In this article, we discuss the 5 best new stocks to buy now. If you want to read through our detailed analysis of the best new stocks, go directly to 10 Best New Stocks to Buy Now.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind, here are the 5 best new stocks to buy now:
5. Vontier Corporation (NYSE:VNT)
No of HFs: 36
Total Value of HF Holdings: $590 Million
The worldwide industrial technology company Vontier Corporation ranks 7th in our list of best new stocks to buy now. The company provides services that focus on environmental sensors, fueling equipment, vehicle tracking, fleet management software solutions, and workflow software. As of March 1, VNT shares trade at $31. At the end of the fourth quarter, 36 hedge funds tracked by Insider Monkey held stakes in Vontier Corporation. During the fourth quarter of 2020, the company reported net earnings of $136.8 million, adjusted net earnings of $147.4 million, diluted net earnings per share of $0.81, and adjusted diluted net earnings per share of $0.87. The company also reported a 9.6% year-over-year jump in revenue.
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4. C3.ai, Inc. (NYSE:AI)
No of HFs: 37
Total Value of HF Holdings: $483 Million
The leading enterprise AI software provider C3.ai Inc. was founded in 2009 by CEO Thomas Siebel. The company first went public in December 2020. AI priced its IPO at $42 a share. As of March 1, AI shares trade at $112. They were recently awarded a broad-ranging omnibus US patent for an end-to-end enterprise AI solution. During the third quarter of 2020, AI reported revenue of $41.28 million.
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3. PROG Holdings, Inc. (NYSE:PRG)
No of HFs: 38
Total Value of HF Holdings: $374 Million
Ranking 3rd in our list of 10 best new stocks to buy now is Prog Holdings, Inc. PRG serves users in the United States. The company provides commercial equipment, finance, and leasing services. PRG only began trading on the New York Stock Exchange on December 1, 2020. As of March 1, The stock trades at $50 and offers a dividend yield of 0.36%. Shares of PRG rallied 50% over the last twelve months. At the end of the fourth quarter, 38 hedge funds in Insider Monkey’s database of 887 hedge funds held stakes in PRG, compared to 0 funds in the third quarter. At the end of the fourth quarter, PRG reported revenue of $605.7 million, diluted EPS of $0.62, and non-GAAP diluted EPS of $0.95.
2. DoorDash, Inc. (NYSE:DASH)
No of HFs: 38
Total Value of HF Holdings: $3.95 Billion
The food delivery service DoorDash, Inc. ranks 2nd on our list of best new stocks to buy now. As of March 1, DASH shares trade at $169. Shares of DASH rallied 18% over the last twelve months. Philippe Laffont’s Coatue Management is one of the top hedge funds having positions in DASH. The hedge fund had 8.7 million shares of the company, worth $1.24 billion, as of the end of the fourth quarter.
During the fourth quarter of 2020, DASH reported revenue of $970 million. The company is expecting continuous growth in marketplace gross orders as COVID-19 vaccines become available for general public.
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1. Airbnb, Inc. (NASDAQ:ABNB)
No of HFs: 68
Total Value of HF Holdings: $1.61 Billion
Topping the list of best new stocks to buy now is Airbnb. ABNB is an online vacation rental marketplace based in San Fransisco, California. The company was founded in 2008 by Brian Chesky, Nathan Blecharczyk, and Joe Gebbia. According to a Pitchbook report, Airbnb, Inc. was one of the most valuable companies that came to the public markets in 2020. Amid the pandemic, ABNB reported only a 22% decline in revenue during the fourth quarter of 2020 compared to the same quarter of 2019. Shares of ABNB rallied 40% over the last 12 months. One of the biggest shareholders having stakes for Airbnb is Jim Davidson, Dave Roux, and Glenn Hutchins’ Silver Lake Partners which had 2.5 million shares of the company, worth $375 million.
Blue Hawk Investment Group mentioned ABNB in its Q4 2020 investor letter:
“We typically avoid new issues, with ABNB being a rare exception. ABNB fits right into our wheelhouse as a leader in a promising industry, with a disruptive business model, unique company culture, massive addressable market, and a name synonymous with a category (“got an Airbnb for the weekend”). Towards the end of the year, the narrative of the hot IPO/SPAC environment we found to be fitting, with exception. We believe grouping ABNB into this category is a mistake. The IPO was botched, but the mistake was the initial offering price being far too low in this case. We believe the reason for this initial mispricing was the proximity of the IPO to the vaccine effectiveness data release. The data turned out to be much better than anticipated, a blue-sky result, causing a drastic change in the outlook for travel and lodging, the industry in which ABNB operates. Bayes Theorem in action, people typically have a bias when incorporating new information, in that they do not adjust their view as quickly as they should, and the vaccine data release required an almost complete reversal of views.
Back to the company, we started buying on day one and continued to build a position into the $120s and $130s. A founder-led firm, we believe the company has an excellent management team, a very attractive growth profile with many levers at their disposal, and embedded optionality due to their attractive position in the travel ecosystem (and minimal reliance on Google). The most underappreciated aspect of the story is the attractiveness of the financial model. Not many IPOs come along that get us excited, but we believe the future is bright for this young company. We will reveal more details about our thesis in future letters.”
You can also take a peek at Billionaire Stan Druckenmiller’s Top 10 Stock Picks and Billionaire Julian Robertson On Interest Rates and His Top Stock Picks For 2021.
