12 Best Low-Priced Growth Stocks To Buy

Published on April 16, 2023 at 9:30 am by Fahad Saleem in Hedge Funds, News

In this article, we will take a look at the 12 best low-priced growth stocks to buy. To see more such companies, go directly to 5 Best Low-Priced Growth Stocks To Buy.

The US stock market is showing signs of unprecedented resilience, defying expectations of several analysts and hedge fund managers, including the Big Short Michael Burry, who recently said in a tweet that he was “wrong to say sell.” Burry was referring to his one-word tweet posted on January 31, saying “Sell.”

In separate tweet posted on March 30, Michael Burry shared a chart showing S&P 500’s average returns following down years and said the following:

“Going back to the 1920s, there has been no BTFD generation like you. Congratulations.”

Burry was referring to the success of buy-the-dip strategy that many investors opted when the markets started to fall in 2022.

The Nasdaq 100 entered a fresh bull market on March 29, gaining 20% from its lows back in December 2022. The latest rally was led by major tech companies like Microsoft, Apple and Nvidia.

The latest rally comes as fears of the latest banking crisis that started after the collapse of the Silicon Valley Bank begin to recede. According to a Bloomberg report, Chris Larkin, managing director of trading and investing at E*Trade Financial Corp, said that as people start to see the “end of the rate-hike tunnel,” it’s not surprising to see growth and tech stocks rebounding since they suffered massively when the Federal Reserve started to increase interest rates.

Over the past few weeks we have been consistently mentioning in our articles how several investors and hedge funds are recommending their clients and investors to buy the dip while it lasts. Wise investors and stock pickers have been recommending investors to not let the latest volatility blur their long-term outlook and pick businesses that can withstand the test of the time. It seems the market has started to turn the corner and analysts who were forecasting a market rebound in the second half of 2023 were right. But only time would tell what happens in the coming months because if the past few months have taught us anything, it’s that history is no longer a guide when it comes to the latest market cycles and dynamics.

A “Dislocation” in Expectations?

Many analysts still believe the markets are being overly optimistic. Recently, James Sullivan, JPMorgan’s Head of Asia Pacific Equity Research, said in an interview with Bloomberg that JPMorgan expects another 25bps rate hike from the Federal Reserve, after which the firm expects the central bank to hit pause on rate hikes. Sullivan said that markets are pricing in two to three rate cuts between the Fed’s May meeting and the end of 2023. Sullivan calls this a significant “dislocation” in expectations.

Answering a question about the latest NASDAQ rally, Sullivan said many investors are treating tech as a defensive sector since the sector is led by big tech companies that are cash-rich. But Sullivan calls this development ironical.

In January, Jonathan Golub, Credit Suisse’s US equity strategist and quantitative research head, said in an interview with Bloomberg that he was expecting growth stocks to outperform in 2023.

“Last year the whole story was value — we think that growth snaps back this year,” Golub said.

Photo by nick chong on Unsplash

Our Methodology

For this article, we first used the Finviz stock screener to identify stocks priced under $20 with a quarter-over-quarter sales growth of at least 30%, and over 30% sales growth over the past five years. From the resultant dataset, we picked 12 stocks with the highest number of hedge fund investors. The list is ranked in ascending order of the number of hedge fund investors.

Best Low-Priced Growth Stocks To Buy

12. EMX Royalty Corporation (NYSE:EMX)

Number of Hedge Fund Holders: 3

Canadian company EMX Royalty Corporation (NYSE:EMX) explores for and generates royalties from metals properties. EMX Royalty Corporation (NYSE:EMX) explores for gold, silver, nickel and palladium, among other metals. In March, EMX Royalty Corporation (NYSE:EMX) posted its full-year results. Revenue in the period came in at C$18.28 million, a 142% increase year over year. Net income in the period was C$3.35 million, compared to a loss of C$23.73 million posted in the year before.

3 hedge funds in Insider Monkey’s database had stakes in EMX Royalty Corporation (NYSE:EMX) at the end of the fourth quarter of 2022. The most notable stakeholder of EMX Royalty Corporation (NYSE:EMX) was Eric Sprott’s Sprott Asset Management which owns a $7.1 million stake.

11. Organigram Holdings Inc. (NASDAQ:OGI)

Number of Hedge Fund Holders: 7

Canadian cannabis company Organigram Holdings Inc. (NASDAQ:OGI) ranks 11th in our list of the low-priced growth stocks to buy. In January this year Organigram Holdings Inc. (NASDAQ:OGI) posted its fiscal first quarter results. Net income in the period totaled $5.33 million. Revenue in the quarter jumped about 42.4% year over year to reach $43.3 million, beating estimates by $10.89 million. Adjusted EBITDA came in at $5.6 million.

At the end of the last quarter of 2022, 7 hedge funds in Insider Monkey’s database had stakes in Organigram Holdings Inc. (NASDAQ:OGI). The biggest stakeholder of Organigram Holdings Inc. (NASDAQ:OGI) among these hedge funds was DE Shaw with a $1.6 million stake.

10. NeoGames S.A. (NASDAQ:NGMS)

Number of Hedge Fund Holders: 8

Israel-based iLottery solutions company NeoGames S.A. (NASDAQ:NGMS) ranks 10th in our list of the low-priced growth stocks to buy. NeoGames S.A. (NASDAQ:NGMS)’s revenue in the fourth quarter increased by 465% year over year to reach $69.22 million. However, the figure missed estimates by $6.32 million. Non-GAAP EPS in the quarter came in at $0.22, beating Wall Street forecasts by $0.33.

In December 2022, Deutsche Bank started covering NeoGames S.A. (NASDAQ:NGMS) with a Buy rating and a $17 price target.

Insider Monkey’s proprietary database of 943 hedge funds shows that 8 hedge funds had stakes in NeoGames S.A. (NASDAQ:NGMS) at the end of the fourth quarter of 2022.

9. Blink Charging Co. (NASDAQ:BLNK)

Number of Hedge Fund Holders: 8

EV charging company Blink Charging Co. (NASDAQ:BLNK) is gaining ground after the company said it won “Multiple Award Schedule” contract by the U.S. General Services Administration (GSA). The contract will allow government customers and federal agencies to purchase Blink Charging Co. (NASDAQ:BLNK)’s equipment and services through the GSA Schedule.

Barclays recently started covering Blink Charging Co. (NASDAQ:BLNK) with an Equal Weight rating. Barclays said while a major chunk of Blink Charging Co. (NASDAQ:BLNK)’s revenue comes from equipment sales, the company’s expansion of its network of owned/operated chargers could create new recurring revenue streams from electricity sales and network fees.

8. Vital Farms, Inc. (NASDAQ:VITL)

Number of Hedge Fund Holders: 13

Texas-based pasture-raised food products company Vital Farms, Inc. (NASDAQ:VITL) ranks 8th in our list of low-priced growth stocks to buy. In March, Vital Farms, Inc. (NASDAQ:VITL)’s GAAP EPS came in at $0.04, missing estimates by $0.01. Revenue in the quarter increased by 42.2% year over year to a total $119.08 million, beating estimates by $9.81 million.

For the full-year 2023, Vital Farms, Inc. (NASDAQ:VITL) said it expects its revenue to come in at $450 million versus the consensus of $440.76 million.

At the end of the fourth quarter of 2022, 13 hedge funds tracked by Insider Monkey had stakes in Vital Farms, Inc. (NASDAQ:VITL). The biggest hedge fund stakeholder of Vital Farms, Inc. (NASDAQ:VITL) was Richard Driehaus’ Driehaus Capital which owns a $16 million stake in the company.

7. Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL)

Number of Hedge Fund Holders: 14

Biotech company Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) is one of the low priced growth stocks to buy. During the fourth quarter of 2022, Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL)’s revenue jumped about 150% year over year. Adjusted EPS in the period came in at $0.01, beating estimates by $0.12. Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) swung to a net income of $1.4 million in the quarter from a net loss of about $22.6 million in the prior-year quarter.

At the end of the fourth quarter of 2022, 14 hedge funds reported having stakes in Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL). The total value of these stakes was about $51 million. The most notable hedge fund stakeholder of Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL) was Steven Boyd’s Armistice Capital which had a $25.4 million stake.

6. Autolus Therapeutics plc (NASDAQ:AUTL)

Number of Hedge Fund Holders: 18

UK-based CAR T cell therapy company Autolus Therapeutics plc (NASDAQ:AUTL) posted its full-year results in March. Autolus Therapeutics plc (NASDAQ:AUTL) saw a 173% revenue growth on a year-over-year basis. However, the figure missed analyst consensus by $4.47 million. GAAP EPS in the year came in at -$1.57, beating estimates by $0.06.

Autolus Therapeutics plc (NASDAQ:AUTL) saw a rise in hedge fund sentiment in the fourth quarter of 2022, as 18 hedge funds reported having stakes in Autolus Therapeutics plc (NASDAQ:AUTL) at the end of the period, compared to 12 hedge funds that had stakes in the company at the end of the previous quarter. The biggest hedge fund stakeholder of Autolus Therapeutics plc (NASDAQ:AUTL) is David Kroin’s Deep Track Capital which had a $28.5 million stake.

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