In this article, we discuss the 5 best reopening stocks to buy now. If you want to read our detailed analysis of the reopening stocks, go directly to the 15 Best Reopening Stocks to Buy Now.
5. Caterpillar Inc. (NYSE: CAT)
Number of Hedge Fund Holders: 62
Caterpillar Inc. (NYSE: CAT) is an American manufacturer of construction and mining equipment. The company operates through three main segments; Construction Industries, Resource Industries, and Energy and Transportation.
In Q2 2021, Caterpillar Inc. (NYSE: CAT) saw growth in sales in all segments, with Construction and Resource industries reporting a 40% year-over-year growth. This growth was mainly driven by the resumption of construction activities. According to Citi Group, Caterpillar Inc. (NYSE: CAT) would benefit heavily from Joe Biden’s $2 trillion infrastructure plan as the company has a significant market share in heavy construction equipment. Recently, Baird raised its price target on Caterpillar Inc. (NYSE: CAT) to $270, with an ‘Outperform’ rating on the shares. Caterpillar Inc. (NYSE: CAT) gained 54.5% in the past year.
As of Q2 2021, the hedge funds having positions in Caterpillar Inc. (NYSE: CAT) increased to 62 from 53 in the previous quarter. The total value of the stakes is $5.2 billion.
4. Target Corporation (NYSE: TGT)
Number of Hedge Fund Holders: 66
Target Corporation (NYSE: TGT) is a retail corporation and the eighth-largest retailer in the U.S. The company was founded in 1902 and has over 1,900 stores located in the U.S.
Target Corporation (NYSE: TGT) reported strong Q1 2021 results. The company’s comparable sales grew by 22.9%, with a 50% growth in digital sales. The company also expects mid-to-high single-digit growth in comparable sales in FY21 and has also increased its dividend by 32%. The chief investment officer at Laffer Tengler Investment, Nancy Tengler, reported that Target Corporation (NYSE: TGT) could certainly benefit because of stores near population as 75% of the U.S. population lives within 10 miles of a Target store. Moreover, the company’s initiative of same-day delivery of in-store purchases would help boost sales. Recently, Stifel raised its price target on Target Corporation (NYSE: TGT) to $280, with a ‘Buy’ rating on the shares. Target Corporation (NYSE: TGT) has delivered an 89.5% return to shareholders in the past year.
As of Q2 2021, 66 hedge funds tracked by Insider Monkey have positions in Target Corporation (NYSE: TGT), up from 60 in the previous quarter.
LRT Capital Management released its first-quarter 2021 investor letter and mentioned Target Corporation (NYSE: TGT) in it. Here is what the firm has to say:
“Target, the Minneapolis-based retailer, continues to fire on all cylinders as the company has reported two quarters in a row of +20% revenue growth (5% traffic growth + 15% average basket size6), coupled with the strongest EBITDA margins in over four years. The company has successfully navigated the Covid-19 pandemic with online sales growing by 155% and 118% during Q3 2020 and Q4, respectively.
On March 2nd, the company reported another stellar quarter, with same-store sales growing by over 20%, and both earnings (+57% YoY) and revenues (+21% YoY) beating estimates. The shares are up 14.11% year-to-date. We believe the shares are a bargain 23x trailing and 20x forward earnings.”
3. Johnson & Johnson (NYSE: JNJ)
Number of Hedge Funds: 88
Johnson & Johnson (NYSE: JNJ) is an American multinational company that specializes in medical devices, consumer goods, and pharmaceuticals.
According to Kenny Polcari, founder of Kace Capital Advisors, Johnson & Johnson (NYSE: JNJ) would do well as the economies around the world open up, mainly because of its medical sector. He further said that the company’s development of the Covid-19 vaccines signals towards a potential upside. This seems viable as Johnson & Johnson (NYSE: JNJ) generated $164 million in vaccine revenue in Q2 2021. The company also expects to generate $2.5 billion through vaccines in FY21. In June, Credit Suisse lifted its price target on Johnson & Johnson (NYSE: JNJ) to $193, with a ‘Buy’ rating on the shares.
As of Q2 2021, 88 hedge funds tracked by Insider Monkey have positions in Johnson & Johnson (NYSE: JNJ), up from 81 in the previous quarter. The total worth of these stakes is over $7 billion.
2. The Walt Disney Company (NYSE: DIS)
Number of Hedge Fund Holders: 112
The Walt Disney Company (NYSE: DIS) is a multinational media and entertainment company. The company has business in mainly four segments, including media networks, studio entertainment, parks, and experiences and products. The Walt Disney Company (NYSE: DIS) is one of the largest entertainment producers and providers globally.
According to RBC Capital, The Walt Disney Company (NYSE: DIS) could exhibit growth momentum for at least the next two quarters due to the reopening of theme parks. Moreover, the television and direct-to-consumer sectors will also continue to grow as the company reported nearly 174 million subscriptions at the end of Q3 2021. The Walt Disney Company (NYSE: DIS) generated $17 billion in revenue, up from $11.7 billion during the same period last year. Argus lifted its price target on The Walt Disney Company (NYSE: DIS) to $255, with a ‘Buy’ rating. The stock soared by 36.04% in the past year.
As of Q2 2021, 112 hedge funds tracked by Insider Monkey have positions in The Walt Disney Company (NYSE: DIS), worth over $10.8 billion.
RiverPark Funds released its second-quarter 2021 investor letter and mentioned The Walt Disney Company (NYSE: DIS) in it. Here is what the firm has to say:
“DIS shares declined for the quarter, taking a pause after a big fourth quarter and first quarter stock price advance, as Disney+ subscriber numbers were disappointing to investors. Disney+, the company’s DTC streaming business, had blown past previous subscriber projections, having gone from zero to 104 million in 17 months, but investors were now expecting 109 million subscribers. Management still expects significant continued growth to 230-260 million subscribers in 2024.
DIS is blessed with a deep library of unique content that includes both live sports (providing large, non-time shifted audiences) and incomparable brands including Disney, Marvel, Pixar and Lucasfilm, as well as the ABC network. The company also has a wealth of upcoming new content, expecting over 100 original titles per year, including two new Star Wars spin-off series, 10 Star Wars films, 10 Marvel films, 15 Disney and Pixar films and 15 Disney and Pixar series.
Now that the disruption in its theme park, cruise and theatrical businesses appears to be coming to an end, we believe that Disney is among the best-positioned media companies in the new landscape to combine multi-channel and DTC distribution. We also note that DIS has an extremely strong balance sheet and a growing pool of free cash flow to be used both to return to shareholders and to invest in future opportunities.”
1. Mastercard Incorporated (NYSE: MA)
Number of Hedge Fund Holders: 156
Mastercard Incorporated (NYSE: MA) is a multinational financial services company mainly specializing in digital payments. The company operates in more than 210 countries through its specialized payments processing networks.
In Q2 2021, Mastercard Incorporated (NYSE: MA) reported strong earnings due to the continued recovery in domestic and international spending. The company generated revenue of $4.5 billion, presenting a 36% year-over-year growth. Mastercard Incorporated (NYSE: MA) reported a 27% growth in its Switched Volume, compared with pre-COVID 2019 levels. Recently, JPMorgan raised its price target on Mastercard Incorporated (NYSE: MA) to $430, with an ‘Overweight’ rating on the shares. The firm expects the company to return to pre-pandemic growth in the second half of 2021 due to the growth in global electronic payments volume. Mastercard Incorporated (NYSE: MA) has gained 9.7% in the past year.
As of Q2 2021, 156 hedge funds tracked by Insider Monkey have positions in Mastercard Incorporated (NYSE: MA), worth over $17 billion.
Bretton Fund released its Q4 2020 investor letter and mentioned Mastercard Incorporated (NYSE: MA) in it. Here is what the firm has to say:
“While consumers resumed much of their spending by summer, what and how they used their Visas and Mastercards changed. For obvious reasons, people shifted to contactless payments—one of the Covid-era changes we think is permanent—and replaced travel purchases with online shopping and food delivery. Consumers spent more on their debit cards and less on their credit cards; Visa and Mastercard make more per transaction on the latter. They also make more on cross-border transactions that come mostly from international travel, which ground to a halt early in the pandemic. Visa’s and Mastercard’s earnings per share fell by 7% and 16%, respectively, compared to their usual mid-teens growth. We’re not too worried, and we think they’ll catch up nicely in the post-vaccine world. Visa’s stock returned 17.1% and Mastercard’s 20.2%.”
You can also take a look at 15 Companies That Benefitted The Most From The Pandemic and Top 10 Restaurant Stocks Under $10.
