Below we presented the list of 5 Best Aggressive Stocks to Buy Now. For our detailed discussion and a more comprehensive list please see 10 Best Aggressive Stocks to Buy Now.
5. Netflix, Inc. (NASDAQ:NFLX)
No of HFs: 104
Total Value of HF Holdings: $12.8 Billion
The top hedge fund holder of this stock is Ken Griffin’s Citadel Investment Group which had $2.73 billion invested in the stock at the end of September. An insider purchased 300 shares at around $310 in August 2019. The stock is up 61% since then. In an article, Tidefall Capital Management LP, mentioned NFLX in their Q3 2020 investor letter.
“In late February, Netflix introduced a Top 10 row to its user interface. Although a simple change, it eliminated the paradox of choice for users and greatly diminished the common complaint that “there’s nothing good on Netflix”. The global distribution that Netflix is able to offer creators is unprecedented, unrivaled and allows for a massive flywheel effect. Netflix only has a slight lead in subscribers over Amazon Prime, but nearly five times the engagement. The Top 10 list is creating a global ‘water cooler’ effect; if you want to be a part of the conversation, you must have Netflix.
Valuation is a sticking point for many investors on Netflix. However, it’s important to remember that founder Reed Hastings is playing a longer game than the hired executives at many of the new streaming competitors. At $13 per month, with 2.5 hours per day of viewership, over two accounts, the cost of Netflix is less than 9 cents per hour.”
4. Adobe, Inc. (NASDAQ:ADBE)
No of HFs: 106
Total Value of HF Holdings: $10.5 Billion
In an article, Nelson Roberts Investment Advisors mentioned ADBE in their 3Q 2020 investor letter,
“We purchased Adobe (NASDAQ: ADBE), the leading provider of content creation software. Adobe is a software company with a recurring revenue stream, which should insulate it from some of the negative effects of the COVID-19 outbreak.”
In a separate article, we shared RiverPark Advisors’ comment about the stock in their Q2 2019 investor letter:
“Adobe, which we have owned now for several years,3 is a prime example of this phenomenon of underestimating future earnings leading to a material differential in valuation. From 2015 to 2018, Adobe regularly beat quarterly earnings by an average 11% each quarter.4 In November 2015, Wall Street was quite bullish on the stock and forecast 44% annual EPS growth for the next three years – this led to a consensus estimate for Adobe’s 2018 EPS of “only” $3.57.5 Investors were seemingly paying 48x the next year’s EPS estimate6 (the S&P 500 multiple was 18x) and 25x 2018’s EPS making the stock look quite expensive. However, given the secular tailwind of marketing and cloud services driving the company’s growth, Adobe actually grew earnings 63% per year over that time (nearly 50% faster per year than the Street had projected), resulting in EPS in 2018 of $5.20. As a result, in November 2015, ADBE shares traded at only 17x the company’s actual 2018 EPS (more than 30% lower than what the Street had estimated).”
3. Apple, Inc. (NASDAQ:AAPL)
No of HFs: 134
Total Value of HF Holdings: $127.3 Billion
AAPL ranks 3rd in our list of 10 best aggressive stocks to buy now. The company was also mentioned in our 5 Best Dow Stocks To Buy Now. In an article, we shared Alger Spectra Fund’s comments about the stock,
“Apple is a leading technology provider in telecommunications, computing and services. Apple’s iOS operating system is the company’s unique intellectual property and competitive strength. This software drives extremely tight engagement with consumers and enterprises. This tight engagement is facilitating significant growth in high-margin services like streaming music. apps. and Apple Pay. Apple’s continued development of high-margin services and earnings streams for wearable devices as well as the potential contribution of 5G phones to the company’s growth supported the performance of Apple shares.”
Pixabay/Public Domain
2. Paypal Holdings, Inc. (NASDAQ:PYPL)
No of HFs: 150
Total Value of HF Holdings: $11.4 Billion
Wedgewood Partners mentioned PYPL in their Q4 2020 investor letter,
“PayPal continued its torrid pace of payment volume growth, up +38% during the quarter, driven by over 15 million new accounts (almost double the pre-pandemic rate) and continued increases in transactions per account. This led to +25% growth in revenue and hefty margin expansion as the Company continues to effectively leverage its fixed cost base. PayPal’s addressable market continues to be a multitrillion dollar opportunity, with the Company particularly focused on the faster growing and more lucrative e-Commerce channel.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
No of HFs: 245
Total Value of HF Holdings: $43.7 Billion
An insider recently purchased 1 share at around $3,213 in January 2020. The stock is down 0.09% since then. L1 Capital International Fund mentioned AMZN in their Q3 2020 investor letter.
“Several investments in the technology sector were trimmed on valuation grounds with the proceeds used to increase our investment in Amazon. Amazon’s successful flywheel business model and Amazon Web Services are well known. However, we believe the current share price under‑appreciates:
– The consistency and longevity of Amazon’s growth potential in its key businesses;
– The importance of additional revenue streams such as advertising which are high margin and growing rapidly; and
– The strengthening barriers to competition and competitive advantages arising from Amazon’s stepped‑up investment in logistics and other infrastructure.”
Please also see 10 Extreme Dividend Stocks with Huge Upside and 15 Best Dividend Stocks with Upside Potential.
