In this article we discuss the 5 best beginner stocks to invest in right now. If you want to read our detailed analysis of these stocks, go directly to the 10 Best Beginner Stocks to Invest in Right Now.
5. Visa Inc. (NYSE: V)
Number of Hedge Fund Holders: 164
Visa Inc. (NYSE: V) stands fifth on our list of the best beginner stocks to invest in now. The company is based in America and has operations in over 200 countries. Visa Inc. (NYSE: V) draws the attention of the new investors because of the consistent growth it has shown over the years. In Q2 2021, the company generated $5.7 billion in revenues or $1.38 per share.
V stock has climbed back, growing 18.6% in the past year. The company also pays an annual dividend of $1.28 per share, with a dividend yield of 0.55%.
At the end of Q1 2021, 164 hedge funds tracked by Insider Monkey hold positions in the company, compared with 166 funds in the quarter earlier.
ClearBridge Investments published its first-quarter 2021 investor letter and mentioned why they sold its Visa Inc. (NYSE: V) position. Here is what the investment management firm has to say:
“To make room for these new names with more attractive outlooks related to the reopening, we sold out of companies where the thesis is not playing out at the pace we expected including Visa.”
4. Upwork Inc. (NASDAQ: UPWK)
Number of Hedge Fund Holders: 32
Upwork Inc. (NASDAQ: UPWK) is a freelancing website providing self-employed working opportunities to freelancers worldwide. With the rise in freelance work, Upwork Inc. (NASDAQ: UPWK) becomes one of the best beginner stocks to invest in right now. In 2020, the company reported 59 million people turning to freelance in the U.S.
In Q1 2021, Upwork Inc. (NASDAQ: UPWK) reported revenue of $113.6 million, up from $83 million during the same period last year. The share price has also escalated by 303% in the past year and 43.6% year to date. At the end of Q1 2021, 32 hedge funds have stakes in Upwork Inc. (NASDAQ: UPWK), worth $530 million.
Spree Capital Advisers, a long-biased investment firm, published its Q4 2020 investor letter and mentioned Upwork Inc. (NASDAQ: UPWK). Here is what the firm has to say:
“Early in the fourth quarter we meaningfully increased our position size in Upwork (UPWK). Upwork is a global employment marketplace that enables businesses to vet, hire, and manage talent as part of their distributed workforce. Upwork facilitates labor and demand side connectivity on a global scale by providing the infrastructure to create trust and to streamline talent sourcing, contracting, analysis and payment. Freelancers benefit from having a reputation ranking system that feeds their marketing channels, allowing them to have access to quality, flexible work and on time compensation. Businesses on the demand side benefit by having extensive access to specialized talent, enabling faster and more cost effective hiring, and by having the strategic optionality inherent in the ability to flex a portion of their workforce based on changing demand requirements.
Labor markets have long had unnecessary frictional inefficiencies driven by regional talent imbalances and long-term trends of increased specialization of labor and declining labor mobility. Meanwhile, innovations in communication and global connectivity have transformed the way work gets done. Knowledge workers seek the flexibility and geographic advantages of on demand work, but the barrier to adoption has historically been established habits and work standards on the demand side. The Covid-19 global pandemic has broken down those barriers. We see three steps in the path to enterprise usage and shareholder value creation.
First, Upwork is reducing frictional barriers to on demand labor adoption on the demand side by modularizing the most common jobs served on the platform. Project Catalog is a collection of predefined projects that businesses purchase through an e-commerce purchase experience. Users on the demand side benefit from a frictionless way to purchase well defined, quality verified tasks to augment more complex work being done by full time employees. On demand workers on the supply side benefit from having a new avenue to market and sell the services they consistently perform. Importantly, Project Catalog widens the customer acquisition funnel by providing an easy on ramp for new customers to source and connect with talent, enabling businesses to quickly start with small projects and scale to larger and longer-term projects and relationships.
Second, Upwork is shifting its go to market strategy to target large enterprises. Currently, enterprise customers with more than 100 employees account for 20% of Upwork’s $2.7 billion in gross services volume. As part of shifting the go to market strategy, small and medium sized business customers will move to a fully self-service offering, allowing Upwork’s sales force to focus on capturing the $3.5 trillion in gross services volume that large enterprise customers currently spend on contingent labor. As Upwork’s sales team targets the large underserved market opportunity presented by enterprise customers and raises awareness of the quality verified modular work units available in Project Catalogue, there is a long runway for Upwork to power offline to online conversion in the on demand labor marketplace while breaking down the barriers to adoption and growing the overall size of the market.
Third, Upwork is evolving to become an enterprise resource planning system for businesses to manage their on-demand workers. There are 3 main parts to this. One, Upwork is expanding its employer of record status to all businesses. Employer of record status indemnifies businesses from misclassification risk and the inherent punitive fines and back taxes, creating a situation where managers “don’t get fired for choosing Upwork”. Two, Upwork is expanding its payrolling solution. The expansion of the payrolling solution creates a centralized global offering for businesses to pay independent workers in 160 countries. A payrolling solution with escrow protection provides value by ensuring that businesses only pay for completed work, and on demand workers get paid on time and in full. A recent product initiative, Direct Contracts, enables escrow protection of on demand workers outside of the Upwork marketplace. Upwork’s position in the middle of payment flow naturally pulls users onto the marketplace as Upwork provide a distribution relationship where they bring the value to both parties. Three, Upwork is expanding analytics and reporting functionality for productivity, compliance, and risk controls. Increased functionality further ingrains Upwork in enterprise workflow as it becomes the single pane of glass for managing on demand workers.
These three steps in the path to increased enterprise usage create value by changing the way enterprises utilize on demand workers. As enterprise customers utilize Upwork’s platform to vet experienced talent to create their virtual talent bench, the benefits of greater control and flexibility to dynamically manage their cost base and flex operations as they scale becomes ingrained in their way of doing business. As younger generations that are twice as likely to engage remote workers in an on-demand capacity ascend to managerial roles with hiring and decision-making authority, the secular trend of increasing on demand worker utilization only grows stronger. While the strategic initiatives and secular trends push the business forward, Upwork’s significant growth investments that are being expensed as Research and Development, and Sales and Marketing on the income statement paint a picture far different than the run rate profitability both currently and at scale. With a current marketplace gross services volume of $2.7 billion and a contingent work addressable market worth upwards of $500 billion in gross services volume today, we see a long runway for Upwork’s global scale to drive transformation of on demand labor usage to reduce frictional inefficiencies in the labor market and create meaningful shareholder value.”
3. Apple Inc. (NASDAQ: AAPL)
Number of Hedge Fund Holders: 127
Apple Inc. (NASDAQ: AAPL) is next on our list of the best beginner stocks to invest in right now. The Q1 2021 revenue of the company stood at over $89.5 billion, up from 58.3 billion during the same period last year. The analysts expect a 21% growth in revenue in 2021.
Apple Inc. (NASDAQ: AAPL) has been the choice of investors because of its continuous growth over the years. The share price of AAPL stock has increased by 446% in the past five years and 48% in the past year. Apple Inc. (NASDAQ: AAPL) has 16.6 billion shares outstanding, 58.6% of which are owned by the institutions. The company also announced a quarterly dividend of $0.22 per share.
A total of 127 hedge funds tracked by Insider Monkey held stakes in Apple as of the end of the first quarter of 2021.
An investment management firm, ClearBridge Investments, published its ‘Large Cap Value Strategy’ Q1 2021 investor letter. The firm mentioned Apple Inc. (NASDAQ: AAPL) in its letter. Here is what it has to say:
“As we actively manage holdings and position sizes, we look to regularly recycle capital into more compelling opportunities. Maintaining our valuation discipline, we sharply reduced our position in Apple, whose shares more than doubled following our initial purchase in mid-2019 with an earnings multiple rising from the low-to-mid teens to nearly 30x.”
2. Exxon Mobil Corporation (NYSE: XOM)
Number of Hedge Fund Holders: 65
Exxon Mobil Corporation (NYSE: XOM) is an American energy company, dealing in oil and gas. The company accounts for 2% of the world’s energy. The company suffered in 2020 due to the market crash and sinking oil prices but is already on the road to stability. In Q1 2021, Exxon Mobil Corporation (NYSE: XOM) reported $57.5 billion in revenues, compared with $55.1 billion during the same period last year.
According to BofA, the shares of Exxon Mobil Corporation (NYSE: XOM) are expected to rise 45% and the firm listed the stock as a Buy. The XOM stock has soared by 54% year to date and 32.9% in the past year, making it one of the best beginner stocks to invest in right now. Exxon Mobil Corporation (NYSE: XOM) announced a dividend of $0.87 per share earlier in May 2021.
At the end of Q1 2021, 65 hedge funds tracked in our database hold Exxon Mobil Corporation (NYSE: XOM) positions, worth $2.7 billion.
Harding Loevner, an investment management firm, published its Q1 2021 investor letter and mentioned Exxon Mobil Corporation (NYSE: XOM) along with other stocks. Here is what the fund said:
“We felt that our remaining energy holding, ExxonMobil, with its stronger balance sheet, was in a better position to ride out the cyclical slump in oil demand and even perhaps take advantage of it by investing counter-cyclically. While ExxonMobil does plan to increase capital expenditure, we’ve been disappointed in its regrettable failure to address ongoing emission trends, which reflects poorly on management’s foresight. As a result, we sold our ExxonMobil holdings.”
1. Square, Inc. (NYSE: SQ)
Number of Hedge Fund Holders: 92
Square, Inc. (NYSE: SQ) stands first on our list of the best beginner stocks to invest in right now. The company provides financial services to its customers and mainly operates in digital payments. The Q1 2021 revenue of Square, Inc. (NYSE: SQ) stands at $5.05 billion, rising above the $3.36 billion expectation of the analysts.
With a rise in card payments globally, Square, Inc. (NYSE: SQ) is all set to benefit from its mobile payment service, Cash App. In 2020, Cash App managed to increase its users by 12 million, drawing the attention of investors. The SQ stock price has also grown by 138% in the past year and 11% in the past month. The stock has also delivered a 134% return to its shareholders in the past year.
As of Q1 2021, 92 hedge funds tracked by Insider Monkey own stakes in Square, Inc. (NYSE: SQ), compared with 89 funds in a quarter earlier. The total value of these stakes is $9.2 billion.
RiverPark Funds, an investment management fund, released its first-quarter 2021 investor letter and mentioned Square, Inc. (NYSE: SQ) in it. Here is what the firm has to say:
“We established a position in leading Financial Technology provider Square during the quarter. Through one integrated system, SQ is a hybrid of two businesses: its Seller Business (charging small and medium-sized businesses about 3% for transaction payment processing, plus other services such as instant funds access, and software for everything from customer engagement to payroll), and its Cash App (originally for person-to-person cash transfers and now a growing digital financial services provider for consumers).
The combined business has grown gross profit at a 37% CAGR over the past five years to $2.7 billion (due to pass through costs, gross profit is more reflective of top-line growth) and we believe that the company has an enormous long-term runway, as it has less than a 2% share of a more than $160 billion market. It is our view that the company’s Cash App (which has grown
from nothing in 2015 to $1.2 billion gross profit last year) has a particularly large opportunity with its powerful ecosystem of digital financial services including digital wallets, direct deposits, stock trading, bitcoin trading, and business and tax services, which are all relatively new. The vast majority of Cash App’s more than 36 million users are younger and, importantly, are willing to replace their bank and other financial services accounts with the app.
We estimate that the company can grow its gross profit more than 30% and EBITDA more than 50% annually for the foreseeable future, and while most of the company’s current profit is from its Seller Business, we believe most of Square’s future value will be from its Cash App business.”
You can also take a peek at Top 10 High Growth Stocks To Buy in 2021 and 10 Safe Stocks To Invest in For Long Term.
