In this article, we discuss 5 best buy-the-dip growth stocks to buy now. If you want to see more stocks to buy on the dip, click 10 Best Buy-the-Dip Growth Stocks to Buy Now.
5. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 80
YTD Share Price Decline as of May 27: 37.05%
Tesla, Inc. (NASDAQ:TSLA), the American EV giant, is down over 37% year-to-date as of May 27. With more individuals and corporations concerned about climate change and governments encouraging lower carbon emissions, the electric vehicles sector is expected to explode in the future, which makes Tesla, Inc. (NASDAQ:TSLA) one of the best buy-the-dip growth stocks to buy now.
On April 20, Tesla, Inc. (NASDAQ:TSLA) reported earnings for the first quarter of 2022. The company announced an EPS of $3.22, above consensus estimates by $0.95. The revenue of $18.76 billion grew 80.54% year-over-year and beat analysts’ predictions by $917.76 million.
Credit Suisse analyst Dan Levy on May 27 said that Tesla, Inc. (NASDAQ:TSLA)’s long-term opportunity remains strong, making him believe the recent pullback in the shares is an attractive entry point. He maintained an Outperform rating on the stock with an $1,125 price target after viewing Tesla, Inc. (NASDAQ:TSLA)’s Fremont facility. The analyst expects the company’s short-term, specifically Q2, to reflect “some regression” in margins and total deliveries, driven by the production headwinds in Shanghai.
Among the hedge funds tracked by Insider Monkey, 80 funds held bullish positions in Tesla, Inc. (NASDAQ:TSLA) at the end of March 2022, compared to 91 funds in the last quarter. ARK Investment Management reported a prominent stake in the company, comprising 1.5 million shares worth $1.7 billion.
Here is what Baron Fifth Avenue Growth Fund has to say about Tesla, Inc. (NASDAQ:TSLA) in its Q1 2022 investor letter:
“During the first quarter, we bought back shares in Tesla, Inc., which designs, manufactures, and sells electric vehicles, solar products, energy storage solutions, and batteries. We believe that despite the run in the stock over the last few years, Tesla presents a favorable risk/reward profile and remains a Big Idea with only about 1% market share of the automotive market. Since we bought the stock during the first quarter, shares increased 27.1%, despite a complex supply-chain environment, on continued revenue growth and record profitability. Robust demand and operational optimization allow the company to offset inflationary pressures while vertical integration provides flexibility around supply bottlenecks. Moreover, we expect new localized manufacturing capacity to drive additional efficiencies while software initiatives, including the autonomous driving program, are accelerating, offering valuable optionality to the stock.”
4. Roblox Corporation (NYSE:RBLX)
Number of Hedge Fund Holders: 40
YTD Share Price Decline as of May 27: 67.88%
Roblox Corporation (NYSE:RBLX) operates an online entertainment platform, allowing web developers to build and manage 3D experiences for users. The stock has declined about 68% year-to-date as of May 27, but the company is positioned as one of the biggest metaverse contenders, which makes it an attractive stock to buy on the dip.
In the first quarter of 2022, the company reported that average daily active users (DAUs) were 54.1 million, an increase of 28% year over year. Similarly, hours engaged on the platform were 11.8 billion, reflecting an increase of 22% from the prior-year quarter. However, Roblox Corporation (NYSE:RBLX) missed Street estimates on earnings per share and revenue in Q1 2022.
On May 17, Daiwa analyst Jonathan Kees kept an Outperform rating on Roblox Corporation (NYSE:RBLX) but lowered the price target on the shares to $38 from $56. Roblox Corporation (NYSE:RBLX) stressed on a return to seasonality, increasingly normalized growth moving ahead, and bookings growth in the the second half of 2022, all of which “is good news given that investors had uncertainty about timing of the bookings rebound and the reopening trajectory”, the analyst told investors in a research note. However, he slashed price estimates as he forecasts higher company spending ahead.
According to the records kept by Insider Monkey, Roblox Corporation (NYSE:RBLX) was found in 40 public hedge fund portfolios at the end of March 2022, down from 61 funds in the last quarter. Philippe Laffont’s Coatue Management is one of the leading shareholders of the company, with 4.7 million shares worth $221.60 million.
Here is what Tao Value has to say about Roblox Corporation (NYSE:RBLX) in its Q4 2021 investor letter:
“Roblox (RBLX) got significant more attention from both institutional & retail investors after Facebook announced to rename itself as Meta Platforms. I believe the price appreciation is largely attributed to the increased attention. On the business side, Roblox rolled out a few successful music events and also partnered with Netflix on testing long-form media consumption in the virtual world. Apple in its iOS 14.5 rolled out an impactful change for the digital advertising landscape by requiring all apps to ask users to “opt in”.
3. Intellia Therapeutics, Inc. (NASDAQ:NTLA)
Number of Hedge Fund Holders: 35
YTD Share Price Decline as of May 27: 58.58%
Intellia Therapeutics, Inc. (NASDAQ:NTLA) is an American genome editing company that develops pharmaceuticals for a wide range of diseases. As of May 27, the Intellia Therapeutics, Inc. (NASDAQ:NTLA) stock has dropped about 59% so far this year. Genomics is a branch of biotechnology that is positioned to grow in the coming years since it helps treat genetic or acquired diseases, making Intellia Therapeutics, Inc. (NASDAQ:NTLA) a notable stock to buy on the dip.
On May 9, Oppenheimer analyst Jay Olson maintained an Outperform rating on Intellia Therapeutics, Inc. (NASDAQ:NTLA) but lowered the firm’s price target on the shares to $130 from $160 after the company announced Q1 results and offered updated reports from the Phase 1 study of NTLA-2001 in ATTR amyloidosis. The analyst is “encouraged” by the growing profile, which he believes boasts curative potential.
According to the first quarter database of Insider Monkey, Intellia Therapeutics, Inc. (NASDAQ:NTLA) was part of 35 hedge fund portfolios, up from 31 funds in the prior quarter. Andreas Halvorsen’s Viking Global is one of the leading stakeholders of the company, with 2.4 million shares worth $179.40 million.
Carillon Tower Advisers discussed its stance on Intellia Therapeutics, Inc. (NASDAQ:NTLA) in its Q2 2021 investor letter.
“Intellia Therapeutics is a clinical-stage genome editing company focused on the development of proprietary, potentially curative therapeutics. The company’s stock soared after announcing positive interim data from an ongoing phase 1 clinical study of its in vivo gene editing candidate, which is being developed as a single-dose treatment for hereditary transthyretin (ATTR) amyloidosis. This specific form of therapy would be the first of its kind resulting in the precision editing of a gene in a target tissue in the human body.”
2. Ginkgo Bioworks Holdings, Inc. (NYSE:DNA)
Number of Hedge Fund Holders: 30
YTD Share Price Decline as of May 27: 63.64%
Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) is a Massachusetts-based company that specializes in cell programming, assisting with the development of novel therapeutics, food ingredients, and chemicals derived from petroleum.
Despite the YTD decline in share prices of almost 64% as of May 27, Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) is a strong company to invest in, given its potential in the agriculture market amid the strength in commodities. This merits Ginkgo Bioworks Holdings, Inc. (NYSE:DNA)’s inclusion on our list of the best buy-the-dip growth stocks to buy now.
On May 18, BofA analyst Derik de Bruin downgraded Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) to Underperform from Neutral with a price target of $3, down from $6, as he believes that the short-to-medium term upside appears limited. However, he remains positive on the long-term potential of the synthetic biology space and Ginkgo Bioworks Holdings, Inc. (NYSE:DNA)’s platform. He believes that the Q1 results outperformed consensus due to pandemic-related demand. He would need more visibility into Ginkgo Bioworks Holdings, Inc. (NYSE:DNA)’s future revenue streams and the market’s “appetite for longer duration growth stories to return” in order to revisit his outlook on the stock, the analyst added.
Among the hedge funds tracked by Insider Monkey, 30 funds were long Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) at the end of Q1 2022, with collective stakes worth $990.3 million, compared to the same number of funds in the preceding quarter, with stakes in the company valued at $4.2 billion.
1. Coinbase Global, Inc. (NASDAQ:COIN)
Number of Hedge Fund Holders: 46
YTD Share Price Decline as of May 27: 70.67%
Coinbase Global, Inc. (NASDAQ:COIN) is an American company that provides financial infrastructure and technology for the crypto industry. The stock price has fallen over 70% year-to-date as of May 27. However, with crypto being the preferred medium of transactions in the metaverse and retail interest in the crypoverse, Coinbase Global, Inc. (NASDAQ:COIN) remains positioned as one of the best buy-the-dip growth plays.
Cowen analyst Stephen Glagola on May 26 initiated coverage of Coinbase Global, Inc. (NASDAQ:COIN) with an Outperform rating and an $85 price target. The company is a dominant player in the US and the analyst expects it to be primarily an exchange/retail brokerage-driven story over the next several years. He believes in the company’s double-digit percentage compound annual growth potential for “the foreseeable future” and argues that Coinbase Global, Inc. (NASDAQ:COIN) has a structural advantage over global competitors in security infrastructure and regulatory adherence.
According to Insider Monkey’s Q1 data, 46 hedge funds were bullish on Coinbase Global, Inc. (NASDAQ:COIN), compared to 57 funds in the preceding quarter. Jim Simons’ Renaissance Technologies reported a prominent stake in the company, with 1.05 million shares worth $199.7 million.
Here is what Longleaf Partners Fund has to say about Coinbase Global, Inc. (NASDAQ:COIN) in its Q4 2021 investor letter:
“We also have seen plenty of IPO/SPAC craziness showing both that private players need public markets more than they admit and that there is more volatility embedded in these newer companies than a private quarterly mark might admit. As for how efficient both the private and public markets are, we would encourage you to really delve into some of those multi-hundred-page S1s for many of the newest public companies to see the huge gap between the last valuation at which the company was funded and/or granted shares to its executives and the often much higher price at which the company went public – Coinbase is a prime example.”
You can also take a look at 10 Biotech Penny Stocks with Growth Catalysts and 10 Safe Stocks To Invest in For The Long-Term in 2022.
