In this article, we discuss the 5 best 52-week low small-cap stocks to buy now. If you want to read our discussion on the overall economic environment in the US, go to the 10 Best 52-Week Low Small-Cap Stocks to Buy Now.
5. Holley Inc. (NYSE:HLLY)
Number of Hedge Fund Holders: 15
Holley Inc. (NYSE:HLLY) is a Bowling Green, Kentucky-based automotive performance company that was founded in 1896. The company specializes in advanced fuel-system designs through its market-leading electronic fuel injection (EFI) products.
In a research note issued to investors on August 12, Michael Swartz at Truist gave Holley Inc. (NYSE:HLLY) stock a target price of $10 and reiterated a Buy rating on the stock. The target price assumes a potential upside of over 75% from the closing price as of September 15. The analyst agreed that the company’s Q2 2022 results were not “pretty.” However, the challenges faced by Holley Inc. (NYSE:HLLY) during the three months was temporary and should not impact the long-term outlook of the company. The analyst maintains a bullish stance on Holley Inc. (NYSE:HLLY) stock and recommends it to investors with a long-term investment horizon.
Here’s what Wasatch Global Investors said about Holley Inc. (NYSE:HLLY) in its Q2 2022 investor letter:
“Another contributor was Holley, Inc., which designs, manufactures and sells high- performance automotive parts for car and truck enthusiasts. The company’s loyal customer base, healthy margins and specialized product offerings have enabled it to pass along higher costs and better withstand the impacts of inflation— especially compared to other businesses that lack the same pricing power. Investors reacted positively to Holley’s most recent round of acquisitions, which are expected to help unlock new and large markets of strategic importance to the company. Holley’s latest earnings report confirmed its organic growth profile, further underpinning confidence in the company’s future prospects. Holley is a former special-purpose acquisition company (SPAC), and there have been general concerns over SPACs because they usually issue warrants (options to purchase stock at a fixed price) that can dilute shareholder ownership down the road. For our part, we factor potential dilution into our analysis whenever we invest in a former SPAC. Regarding Holley specifically, last year we maintained our positive outlook for the company and we were rewarded in the first quarter of 2022.”
Overall, 15 hedge funds reported owning a stock in Holley Inc. (NYSE:HLLY) at the end of Q2 2022.
4. Hillman Solutions Corp. (NASDAQ:HLMN)
Number of Hedge Fund Holders: 18
Hillman Solutions Corp. (NASDAQ:HLMN) is a Cincinnati-based provider of simple hardware solutions that caters to the complex needs of its customers through 42,000 locations across the US.
The analysts believed that the Q2 2022 earnings season would bring a reduction in Hillman Solutions Corp.’s (NASDAQ:HLMN) financial guidance for Q3 2022 and the full year 2022 to reflect the potential weakness observed in the home building and building product segment. However, Hillman Solutions Corp. (NASDAQ:HLMN) maintained its 2022 revenue guidance in the range of $1.5 billion to $1.6 billion as opposed to the consensus estimate of $1.5 billion when the company reported its Q2 2022 results on August 3. Furthermore, the company maintained its free cash flow (FCF) guidance of $120 million to $130 million. Hillman Solutions Corp. (NASDAQ:HLMN) is working on expanding its product portfolio and is expected to gain greater market share in the coming years.
ClearBridge Investments shared its bullish outlook on Hillman Solutions Corp. (NASDAQ:HLMN) in its Q4 2021 investor letter. Here’s what the firm said:
“We completely agree with Ben Graham’s alleged assessment: “In the short run, the market is a voting machine, but in the long run, it is a weighing machine.” In 2021 we observed votes being cast against companies based solely on how and when they raised capital, as if the choice of financing vehicle overrides the longterm value creation of the underlying business. The Initial Public Offerings Class of 2021 and companies that raised capital by merging with Special-Purpose Acquisition Companies (SPACs) were two such areas that detracted from the Strategy’s performance. Over time we trust that the value of each of the businesses underlying these holdings will be reflected as the “weighting machine” resumes operation. Of course, many IPOs and SPAC acquisitions were immature businesses — often just concepts — that shouldn’t be public, but with so many deals done, there are sure to be babies in that bathwater.
One such example is Hillman Solutions, which concluded the process of merging with Landcadia Holdings III (a SPAC) in mid2021. Hillman is a hardware distributor and provider of automation tools (for example, key making and knife sharpening) to retailers in the U.S. In the short term, supply chain issues have impacted the business while the treatment of SPAC-related warrants appears to have been a focus for bearish investors. In the long-term, Hillman is well-positioned to continue growing given the quality and labor alternative provided by its services. Despite a recent decline, Hillman’s fill rates (i.e., in-stock inventory) remain the highest in the industry, which should lead to market share gains and likely entry into additional product categories. Hillman’s business model, which includes taking over inventory, distribution and floor staffing, as well as solutions such as automated self-service kiosks, helps to address one of the main pressure points in its customers’ business: labor. Meanwhile the expectations for future growth and profitability discounted in Hillman’s current stock price are extremely modest relative to its potential.”
3. Cerus Corporation (NASDAQ:CERS)
Number of Hedge Fund Holders: 19
Cerus Corporation (NASDAQ:CERS) is a Concord, California-based biotechnology company involved in developing and providing pathogen-protected blood components to blood centers and hospitals.
Cerus Corporation’s (NASDAQ:CERS) Intercept Blood System for platelets and plasma is the only pathogen reduction system that has received approval from the FDA along with a CE mark that reflects the conformity to the European standards of health and safety. Cerus Corporation (NASDAQ:CERS) has agreed on a five-year extension with the American Red Cross for the Intercept System. The American Red Cross is responsible for providing nearly 40% of all the blood in the US. On the other hand, the company has also signed an agreement with Fresenius Kabi to produce the Intercept Kits for the next decade. The company’s bright future prospects justify its position in our list of the 10 best 52-week low small-cap stocks to buy now.
Baker Bros. Advisors was the leading hedge fund investor in Cerus Corporation (NASDAQ:CERS) during Q2 2022.
2. Wheels Up Experience Inc. (NYSE:UP)
Number of Hedge Fund Holders: 19
Wheels Up Experience Inc. (NYSE:UP) is a New York-based private aviation service provider that offers on-demand private flights with all the necessary amenities. The company has a fleet of over 200 aircraft and provides access to over 1,200 third-party aircraft.
Experts believe that Wheels Up Experience Inc. (NYSE:UP) is serving an established end market with a potential for high growth. Goldman Sachs also expressed a bullish stance on Wheels Up Experience Inc. (NYSE:UP), citing that the company has significant unique growth catalysts for the long term. However, the investment firm also shared that the private aviation services market is fragmented and requires an asset efficiency model. Wheels Up Experience Inc.’s (NYSE:UP) current share price offers an attractive entry point for potential long-term investors.
During August, Wheels Up Experience Inc. (NYSE:UP) unveiled a number of efforts that ought to yield fruitful outcomes in the future. The company’s controlled fleet is managed via the UP FMS platform from a centralized dashboard. This is expected to increase the effectiveness with which daily tasks and crew scheduling are managed.
Of the 895 hedge funds in Insider Monkey’s database, 19 funds reported owning a stake in Wheels Up Experience Inc. (NYSE:UP) during Q2 2022.
1. The Hain Celestial Group, Inc. (NASDAQ:HAIN)
Number of Hedge Fund Holders: 25
The Hain Celestial Group, Inc. (NASDAQ:HAIN) is a New York-based natural and organic food product company that was founded in 1957.
Anthony Vendetti at Maxim gave The Hain Celestial Group, Inc. (NASDAQ:HAIN) stock a target price of $42, along with a Buy rating in a research note issued on August 26. The target price assumes a potential upside of over 123% from the closing price as of September 15. The analyst highlighted that The Hain Celestial Group, Inc.’s (NASDAQ:HAIN) penetration of the growing brands increased by 5% YoY during Q4 FY22 despite the price increase. These brands are responsible for generating 80% of volume and profits from the North American business. The analyst concluded this was a positive development for the corporation.
As of Q2 2022, 25 elite funds reported owning a stake in The Hain Celestial Group, Inc. (NASDAQ:HAIN).
You can also take a peek at 10 Best Media Stocks To Buy and 12 Best AI Stocks To Buy.
