In this article, we will list the 15 worst 52-week low stocks to buy now according to short sellers.
The U.S. Federal Reserve conducting a 50 basis point interest rate cut was the catalyst that stocks needed to bounce back from a period of stagnation. After weeks and months of uncertainty about what the Fed would do, certainty is slowly creeping into the market, helping bolster investor sentiments.
With the S&P 500 back to record highs, it’s the Nasdaq 100 that appears to be making the most significant moves, having gained more than 3% in the aftermath of the 50 basis point interest rate cut. The spike in the tech-heavy U.S. index is a clear indicator that tech stocks are well poised to edge higher after weeks of stagnation.
The interest rate cut is expected to positively impact short-term bank borrowing costs, making it easy for people and businesses to access cheap capital to fuel economic activity that has been slowing in recent months. Additionally, it should positively impact various consumer products like mortgages, auto loans, and credit cards.
While there were concerns that the U.S. economy was slowing due to disappointing employment data and a slowdown in the manufacturing sector, Fed Chair Jerome Powell reiterated that the 50 basis point cut was all about ‘recalibrating’ the economy.
Initially, there were concerns that the FED coming through with a 50 basis point would fuel fears about the health of the U.S. economy and consequently rattle stocks. However, that was not the case as stocks rallied, signaling that investors were optimistic about the economy and long-term outlook in the market.
Tom Porcelli, top U.S. economist at PGIM Fixed Income Policy, thinks the Fed policy was set up to handle much more inflation. Now that inflation is getting close to the target, the Fed can start to ease off on the tight money they’ve been applying. Consequently, the aggressive interest rate cut is not because we’re heading into a recession but because we want to keep the economic growth going.
While the focus will be on stocks that have been edging higher for the year, the focus is slowly shifting to stocks that have bottomed and that market participants are bearish on. Stocks that have been battered to 52-week lows are increasingly turning out to be bargains, especially on the monetary policy improving after months of uncertainty. Nevertheless, it is unclear whether stocks with high short interest rates will bounce back after coming under immense pressure over the past nine months.
With the Fed cutting interest rates with a bang, CNBC commentator and Fast Money host Jim Cramer believes investors should start paying attention to stocks well poised to benefit from a low interest rate environment. Some stocks to consider are companies providing products and services that depend on consumers’ purchasing power.
With that, let’s take a look at the worst 52-week low stocks to buy now, according to short sellers.
Our Methodology
We used the Finviz screener to find stocks that were trading near their 52-week lows and that had high short interest (at least 5%). We then picked the stocks with the highest short interest and ranked them in ascending order of this metric. We have also added the hedge fund sentiment for these stocks.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
15 Worst 52-Week Low Stocks to Buy Now According to Short Sellers
15. Verrica Pharmaceuticals Inc. (NASDAQ:VRCA)
52 Week Range: $1.77 – $11.41
Current Share Price: $1.94
Short % of Shares Outstanding: 6.99%
Number of Hedge Funds holding stakes as of Q2 2024: 5
Verrica Pharmaceuticals Inc. (NASDAQ:VRCA) is a clinical-stage dermatology therapeutics company that develops medications for the treatment of skin diseases. Its product pipeline comprises YCANTH (VP-102) for treating common warts and has completed a phase II clinical trial to treat external genital warts.
It remains one of the worst 52-week low stocks to buy now, according to short sellers, owing to growing concerns about the company’s ability to turn a profit. In its recent quarter, it posted a loss of $67 million, taking its trailing 12-month loss to $87 million.
The soaring net loss has been the catalyst behind Verrica Pharmaceuticals Inc. (NASDAQ:VRCA) ‘s soaring short interest, which stands at 6.99%. Likewise, the gross profit margin has been negative, at -60.48%, suggesting profit challenges.
Nevertheless, the company is showing signs of underlying growth in product revenue for its flagship product, YACNTH, improving to $4.9 million. Total revenues in the second quarter totaled $5.2 million. Nevertheless, analysts at RBC Capital reduced their price target on the stock to $13 from $14, citing weakness on the launch of the company’s flagship YCANTH for molluscum contagiosum.
In the second quarter of 2024, 5 hedge funds in the database of Insider Monkey held stakes worth $84.51 million in Verrica Pharmaceuticals Inc. (NASDAQ:VRCA), up from 2 in the preceding quarter worth $65.71 million.
14. Five9, Inc. (NASDAQ:FIVN)
52 Week Range: $26.60 – $92.40
Current Share Price: $27.77
Short % of Shares Outstanding: 7.64%
Number of Hedge Fund Investors in Q2 2024: 34
Five9, Inc. (NASDAQ:FIVN) is a technology company that provides intelligent cloud software for contact centers. It offers a cloud platform that delivers a suite of applications that enables the breadth of contact center-related customer service, sales, and marketing functions.
Five9, Inc. (NASDAQ:FIVN)’s core business has been under pressure in recent years as the growth in e-commerce translates to fewer in-person visits in stores, therefore affecting demand for contact-center software solutions. Fears about competition, doubts regarding the lasting effects of artificial intelligence on the company, and the overall decline in economic conditions have all darkened the stock’s outlook.
The consumer division, which is among the company’s biggest, has been particularly hard-hit lately as fewer clients are hiring call center agents, putting pressure on Five9’s model that relies on seat-based revenue. Consequently, Five9, Inc. (NASDAQ:FIVN)’s revenue growth slowed to 13% compared to the previous year, a drop from 28% and 17% in 2022 and 2023, respectively.
Additionally, the company’s management has forecasted a 16% revenue growth for 2024, which some view as overly optimistic given the poor start to the year. These declining sales figures have also negatively affected the company’s quarterly stock performance.
The deteriorating macroeconomics has taken a significant toll on the stock’s sentiments in the market, resulting in it dropping near its 52-week lows. Nevertheless, the company’s growth metrics have started showing signs of improvement. For instance, revenue grew by 13% in the second quarter to $252.1 million, with net loss shrinking to $12.8 million from $21.7 million a year ago.
At the end of Q2 2024, 34 hedge funds were eager on Five9, Inc. (NASDAQ:FIVN), compared to 38 in the previous quarter. Of those, Alyeska Investment Group was the largest shareholder in the company and disclosed a position worth $94.22 million.
In its Q2 2023 investor letter, Brown Capital Management Mid Company Fund provided the following insight regarding Five9, Inc. (NASDAQ:FIVN):
“Five9, Inc. (NASDAQ:FIVN) is a leader in cloud-based contact-center software, which serves as the routing engine to connect callers to agents. With the growth of e-commerce, consumers are making fewer in-person visits to stores but contacting companies more frequently, driving the need for world-class contact-center software solutions like Five9’s. It has been a tough couple of years for Five9’s stock and this quarter provided no relief. Competitive concerns, questions about AI’s long-term impact on the business and deteriorating macroeconomic conditions have all cast clouds over the company’s stock. Five9’s consumer segment, one of its largest divisions, has really struggled of late as clients hire fewer call-center agents, pressuring Five9’s seat-based revenue model. Total revenue growth decelerated to 13% year-over-year in the most recent quarter, down from 28% and 17% in 2022 and 2023, respectively. Moreover, management guided to 16% for the full year 2024, which some consider optimistic given the weak start to the year. These worsening sales trends further weighed on shares during the quarter.
Looking through the current industry doldrums, we see a bright future for Five9. The company inked its largest deal ever during the quarter, which will generate more than $50 million in annual revenue once fully rolled out. We believe this is an important signal of Five9’s long-term potential. The company is attacking a $60 billion market opportunity, is winning new business at industry-leading rates and is gaining share from legacy incumbents stuck with antiquated technology. We continue to assess the potential threat of AI, but so far it has provided an uplift to company results. The company’s AI product is very popular with large enterprises as it assists agents with customer interactions and can sometimes be used to fully automate interactions. Far from shrinking the number of industry seats, as some fear, management said revenue per seat doubles when customers adopt their AI applications. We expect sales growth to pick up markedly in the coming years, which should result in much stronger stock performance.”
13. Gogo Inc. (NASDAQ:GOGO)
52 Week Range: $6.72 – $12.57
Current Share Price: $6.88
Short % of Shares Outstanding: 8.77%
Number of Hedge Funds holding stakes as of Q2 2024: 28
Gogo Inc. (NASDAQ:GOGO) is a communication services company that provides broadband connectivity services to the aviation industry. Its product platform includes networks, antennas, and airborne equipment and software. It offers in-flight systems, services, aviation partner support, and engineering. It also offers voice and data, in-flight entertainment, and other services.
The stock has been under pressure for most of the year, tanking to 52-week lows. The underperformance stems from investors reacting to reports that the company faces an uncertain future after United Airlines inked a deal with Starlink.
The Starlink deal has the potential to negatively affect Gogo Inc. (NASDAQ:GOGO)’s prospects as a leading provider of inflight connectivity and entertainment. Additionally, the company is facing challenges with the direct connection of satellites to cellular technologies.
The challenges were evident as the company delivered weak second-quarter results that fuelled a sell-off on short interest, rising to 8.77%. Revenue in the quarter was down 1% to $102.1 million as Net income plummeted 99% yearly to $0.8 million. Disappointing financial results are one of the reasons Gogo remains one of the worst 52-week low stocks to buy now, according to short sellers.
Amid the disappointing financial results, Gogo Inc. (NASDAQ:GOGO) has inked a long-term deal with Airshare, a quickly growing private jet service, to provide cutting-edge in-flight internet services. This collaboration extends from a prior connection between the firms, intending to enhance the rest of Airshare’s aircraft within the next year.
Additionally, it has confirmed the setup of its Gogo Galileo HDX system on a Bombardier (OTC: BDRBF) Challenger 300, signifying a major milestone in the commercial introduction of its new Low-Earth-Orbit high-speed internet service.
Even though Sage experienced an impressive increase in revenue by 837.55% in the past year, ending in Q2 2024, there are worries about its financial stability. This is shown by a negative gross profit margin of -213.59%, which means expenses are much higher than the income generated.
During June 2024, 28 out of the 912 hedge funds covered by Insider Monkey’s research had invested in the firm. Gogo Inc. (NASDAQ:GOGO)’s largest hedge fund shareholder is Chet Kapoor’s Tenzing Global Investors as it owns $20.56 million worth of shares.
12. RAPT Therapeutics, Inc. (NASDAQ:RAPT)
52 Week Range: $1.77 – $27.35
Current Share Price: $1.93
Short % of Shares Outstanding: 9.48%
Number of Hedge Funds holding stakes as of Q2 2024: 23
RAPT Therapeutics, Inc. (NASDAQ:RAPT) is a clinical-stage immunology-based biopharmaceutical company that develops and commercializes oral small-molecule therapies for patients with unmet needs in oncology and inflammatory diseases. Its lead oncology drug candidate is tivumecirnon (FLX475 is in the Phase 1/2 clinical trial to investigate in patients with advanced cancer
Shares of RAPT Therapeutics, Inc. (NASDAQ:RAPT) have fallen following a halt of two of its clinical studies on an experimental treatment for inflammation following reports of liver failure in a participant. The U.S. Food and Drug Administration announcing a clinical hold on two studies of zelnecirnon, one focusing on atopic dermatitis and the other on asthma, has dealt a significant blow to the stock’s sentiments in the market.
The FDA halt could explain the 9.48% short interest rate on the stock as investors remain skeptical about the company’s future amid the setbacks in clinical trials. In addition to the clinical trials setback, Rapt Therapeutics is considered one of the worst 52-week low stocks to buy now, according to short sellers, as it remains unprofitable.
RAPT Therapeutics, Inc. (NASDAQ:RAPT)’s net loss in the second quarter totaled $0.71 a share, with the company on course to deliver a $2.70 share loss for the entire year. Given that the company faces uncertainty due to a clinical hold on Zelneciron, an essential asset in its pipeline, it will likely remain under pressure.
At the end of the second quarter of 2024, 23 hedge funds in the database of Insider Monkey held stakes worth $26.85 million in RAPT Therapeutics, Inc. (NASDAQ:RAPT), down from 26 in the previous quarter worth $68.32 million. Among the hedge funds being tracked by Insider Monkey, Kingdon Capital is a leading shareholder in RAPT Therapeutics, Inc. (NASDAQ:RAPT), with 1.73 million shares worth more than $5.26 million.
11. Qualys, Inc. (NASDAQ:QLYS)
52 Week Range: $119.32 – $206.35
Current Share Price: $123.32
Short % of Shares Outstanding: 10.15%
Number of Hedge Funds holding stakes as of Q2 2024: 31
Qualys, Inc. (NASDAQ:QLYS) is a technology company that provides a cloud-based platform for delivering information technology security and compliance solutions. It is best known as a cybersecurity company owing to its cloud-based security and compliance solutions.
While Qualys, Inc. (NASDAQ:QLYS) is trading close to its 52-week lows, its underperformance can be attributed to, among other things, highly volatile market conditions amid macroeconomic uncertainties. Growing fears over the Federal Reserve monetary policy trajectory and looming fears of U.S. recession have rattled the company’s sentiments.
Nevertheless, the sluggish sales growth has affirmed why Qualys, Inc. (NASDAQ:QLYS) is one of the worst 52-week low stocks to buy now, according to short sellers. The company’s revenue growth rate slowed down to a single-digit percentage range in the second quarter of 2024, marking a significant drop from the double-digit growth it has consistently achieved in each quarter since 2013. Revenues came in at $148.7 million, up 8% year over year.
Businesses putting off their big I.T. investment plans due to a weakening worldwide economy and continuing macroeconomic uncertainties have once again cast doubts on the company’s long-term prospects.
Some cybersecurity companies have noted that organizations must put off or take longer to finalize agreements or are even scaling back on agreements in the current uncertain economic climate. Shifts in consumer spending habits are also impacting Qualys, Inc. (NASDAQ:QLYS) earnings growth.
Concerns about the company’s growth metrics have been the catalyst behind short interest on outstanding shares soaring to 10.15%. According to Insider Monkey’s second-quarter database, 31 hedge funds were long Qualys, Inc. (NASDAQ:QLYS), compared to 25 funds in the last quarter. Terry Smith’s Fundsmith LLP is the largest stakeholder of the company, with 548,009 shares worth $78.15 million.
Here is what The London Company SMID Cap Strategy said about Qualys, Inc. (NASDAQ:QLYS) in its Q2 2024 investor letter:
“Initiated: Qualys, Inc. (NASDAQ:QLYS) – QLYS provides cybersecurity and compliance solutions, which enable its clients to identify, prioritize, and remediate risks to information technology infrastructures. QLYS also offers solutions through a software-as-a-service model, primarily with renewable annual subscriptions. QLYS should continue to benefit from the long-term secular tailwinds that drive sustainable growth in cybersecurity. QLYS’s products are critical but also low-cost relative to a company’s overall security budget, helping ensure high retention rates and recession resistance. We believe QLYS is among the best managed in the industry. Many past decisions have positioned QLYS ahead of peers in terms of product quality, structurally higher margins, and competitive moat. QLYS generates high operating margins with growing cash flow generation and has a very strong balance sheet. QLYS is also owned in our Small Cap portfolio.”
10. Sage Therapeutics, Inc. (NASDAQ:SAGE)
52 Week Range: $7.19 – $28.26
Current Share Price: $7.90
Short % of Shares Outstanding: 10.18%
Number of Hedge Funds holding stakes as of Q2 2024: 31
Sage Therapeutics, Inc. (NASDAQ:SAGE) is a healthcare company that engages in the development and commercialization of brain health medicines. Its product candidates include ZULRESSO, a CIV injection for the treatment of postpartum depression (PPD) in adults, and ZURZUVAE, a neuroactive steroid.
Shares of Sage Therapeutics, Inc. (NASDAQ:SAGE) have plummeted to 52-week lows after the company suffered a major blow on one of its clinical trials. The company’s candidate drug, SAGE 324, failed to ease involuntary shaking in patients in a mid-stage trial.
The disappointing trial results rattled the investment community that was excited about a potential blockbuster depression treatment. Consequently, short interest on the stock has spiked to 10.18%.
In addition to disappointing clinical trial results, Sage Therapeutics, Inc. (NASDAQ:SAGE) sentiments have also taken a significant hit following disappointing second-quarter results. The company delivered a net loss of $102.9 million as sales for its flagship drug, Zurzuvae, increased 67% but fell short of Wall Street expectations.
31 out of the 912 hedge funds part of Insider Monkey’s Q2 2024 database had bought the firm’s shares. William Leland Edwards’ Palo Alto Investors owned the biggest Sage Therapeutics, Inc. (NASDAQ:SAGE) stake among these, which was worth $10.98 million.
9. New Fortress Energy Inc. (NASDAQ:NFE)
52 Week Range: $9.39 – $40.04
Current Share Price: $9.49
Short% of Shares Outstanding: 10.45%
Number of Hedge Fund Investors in Q2 2024: 20
New Fortress Energy Inc. (NASDAQ:NFE) is a utility company that operates as an integrated power energy infrastructure company that provides energy and development services. Its Terminals and Infrastructure segment engages in natural gas procurement, liquefaction, shipping, and logistics.
Investor sentiments on the stock have taken a significant hit, and it has been plunging to 52-week lows. New Fortress Energy Inc. (NASDAQ:NFE) missing its second-quarter earnings estimates amid delays in starting up a floating LNG export facility in Mexico has hurt its sentiments. In the second quarter, the company delivered a net loss of $88 million or 44 cents a share, which was wider than the expected net loss of 7 cents a share.
The fact that the company posted a 23.8% decline in revenues to $428.01 million from $690 million delivered in the first quarter has also sent jitters in the investment community. New Fortress Energy Inc. (NASDAQ:NFE) is currently rated as one of the worst 52-week low stocks to buy now on management’s warning that the late startup of the LNG facility will negatively impact third-quarter results.
With revenues and earnings expected to remain under pressure heading into year-end, New Fortress Energy Inc. (NASDAQ:NFE) could struggle to bounce back after the implosion to 52-week lows. While trading forward earnings multiple of 188, the stock still rewards investors with a 4.22% dividend yield, which should excite income-focused investors amid the revenue and earnings growth slowdown.
As of the close of Q2 2024, 20 hedge funds in Insider Monkey’s database owned stakes in New Fortress Energy Inc. (NASDAQ:NFE), compared with 18 in the previous quarter. The consolidated value of these investments is over $205.94 million. Michael Novogratz’s Fortress Investment Group is the most significant shareholder of the company, with stakes worth $294.52 million.
8. Grocery Outlet Holding Corp. (NASDAQ:GO)
52 Week Range: $16.06 – $29.98
Current Share Price: $16.29
Short % of Shares Outstanding: 11.15%
Number of Hedge Funds holding stakes as of Q2 2024: 26
Grocery Outlet Holding Corp. (NASDAQ:GO) is a consumer defensive investment play that operates as a retailer of consumables and fresh products. The retailer has lost nearly 50% of its market value over the past 12 months, dropping to 52-week lows.
The underperformance, which has seen Grocery Outlet Holding Corp. (NASDAQ:GO) emerge as one of the worst 52-week low stocks to buy now, according to short sellers, can be attributed to internal challenges. For starters, the company is struggling following a recent system transition while also grappling with rising expenses that are putting pressure on its thin margins.
A deteriorating U.S. economy hurt by high interest rates negatively impacting consumer purchasing power also significantly affected the company’s core business. Consequently, investors have been under pressure, resulting in a high short interest rate of 11.15%.
Nevertheless, Grocery Outlet Holding Corp. (NASDAQ:GO)’s core business shows signs of growth, as shown by the solid second-quarter results. Revenue in the quarter was up 12% year over year to $1.13 billion. The company plans to open up 64 new stores before the end of 2024 and expected net sales to range between $4.3 billion and $4.35 billion. Grocery Outlet’s emphasis on opportunistic purchasing-focused advertising, the growth of its stores, and its online sales efforts also show promise.
During the second quarter, hedge funds reduced their positions in Grocery Outlet Holding Corp. (NASDAQ:GO), with 26 funds holding positions, down from 28 in the previous quarter. 12 West Capital Management retained the spot as the largest stakeholder in the company for the second consecutive quarter after increasing its holdings by 51%.
7. Valaris Limited (NYSE:VAL)
52 Week Range: $53.06 – $84.20
Current Share Price: $55.31
Short% of Shares Outstanding: 12.17%
Number of Hedge Fund Investors in Q2 2024: 39
Valaris Limited (NYSE:VAL) is an energy company that provides offshore drilling services in the Gulf of Mexico. It owns an offshore drilling rig fleet, which includes drill ships, dynamically positioned semi submersible rigs, moored semi submersible rigs, and jack-up rigs.
The broader energy sector has been under pressure after growing concerns about the global economy amid the high interest rates. Growth in the US economy showing signs of slowing down has rattled sentiments in the oil industry.
Worldwide oil demand is slowing down, reflecting challenges in the global economic environment, particularly due to China’s slowing economic growth. Consequently, oil prices plunging from above $80 a barrel to lows of $71 a barrel has only spelled doom for Valaris.
Lower oil prices make it hard for oil producers to increase spending on exploration and drilling activities. Reduced spending essentially translates to reduced demand for the Valaris Limited (NYSE:VAL) drilling rig fleet, making it challenging to enjoy higher revenue and earnings growth rates.
Valaris Limited (NYSE:VAL) delivered solid second-quarter results, with net income increasing to $151 million from $26 million in the first quarter as revenue increased 16% to $610 million from $525 million in the first quarter. Investors have been skeptical about the company’s prospects heading into year-end, with oil prices plunging to lows of $71 a barrel amid the slowing global economy.
39 out of 912 hedge funds tracked by Insider Monkey held stakes in Valaris Limited (NYSE:VAL) as of the end of Q2 2024. William B. Gray’s Orbis Investment Management is the leading shareholder of the company with 5.82 million shares worth $433.39 million.
Here is what Praetorian Capital said about Valaris Limited (NYSE:VAL) in its Q2 2024 investor letter:
“Valaris Limited (NYSE:VAL) has been range bound for over two years now, awaiting the signing of new contracts at current market rates, that will replace expiring contracts that are frequently less than half of current prevailing rates. There have been some questions as to why the company has been slow to sign new contracts. However, I believe that management is trying to trade a slightly reduced price for increased duration of contract tenure, and that’s the reason for a lack of commentary on new contracts. Should the company announce new contracts at anywhere near current market rates, I believe that the shares will respond in a rather dramatic way—especially as Valaris is by far the cheapest of the large drilling companies (based on the enterprise value per rig metric), despite having one of the best fleets and strongest balance sheets. Between our common and warrant position, Valaris was our 2nd largest position at the end of June.”
6. Chegg, Inc. (NYSE:CHGG)
52 Week Range: $1.72 – $11.48
Current Share Price: $1.84
Short % of Shares Outstanding:13.46%
Number of Hedge Funds holding stakes as of Q2 2024: 24
Chegg, Inc. (NYSE:CHGG) is a company that develops learning platforms that help people build essential life and job skills. Subscription services include Chegg Study, which offers personalized step-by-step learning support from A.I., computational engines, and subject matter experts, as well as Tinger Gold
Chegg, Inc. (NYSE:CHGG) was one of the companies that benefited from the COVID-19 pandemic, which forced most people to stay home and resort to online learning services. With normalcy returning and students returning to classes, its services are no longer in high demand, as was the case at the height of the pandemic.
Chegg, Inc. (NYSE:CHGG)’s core business has been under pressure, with the subscriber count of its services dropping to 4.4 million in the second quarter. The decline is attributed to industry pressure and competitive dynamics. Given that most weaknesses appear secular, they might persist as Chegg struggles to make substantial investments in product enhancements due to margin discipline.
The company’s revenue has dropped in nine consecutive quarters, underlying weakness in the core business and weak demand for its services. Its revenue in the second quarter was down by 11% to $163.1 million as subscription revenues dropped 11% to $146.8 million. Consequently, the company ended up posting a net loss of 4616.9 million
Management issuing a subdued outlook for the third quarter affirms why Chegg, Inc. (NYSE:CHGG) could be one of the worst 52-week low stocks to buy now, according to short sellers, given the lack of catalysts to push the stock up after the recent implosion to 52-week lows. Uncertainty over the company’s long-term prospects is why short interest in the stock remains at a high of 13.46%.
According to Insider Monkey’s second-quarter database, 24 hedge funds were bullish on Chegg, Inc. (NYSE:CHGG), the same as in the prior quarter. D E Shaw is a prominent stakeholder of the company, with 4.8 million shares worth $65.11 million.
5. Immunocore Holdings plc (NASDAQ:IMCR)
52 Week Range: $32.37 – $76.98
Current Share Price: $34.21
Short % of Shares Outstanding: 13.76%
Number of Hedge Funds holding stakes as of Q2 2024: 24
Headquartered in Abingdon, the United Kingdom, Immunocore Holdings plc (NASDAQ:IMCR) is a commercial-stage biotechnology company that develops therapies for treating cancer and infectious and autoimmune diseases. Its lead product is KIMMTRAK for the treatment of metastatic melanoma.
The stock is trading near its 52-week lows, underlining underperformance over the past year. The underperformance comes against the backdrop of the company delivering solid financial results. Immunocore Holdings experienced significant growth in its financial results in Q2 and the first half of 2024, mainly due to the success of its oncology drug, KIMMTRAK.
Immunocore Holdings plc (NASDAQ:IMCR) delivered a 34% rise in KIMMTRAK’s net sales, hitting $146 million in the first half of the year and a 7% revenue growth for the second quarter. These recent achievements are mainly credited to the U.S. market.
One of the reasons the stock has underperformed amid the stellar quarterly results is because of uncertainty over its clinical trials. The company is currently undertaking a Phase 2 trial of KIMMTRAK in advanced cutaneous melanoma patients and a Phase 3 trial of PRISM-MEL301.
Immunocore Holdings plc (NASDAQ:IMCR)’s reliance on one product for revenues in a highly competitive landscape where new drugs are increasingly cropping up continues to rattle the stock’s sentiments. It’s ranked as one of the worst 52-week low stocks to buy now, according to short sellers, owing to heightened volatility in the biotech industry where innovation and research breakthroughs are always susceptible to regulatory hurdles. Consequently, the stock has been left exposed to a high short interest rate of 13.76%.
According to Insider Monkey, by the end of Q2 2024, 24 out of 912 tracked hedge funds held stakes in Immunocore Holdings plc (NASDAQ:IMCR). The biggest shareholder is Baker Bros. Advisors, led by Julian and Felix Baker, with shares worth $51.35 million.
4. Navitas Semiconductor Corp (NASDAQ:NVTS)
52 Week Range: $2.2 – $8.4
Current Share Price: $2.4
Short % of Shares Outstanding: 15.21%
Number of Hedge Funds holding stakes as of Q2 2024: 15
Navitas Semiconductor Corp (NASDAQ:NVTS) is a semiconductor company that designs, develops, and markets integrated circuits associated with high-speed silicon system controllers and digital isolators for power conversion and charging. Its product is mostly used in mobile, consumer, data center, solar, electric vehicle, and industrial motor drive.
Navitas Semiconductor Corp (NASDAQ:NVTS) is growing its footprint in the A.I. data centers and electric vehicle sectors, boasting over 200 client projects and a string of design victories. The firm expects to see its initial Gann EV income by the year’s end. Even with a dip in the solar sector, Navitas is moving forward, with over 100 projects underway.
The stock has been under pressure for the better part of the year owing to growing concerns about consumer spending on the company’s core products. Additionally, the company faces stiff competition from Chinese companies amid mixed messages from the auto industry.
In addition, Navitas Semiconductor Corp (NASDAQ:NVTS)’s sentiments on Wall Street have taken a significant hit in the aftermath of management shake-ups. Confirming that current CFO and Treasurer Janet Chou is poised to step down in October is increasingly sending jitters. The company has had to state that the exit of the current CFO is not related to financial statements or disclosures.
While the company delivered a 40% year-over-year increase in revenue in Q2 2024 to $20.5 million attributed to its gallium nitride, it struggled to post a profit. Consequently, it reported an operating net loss of $13.3 million.’
As Navitas tries to navigate its financial health and management transition, short interest in the stock has increased to 15.21%. By the end of June, 15 funds held long positions in Navitas Semiconductor Corp (NASDAQ:NVTS), an increase from 11 in the previous quarter.
3. Archer Aviation Inc. (NYSE:ACHR)
52 Week Range: $3 – $7.01
Current Share Price: $3.05
Short % of Shares Outstanding: 16.18%
Number of Hedge Funds holding stakes as of Q2 2024: 21
Archer Aviation Inc. (NYSE:ACHR) is an industrial company that designs, develops, and operates vertical takeoff of landing aircraft. The firm is also working on creating electric vertical takeoff and landing (eVTOL) planes. This puts the company in a good position to gain a lot from eco-friendly transportation that seeks to address the issue of urban mobility in today’s densely populated large cities.
However, Archer Aviation Inc. (NYSE:ACHR) has underperformed for the better part of 2024, going by its slide to 52-week lows. It is rated as one of the worst 52-week low stocks to buy now, according to short sellers, given its exposure to considerable regulatory risk as its products rely heavily on approval from the Federal Aviation Administration (FAA). Consequently, short interest on the stock has risen to 16.18%.
Amid the pessimism from short sellers, Archer Aviation Inc. (NYSE:ACHR) boasts a strong order backlog of $6 billion. This backlog offers insight into customer trust and demand for its offerings, bolstering Archer Aviation’s prospects. Additionally, the company successfully completed 400 test flights this year and secured a contract for manufacturing with the automotive behemoth Stellantis. In Q2 2024, 21 hedge fund portfolios held Archer Aviation Inc. (NYSE:ACHR), an increase from 20 in the previous quarter.
2. Cerence Inc. (NASDAQ:CRNC)
52 Week Range: $2.34 – $21.66
Current Share Price: $2.68
Short % of Shares Outstanding: 16.56%
Number of Hedge Funds holding stakes as of Q2 2024: 14
Cerence Inc. (NASDAQ:CRNC) is a technology company that provides AI-powered virtual assistants for the mobility/transportation market. It offers edge software components, cloud-connected components, virtual assistant coexistence, and professional services. It also provides conversational artificial intelligence-based solutions
The leader in AI-driven automotive assistants has imploded to a 52-week low amid a challenging market environment. Slowing momentum in the automotive industry and stiff competition in the automotive Generative AI (GenAI) market, which affected CRNC’s top-line growth, are some of the reasons short sellers have continued piling pressure on the stock.
Consequently, short interest on the stock has risen to 16.56%, a situation fuelled by Cerence Inc. (NASDAQ:CRNC) management lowering its fiscal revenue and EBITDA expectations. The company’s withdrawal of its multi-year forecast through 2027 has also raised doubts about its long-term prospects.
Cerence Inc. (NASDAQ:CRNC)’s guidance shows a decrease of about 11% to $40 million and an expected EBITDA of $65 million, a significant drop compared to the earlier forecasted $102 million. The cut has since resulted in the stock imploding to its 52-week lows. Concerns about future growth are one of the reasons Cerence remains one of the worst 52-week low stocks to buy now, according to short-sellers.
Nevertheless, Cerence Inc. (NASDAQ:CRNC) finds itself well-positioned to take advantage of progress in GenAI, an expanding customer base, and a robust network of partners. Its partnership with Skoda, a recognized brand under Volkswagen, stands out as the agreement is focused on improving the driving experience by merging Cerence Chat Pro with Skoda’s in-vehicle voice assistant, Laura.
As of the end of the second quarter, 14 hedge funds in Insider Monkey’s database of 912 funds held stakes in Cerence Inc. (NASDAQ:CRNC), compared to 11 hedge funds in the first quarter.
1. Coherus BioSciences, Inc. (NASDAQ:CHRS)
52 Week Range: $1.01 – $4.47
Current Share Price: $1.13
Short % of Shares Outstanding: 21.83%
Number of Hedge Funds holding stakes as of Q2 2024: 16
Coherus BioSciences, Inc. (NASDAQ:CHRS) is a biopharmaceutical company that develops and commercializes cancer treatments. The company’s woes started early in the year after it announced a deal to divest one of its units, Sandoz, for $170 million. With the ale, the company secured much-needed financing for reducing debt and interest costs
Nevertheless, the sale also translated to losing a key revenue stream and long-term growth driver. The company had generated $40 million in sales from Cimeril products under the Sandoz unit, representing 40% growth in the third quarter of last year. The sale all but affirmed the financial challenges that Coherus faces, which has been one of the catalysts behind the high short interest of 21.83%
Coherus BioSciences, Inc. (NASDAQ:CHRS) delivered mixed second-quarter results, with revenues increasing to $65 million from $58.7 million a year ago. The company is still struggling to post a profit, having generated a net loss of 16.4 million, a significant improvement from a net loss of $32.8 million a year ago.
Analysts at UBS have downgraded the stock, citing concerns about Coherus BioSciences, Inc. (NASDAQ:CHRS)’s growth metrics. Of great concern is the fact that the company is struggling to monetize its core products, Yusimry and Cimerli. For instance, it has reduced the expected compound annual growth rate (CAGR) for revenues from 2024 to 2028, which has been revised to a decline of 4%.
The adjustments underline changing expectations about the company’s long-term prospects and performance. Coherus BioSciences, Inc. (NASDAQ:CHRS)’s largest investor in the second quarter of 2024 is David Rosen’s Rubric Capital Management, which owns 10.40 million shares worth $17.99 million. An Insider Monkey survey of 912 hedge funds for the same time period revealed that 16 funds had also invested in the firm.
Here is what Aristotle Small Cap Equity Strategy said about Coherus BioSciences, Inc. (NASDAQ:CHRS) in its fourth quarter 2023 investor letter:
“Coherus BioSciences, Inc. (NASDAQ:CHRS), a commercial-stage biopharmaceutical company engaged in the development and commercialization of biosimilar and immune-oncology therapeutics for major regulated markets, was removed from the portfolio. Despite the company’s efforts to grow and diversify its revenue base through a series of upcoming product launches, a variety of factors contributed to our decision to step away from our investment including a shift in company focus, competitive pricing pressures, and a recent C-suite departure.”
The worst 52-week low stocks to buy now, according to short sellers, are companies under immense pressure owing to deteriorating fundamentals. Given that the artificial intelligence arms race is just but starting, there are under-the-radar AI stocks trading at highly discounted valuations that hold greater promise for anyone looking to diversify their portfolio. If you are looking for an AI stock that is more promising than CHRS, check out our report about the cheapest AI stock.
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