Mobil Corporation (NYSE:XOM) is trading cheaply relative to earnings and is also awarding shareholders with dividend payouts. As of October 17, the stock is trading at a PE multiple of 11x and is offering a forward dividend yield of 3.50%.

On October 7, Wells Fargo analyst Roger Read revised his price target on Exxon Mobil Corporation (NYSE:XOM) to $109 from $116 and maintained an Overweight rating on the shares. Over the past three months, the stock has received 7 Buy ratings and 4 Hold ratings from Wall Street analysts.

At the end of Q2 2022, 72 hedge funds held stakes in Exxon Mobil Corporation (NYSE:XOM). The total value of these stakes amounted to $7.40 billion.

Here is what First Eagle Investments had to say about Exxon Mobil Corporation (NYSE:XOM) in its second-quarter 2022 investor letter:

“Integrated oil and gas giant Exxon Mobil performed well in the second quarter as continued high prices for energy products supported the stock. As the largest refiner in the US, the company has benefitted from wide “crack spreads,” or the margin between the cost of crude oil and the petroleum products extracted from it. Exxon continues to invest in refining capacity in the US, which industrywide has been in steady decline since 2019. We are pleased that Exxon has been using its strong cash flows to reduce debt and to return cash to shareholders through dividends and stock repurchases.”

Some of the best momentum stocks to buy right now, while they are still coming cheap, include Constellation Energy Corporation (NASDAQ:CEG), Occidental Petroleum Corporation (NYSE:OXY), and Peabody Energy Corporation (NYSE:BTU).

6. Nordic American Tankers Ltd (NYSE:NAT)

YTD Return as of October 17: 62%

Number of Hedge Fund Holders: 7

Nordic American Tankers Ltd (NYSE:NAT) is a global tanker company that owns and operates double-hull crude oil tankers. The stock is attracting a lot of attention on Wall Street and is one of the best momentum stocks to invest in. As of October 17, Nordic American Tankers Ltd (NYSE:NAT) has gained 62% year to date and has an average 3-month volume of 5.17 million.

On August 30, Alexander Hansson, a board member of Nordic American Tankers Ltd (NYSE:NAT) disclosed the purchase of 175,000 shares of the company’s common stock at $2.3665 per share. Alexander Hansson has disclosed that he privately owns roughly 1.92 million shares of Nordic American Tankers Ltd (NYSE:NAT).

Wall Street is bullish on Nordic American Tankers Ltd (NYSE:NAT). On September 6, Jefferies analyst Omar Nokta raised his price target on Nordic American Tankers Ltd (NYSE:NAT) to $4 from $3 and upgraded the stock to Buy from Hold.

At the end of Q2 2022, 7 hedge funds disclosed ownership of stakes in Nordic American Tankers Ltd (NYSE:NAT). The total stakes of these hedge funds amounted to $16.8 million, up from $16.4 million in the preceding quarter with 7 positions. As of June 30, Millennium Management is the most prominent investor in Nordic American Tankers Ltd (NYSE:NAT) and has stakes worth $5.81 million in the company.

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