14 Best Beaten Down Stocks To Buy Right Now

Published on February 25, 2024 at 7:04 am by Ramish Cheema in Hedge Funds, News

In this piece, we will take a look at the 14 best beaten down stocks to buy right now. If you want to skip our coverage of the latest events in the stock market, then you can take a look at the 5 Best Beaten Down Stocks To Buy Right Now.

The stock market of 2024 is vastly different from what investors were used to at the onset of the coronavirus pandemic and in its immediate aftermath. Before the pandemic, global stocks and the Chinese economy were performing quite well and there was a growing narrative that perhaps America’s days as a global economy might be coming to an end, with up and comers the likes of China all ready to challenge U.S. dominance. Similarly, the stock market was used to low interest rates, and as the coronavirus stimulus packages and the monetary policy of that time showed, there was nowhere but up for stocks to go.

Now, the environment is different. Not only have the major European economies of the U.K. and Germany entered into a recession, but it seems like the American economy still has a lot of juice left when it comes to leading the world. This is because Chinese economic ails simply refuse to go away, and the start of 2024 has also seen billions of dollars flow out of the country’s equity markets as the prospects of a robust economic recovery appear to dim down.

However, even though the American economy has been an exception for the last year or so, this doesn’t mean that the future is clear. The start of the year saw stock market investors deal with the same set of challenges that they had become accustomed to in 2023. The two key stock market themes in 2024 are interest rates and artificial intelligence, and so far, they’ve turned out to be bearish and bullish indicators, respectively. While AI stocks such as NVIDIA Corporation (NASDAQ:NVDA) have already posted double digit percentage returns year to date, indexes such as the S&P 500 have pared back from their new all time records as inflation continues to be stubborn and the first rate cut dates from the Federal Reserve are still unclear.

On the inflationary side, the latest data set to dent investor hopes for rapid rate cuts is the producer price index (PPI). This data set measures ‘inflation out of the gate’ i.e., the product prices as they leave factories and make their way to retailers. Naturally, it is a leading inflation indicator and higher PPI readings can hint at higher consumer prices down the road. For January 2024, the PPI rose by 0.9% annually and 0.3% monthly, which ended up overshooting economist estimates. Naturally, the markets weren’t impressed, and as the data made rounds, major indexes registered significant drops, led by the tech heavy NASDAQ index that lost 82 basis points.

Yet, an 82 basis point drop is still rather small when we consider some beaten down stocks that have marked significant drops. Two such beaten down stocks are the shares of the semiconductor firm Super Micro Computer, Inc. (NASDAQ:SMCI) and the ride sharing firm Lyft, Inc. (NASDAQ:LYFT). Starting from the former, Super Micro’s shares had posted stunning triple digit percentage gains of 250% year to date as of February 15th, 2024. Then in the following days, they have dropped by 20% so far, making the stock quite an interesting case study for breakout and beaten down stocks. The Super Micro breakout took place as investors determined that it had successfully established itself as a key partner to NVIDIA and others. The beating took place after Wells Fargo & Company (NYSE:WFC) warned that while the firm has significant AI upside, this has already been priced into the shares.

What about Lyft? Well, its shares soared by 57% after the latest earnings release but soon reversed the trend as management shared that the margin expansion estimate for 2024 will be 50 basis points instead of the 500 basis points that the official release had stated. Margin expansion means that Lyft earns more profit per dollar unit of sales, and naturally, the stock fell after the correction.

So, if you’re wondering about the best beaten down stocks to buy, we made such a list and the top names are Transocean Ltd. (NYSE:RIG), Twilio Inc. (NYSE:TWLO), and Biogen Inc. (NASDAQ:BIIB).

A close-up of a laptop monitor with stock market prices scrolling up and down.

Our Methodology

To make our list of the best beaten down stocks, we first made a list of all stocks that have set a new 52 week low and have a market capitalization greater than $300 million. Then, they were ranked with their year to date share price performance, and the 40 stocks with the most percentage drops were chosen. Finally, this list of beaten down stocks was re-ranked by the number of hedge funds that had bought the shares in Q4 2023, and the top stocks were chosen.

For these best beaten down stocks, we used hedge fund sentiment. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.

Best Beaten Down Stocks To Buy Right Now

14. Forward Air Corporation (NASDAQ:FWRD)

Number of Hedge Fund Investors In Q4 2023: 27

52-Week Range: $39.16 – $121.38

Current Share Price: $39.27

Forward Air Corporation (NASDAQ:FWRD) is an American freight and logistics company headquartered in Tennessee. 2024 is off to a turbulent start for the firm, as a slew of leadership changes has affected the very top and led to the appointment of a new CEO as well.

By the end of December 2023, 27 out of the 933 hedge funds part of Insider Monkey’s database had held a stake in Forward Air Corporation (NASDAQ:FWRD). Israel Englander’s Millennium Management was the firm’s biggest hedge fund investor since it owned $28.8 million worth of shares.

Forward Air Corporation (NASDAQ:FWRD) joins Twilio Inc. (NYSE:TWLO), Transocean Ltd. (NYSE:RIG), and Biogen Inc. (NASDAQ:BIIB) in our list of the best beaten down stocks.

13. Telephone and Data Systems, Inc. (NYSE:TDS)

Number of Hedge Fund Investors In Q4 2023: 28

52-Week Range: $6.44 – $21.75

Current Share Price: $14.04

Telephone and Data Systems, Inc. (NYSE:TDS) is an American telecommunications company that serves the needs business, regular people, and other customers. The shares are rated Buy on average, but earnings performance has been poor with EPS misses in three out of the four latest quarters.

Insider Monkey’s Q4 2023 survey of 933 hedge funds revealed that 28 were the firm’s shareholders. Telephone and Data Systems, Inc. (NYSE:TDS)’s largest stakeholder in our database is Dan Loeb’s Third Point due to its $39.2 million stake.

12. Pacific Biosciences of California, Inc. (NASDAQ:PACB)

Number of Hedge Fund Investors In Q4 2023: 28

52-Week Range: $5.68 – $14.55

Current Share Price: $5.74

Pacific Biosciences of California, Inc. (NASDAQ:PACB) is a backend medical company that provides researchers and others with equipment and products used in operations such as gene sequencing. February 2024 has been a busy month for the firm, as not only did it announce a 113% annual revenue growth during the fourth quarter, but Pacific Biosciences of California, Inc. (NASDAQ:PACB) also announced a new line of products.

By the end of last year’s fourth quarter, 28 out of the 933 hedge funds profiled by Insider Monkey had bought and owned Pacific Biosciences of California, Inc. (NASDAQ:PACB)’s shares. Catherine D. Wood’s ARK Investment Management was the biggest investor due to its $338 million investment.

11. Yelp Inc. (NYSE:YELP)

Number of Hedge Fund Investors In Q4 2023: 29

52-Week Range: $26.53 – $48.99

Current Share Price: $38.02

Yelp Inc. (NYSE:YELP) is a popular American company that allows small businesses and their potential customers to connect with each other online. Its fourth quarter results came with a disappointment for analysts, as while they had projected Yelp Inc. (NYSE:YELP)’s full year operating income estimate to sit at $341 million, the high end of the actual guidance was lower.

Insider Monkey scoured through 933 hedge fund holdings for their December quarter of 2023 shareholdings and discovered that 29 had invested in the firm. The largest Yelp Inc. (NYSE:YELP) hedge fund shareholder is Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital as it owns a $64 million stake.

10. PENN Entertainment, Inc. (NASDAQ:PENN)

Number of Hedge Fund Investors In Q4 2023: 31

52-Week Range: $18.35 – $32.08

Current Share Price: $18.60

PENN Entertainment, Inc. (NASDAQ:PENN) is an American casino and gaming company headquartered in Pennsylvania. Its fourth quarter earnings report was a disappointing set of results that saw PENN Entertainment, Inc. (NASDAQ:PENN) not only miss analyst Q4 revenue estimates of $1.53 billion by posting $1.40 billion but also post a 12% annual drop in the segment.

During the same time period, out of the 933 hedge funds part of Insider Monkey’s database, 31 had held a stake in PENN Entertainment, Inc. (NASDAQ:PENN). Parag Vora’s HG Vora Capital Management was the firm’s biggest investor since it owned 14.5 million shares that are worth $377 million.

9. Roku, Inc. (NASDAQ:ROKU)

Number of Hedge Fund Investors In Q4 2023: 32

52-Week Range: $51.62 – $108.84

Current Share Price: $72

Roku, Inc. (NASDAQ:ROKU) is a consumer technology company that sells entertainment related hardware and software products. The firm has struggled on the earnings front by having missed analyst EPS estimates in three out of its four latest quarters.

Insider Monkey took a look at 933 hedge fund portfolios for last year’s fourth quarter and found that 32 were the firm’s shareholders. Roku, Inc. (NASDAQ:ROKU)’s largest stakeholder is Catherine D. Wood’s ARK Investment Management as it owns $873 million worth of shares.

8. QuidelOrtho Corporation (NASDAQ:QDEL)

Number of Hedge Fund Investors In Q4 2023: 32

52-Week Range: $41.75 – $98.67

Current Share Price: $41.76

QuidelOrtho Corporation (NASDAQ:QDEL) is a diversified medical raw materials company whose products assist laboratories in diagnosing diseases. The shares are rated Buy on average, and the average analyst share price target is $80.33 for a significant upside over the current share price.

As of December 2023 end, 32 out of the 933 hedge funds part of Insider Monkey’s database had bought and owned QuidelOrtho Corporation (NASDAQ:QDEL)’s shares. Mathew Strobeck’s Birchview Capital was the biggest investor courtesy of its $4.8 million stake.

7. Iridium Communications Inc. (NASDAQ:IRDM)

Number of Hedge Fund Investors In Q4 2023: 33

52-Week Range: $29.94 – $68.34

Current Share Price: $30.14

Iridium Communications Inc. (NASDAQ:IRDM) is a telecommunications company that provides internet and other coverage through a satellite network. Its investors were dealt with bad news in February 2024 when BWS Financial downgraded the stock to Hold from Buy and revised the share price target to $30 as it worried about the competitive landscape.

By the end of last year’s fourth quarter, 33 out of the 933 hedge funds covered by Insider Monkey’s research had held a stake in the firm. The largest Iridium Communications Inc. (NASDAQ:IRDM) hedge fund shareholder is Kevin Kuebler and Ming Lam’s Silver Heights Capital Management due to its $109 million investment.

6. SBA Communications Corporation (NASDAQ:SBAC)

Number of Hedge Fund Investors In Q4 2023: 41

52-Week Range: $185.23 – $279.07

Current Share Price: $206.80

SBA Communications Corporation (NASDAQ:SBAC) is an American real estate investment trust that deals in the telecommunications sector. Amidst a global economic turmoil that has seen businesses struggle, SBA Communications Corporation (NASDAQ:SBAC) is interested in expanding its global portfolio by buying assets in Ireland.

41 out of the 933 hedge funds part of Insider Monkey’s Q4 2023 database were SBA Communications Corporation (NASDAQ:SBAC)’s shareholders. Out of these, the biggest investor is Ken Griffin’s Citadel Investment Group through its $673 million stake.

Transocean Ltd. (NYSE:RIG), SBA Communications Corporation (NASDAQ:SBAC), Twilio Inc. (NYSE:TWLO), and Biogen Inc. (NASDAQ:BIIB) are some top beaten down stocks that hedge funds are buying.

Click here to continue reading and check out 5 Best Beaten Down Stocks To Buy Right Now.

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Published on October 30, 2024 at by Inan Dogan, PhD

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A New Dawn is Coming to U.S. Stocks

Published on November 16, 2024 at by Insider Monkey Staff

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Click to continue reading…

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