In this piece, we will take a look at the 13 best future stocks for the long-term. For more stocks, head on over to 5 Best Future Stocks for the Long-Term.
Investing these days is a ride not for the faint hearted. Within a couple of years, stocks that were once thought to be immune to the usual market downturns have dropped by multiple percentage points only to rise again and then drop. At the heart of all this roller coaster of a ride is macroeconomic turmoil that refuses to go away ever since the coronavirus pandemic wreaked global havoc. Since then, the stock market has risen and fallen – taking its cues from the broader macroeconomic sentiment.
At the heart of the turmoil, particularly one last year is the rapid increase in interest rates. As the Federal Reserve’s primary policy tool, interest rate hikes are designed to cool down the economy and reduce inflation. Naturally, this cooling down does not bode well for the stock market since it also requires firms to slow down their growth and reduce revenues.
So, as the market rises and falls and analysts worry about a potential recession later this year, what does the potential investor do? Well, to determine this, we first need to understand what central bank officials believe the future holds for the economy. Luckily for us, several officials of the Federal Reserve have made statements sharing their opinions of what the future holds. For instance, the Fed Chair Jerome Powell spoke at Thomas Laubach Research Conference in May 2023 where he outlined:
. . Allan Greenespan famously said that pervasive uncertainty was the defining characteristic of the policy landscape. It’s worth remembering that he made that comment during what we now think of as the Great Moderation. So that statement has never been more apt than it is today. If you look back at the pandemic, the global shutdown, the historically forceful response and the reopening all that had no modern precedent. So it is been a time of historically elevated uncertainty and of unexpected outcomes. No advanced economy had ever faced a shutdown and reopening, and now, all them would face it at the same time. So no matter what happened, the outcome was going to be unprecedented.
So this level of uncertainty posed real challenges for policy and policy communications. On the one hand, we had to be nimble to be able to respond to the evolving situation. On the other hand, we wanted to be as clear as possible about what we’re doing lest we add to uncertainty. So I would say, policy certainly has been nimble, consistent with what within our expectations the data did actually show declining inflation through September of 2021. But then, turned decisively again set expectations thereafter. And we, in response, we accelerated our policy firming, ultimately as you noted, raising rates by five hundred basis points in just over a year. Over this period we communicated that the object was to reach a stance of policy that is sufficiently restrictive to return inflation to 2% over time. But we also communicated that the level of rates that would ultimately be required was highly uncertain.
Now until very recently, it’s been clear that further policy firming would be required as policy has become more restrictive, the risks of doing too much versus risks of doing too little are becoming more balanced. And our policy is adjusted to reflected that fact. So we haven’t made any decisions about the extent to which additional policy firming will be appropriate, but given how far we’ve come, as I noted we can afford to look at the data and the evolving outlook and make careful assessments.
In short, the Fed Chair is uncertain whether further increasing the interest rates risks doing too much tightening and causing more pain than is actually necessary. On the topic of a potential recession, while numerous analysts and pundits believe that such an outcome is unavoidable, Governor Philip N. Jefferson believes that we might be able to avoid such a scenario. Speaking at the National Insurance Forum, he shared:
Despite heightened uncertainty, due to banking-sector stress, geopolitical instability, and the aftermath of the pandemic, I expect the economy to grow in the second quarter. The pace of growth, however, will be slower than what we observed in the first quarter, when real GDP increased at an annual rate of 1.1 percent. My expectation is based mainly on data that showed weakening spending in recent months, and other data that imply moderating spending, including a sizable decline in April in consumer sentiment, as measured by the initial estimate of the University of Michigan Surveys of Consumers. While my base case forecast for the U.S. economy is not a recession, I expect spending and GDP growth to remain quite slow over the rest of 2023, due to continued tight financial conditions, low consumer sentiment, and a decline in household savings that had built up after the onset of the pandemic. Furthermore, I acknowledge that there are downside risks, among them the possibility that the degree of bank lending restraint and uncertainty could weigh on economic activity more than I expect.
Considering this economic sentiment, it would appear that investing in the long term i.e. simply buying stocks and then forgetting about them for a couple of years would be the best case scenario. Well, one metric to sift such stocks is following what analysts are projecting and that’s what we’ve done today with some of the top picks being Sea Limited (NYSE:SE), Alibaba Group Holding Limited (NYSE:BABA), and PDD Holdings Inc. (NASDAQ:PDD).
Photo by Annie Spratt on Unsplash
Our Methodology
To make our list of the best stocks for the long term, we made a list of forty stocks with significant upside in analyst price target recommendations and a Buy rating. Then, the number of hedge fund investors in them was determined through Insider Monkey’s survey of 943 funds for the first quarter of this year. The stocks were ranked accordingly, and the top thirteen stocks were chosen.
13 Best Future Stocks for the Long-Term
13. Keros Therapeutics, Inc. (NASDAQ:KROS)
Number of Hedge Fund Investors In Q1 2023: 28
Keros Therapeutics, Inc. (NASDAQ:KROS) is a biotechnology company headquartered in Lexington, Massachusetts. It develops treatments for heart and liver diseases.
By the end of Q1 2023, 28 of the 943 hedge funds part of Insider Monkey’s database had held a stake in Keros Therapeutics, Inc. (NASDAQ:KROS). Out of these, the firm’s largest investor is Samuel Isaly’s OrbiMed Advisors with a $71 million investment.
Along with Alibaba Group Holding Limited (NYSE:BABA), Sea Limited (NYSE:SE), and PDD Holdings Inc. (NASDAQ:PDD), Keros Therapeutics, Inc. (NASDAQ:KROS) is a great stock with potential share price upside.
12. Intellia Therapeutics, Inc. (NASDAQ:NTLA)
Number of Hedge Fund Investors In Q1 2023: 29
Intellia Therapeutics, Inc. (NASDAQ:NTLA) is another biotechnology company. It develops drugs for serious diseases such as hepatitis and leukemia.
29 of the 943 hedge funds profiled by Insider Monkey for their March quarter of 2023 shareholdings had bought Intellia Therapeutics, Inc. (NASDAQ:NTLA)’s shares. The firm’s largest investor is Catherine D. Wood’s ARK Investment Management with a $366 million investment.
11. Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE)
Number of Hedge Fund Investors In Q1 2023: 29
Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) is a California based biotechnology company that focuses on developing products for genetic disorders.
By the end of 2023’s first quarter, 29 of the 943 hedge funds part of Insider Monkey’s database had invested in the firm. Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE)’s largest hedge fund investor is David Witzke and Michael Gregory’s Avidity Partners Management which owns 2.1 million shares that are worth $85 million.
10. RB Global, Inc. (NYSE:RBA)
Number of Hedge Fund Investors In Q1 2023: 36
RB Global, Inc. (NYSE:RBA) is a business services provider based in Westchester, Illinois. It operates an auction platform and provides other products.
Insider Monkey sifted through 943 hedge fund portfolios for this year’s first quarter and discovered that 36 had owned RB Global, Inc. (NYSE:RBA)’s shares. Out of these, the largest investor is Christian Leone’s Luxor Capital Group with a $216 million stake.
9. Jazz Pharmaceuticals plc (NASDAQ:JAZZ)
Number of Hedge Fund Investors In Q1 2023: 40
Jazz Pharmaceuticals plc (NASDAQ:JAZZ) develops treatments for a variety of disorders and diseases such as daytime sleepiness and lung cancer.
40 of the 943 hedge funds profiled by Insider Monkey had bought and owned the company’s shares as of March 2023. Jazz Pharmaceuticals plc (NASDAQ:JAZZ)’s largest shareholder in our database is Bernard Horn’s Polaris Capital Management with a $191 million investment.
8. Moderna, Inc. (NASDAQ:MRNA)
Number of Hedge Fund Investors In Q1 2023: 40
Moderna, Inc. (NASDAQ:MRNA) is perhaps one of the most consequential firms of our age by having led the development of coronavirus vaccines.
Insider Monkey’s first quarter of 2023 survey of 943 hedge funds revealed that 40 had invested in Moderna, Inc. (NASDAQ:MRNA). Its largest investor is Philippe Laffont’s Coatue Management with a $1 billion stake.
7. Arch Resources, Inc. (NYSE:ARCH)
Number of Hedge Fund Investors In Q1 2023: 42
Arch Resources, Inc. (NYSE:ARCH) is a coal company based in St. Louis, Missouri. It is among a handful of such firms that have gained traction in the aftermath of the Russian invasion of Ukraine’s disruption of the global energy market.
As of March 2023, 42 hedge funds of the 943 in our database had held a stake in Arch Resources, Inc. (NYSE:ARCH).
6. Chart Industries, Inc. (NYSE:GTLS)
Number of Hedge Fund Investors In Q1 2023: 43
Chart Industries, Inc. (NYSE:GTLS) is an industrial equipment manufacturer that designs and sells specialized products capable of handling super cold fluids and gasses.
By the end of Q1 2023, 43 of the 943 hedge funds profiled by Insider Monkey had bought the firm’s shares. Out of these, the largest investor is Ken Fisher’s Fisher Asset Management with a $88 million investment.
Sea Limited (NYSE:SE), Chart Industries, Inc. (NYSE:GTLS), Alibaba Group Holding Limited (NYSE:BABA), and PDD Holdings Inc. (NASDAQ:PDD) are some great stocks finding favorable long term price upside.
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Disclosure: None. 13 Best Future Stocks for the Long-Term is posted on Insider Monkey.
