In this article, we present the 5 best stocks for beginners with little money. If you want to find out our methodology as well as a more comprehensive list, check out 11 Best Stocks For Beginners With Little Money. Our article used positive analyst ratings to determine the stocks selected for this article. If you are interested in Insider Monkey’s Research Director’s top stock picks, please consider subscribing to our Premium Readership Newsletter. He holds a Ph.D. in financial economics and his stock picks in our monthly newsletter returned 147% since March 2017 vs. 74% gain for the S&P 500 ETF (SPY) during the same period. At the very least you should subscribe to our free daily newsletter by entering your email address below to find out which stocks hedge funds are buying on a daily basis:
5. Avantor, Inc. (NYSE:AVTR)
Number of Hedge Fund Holders: 51
Share Price as of October 26: $20.99
Avantor, Inc. (NYSE:AVTR) is a Pennsylvania-based company that provides materials, equipment, and consumables to customers in biopharma, healthcare, education, government, advanced technologies, and applied materials industries in the Americas, Europe, Asia, the Middle East, and Africa. Avantor, Inc. (NYSE:AVTR) is one of the top stocks for beginners.
On October 5, Citi analyst Patrick Donnelly upgraded Avantor, Inc. (NYSE:AVTR) to Buy from Neutral with an unchanged price target of $28. The analyst said there is a “valuation disconnect” following the stock’s “significant underperformance.” He sees a “potential clearing event” for the stock if the management sets a “more appropriate floor” for fiscal 2023 organic revenue growth guidance on the lower end of the firm’s long-term 4%-6% organic growth target.
Among the hedge funds tracked by Insider Monkey, 51 funds reported owning stakes worth $2.08 billion in Avantor, Inc. (NYSE:AVTR) at the end of June 2022, compared to 57 funds in the earlier quarter worth $2.16 billion. Robert Pohly’s Samlyn Capital is the leading position holder in the company, with 7.75 million shares valued at $241 million.
Here is what ClearBridge SMID Cap Growth Strategy has to say about Avantor, Inc. (NYSE:AVTR) in its Q3 2021 investor letter:
“Avantor, which distributes proprietary, higher-margin consumables products to life science research companies, has benefited from accretive research & development as well as paying down debt, which has contributed to increased margins and strong stock performance.”
4. PG&E Corporation (NYSE:PCG)
Number of Hedge Fund Holders: 51
Share Price as of October 26: $15.22
PG&E Corporation (NYSE:PCG) engages in the sale and delivery of electricity and natural gas to customers in northern and central California. It generates electricity using nuclear, hydroelectric, fossil fuel-fired, fuel cell, and photovoltaic sources. On October 7, RBC Capital analyst Shelby Tucker raised the price target on PG&E Corporation (NYSE:PCG) to $19 from $16 and kept an Outperform rating on the shares. The analyst is “encouraged” by the firm’s wildfire mitigation efforts and its inclusion in the S&P 500. PG&E Corporation (NYSE:PCG) is one of the best beginner stocks to invest in.
Among the hedge funds tracked by Insider Monkey, PG&E Corporation (NYSE:PCG) was part of 51 hedge fund portfolios at the end of the second quarter of 2022, with collective stakes worth $2.7 billion, compared to 51 funds in the last quarter worth $3.2 billion. Dan Loeb’s Third Point is the biggest stakeholder of the company, with 65.4 million shares valued at $652.7 million.
Here is what Third Point specifically said about PG&E Corporation (NYSE:PCG) in its Q3 2022 investor letter:
“Since we wrote about PG&E Corporation (NYSE:PCG) in May, the Company has continued to close the valuation gap with its regulated peer group. Over the third quarter PCG’s stock rose 25% versus a 6% decline in the XLU (a proxy for the S&P 500 Utilities Sector). Outperformance was driven by the S&P 500 indexing announcement and continued execution by Patti Poppe, the recently hired CEO, and her team. Management has focused its efforts on mitigating physical and financial risk by building in layers of protection against catastrophic wildfires, financial uncertainty, and rate-payer volatility. Importantly for a utility company, Ms. Poppe has a plan to make much needed investments in safety, reliability, and service quality via capital investment while simultaneously reducing operating expenses.
Despite the recent move, we are optimistic about the Company’s prospects with industry leading 10% EPS growth and likely dividend reinstatement in 2023. PG&E, which currently trades at a 6x discount to peers on ’23 earnings, should continue to re-rate as investors become more familiar with the enhanced regulatory framework under AB1054 and build further confidence in management’s execution capabilities.”
3. AT&T Inc. (NYSE:T)
Number of Hedge Fund Holders: 55
Share Price as of October 26: $18.05
AT&T Inc. (NYSE:T), an American provider of telecommunications, media, and technology services worldwide, is one of the best beginner stocks to buy now. On October 20, AT&T Inc. (NYSE:T) reported its Q3 results, posting earnings per share of $0.68 and a revenue of $30.04 billion, exceeding market estimates by $0.06 and $170.54 million, respectively. On September 30, the company declared a quarterly dividend of $0.2775 per share, in line with previous. The dividend is payable on November 1, to shareholders of record on October 10. The forward yield was 7.19%.
Raymond James analyst Frank Louthan on October 24 upgraded AT&T Inc. (NYSE:T) to Strong Buy from Outperform with an unchanged price target of $24. The analyst believes AT&T Inc. (NYSE:T) will outperform Verizon Communications Inc. (NYSE:VZ) over the next few months based on the present operating performance of the two businesses, the analyst told investors in a research note.
According to Insider Monkey’s Q2 data, 55 hedge funds were bullish on AT&T Inc. (NYSE:T), compared to 74 funds in the last quarter. D E Shaw is a significant position holder in the company, with 11.4 million shares worth about $240 million.
Here is what Chartwell Investment Partners has to say about AT&T Inc. (NYSE:T) in its Q2 2022 investor letter:
“In the Dividend Equity accounts, the three best performers in Q2 include AT&T (NYSE:T, 2.5%), up 17.1%. AT&T completed the spin off of the WarnerMedia business (HBO, CNN, etc.), and the market seemed to like the “back-to-basics” approach. Also, the telco business is expected to do relatively well in an inflationary environment.”
2. CSX Corporation (NASDAQ:CSX)
Number of Hedge Fund Holders: 63
Share Price as of October 26: $29.00
CSX Corporation (NASDAQ:CSX) is a Florida-based company that provides rail-based freight transportation services. The company transports chemicals, agricultural products, automotive, minerals, forest products, fertilizers, metals, and equipment. On October 6, CSX Corporation (NASDAQ:CSX) declared a quarterly dividend of $0.10 per share, which is payable on December 15 to shareholders of record on November 30. The company also posted market-beating Q3 2022 results, with revenue increasing on the back of higher fuel surcharge, pricing gains, a 2% boost in volumes, and an increase in storage and other revenues.
On October 24, Deutsche Bank analyst Amit Mehrotra maintained a Buy rating on CSX Corporation (NASDAQ:CSX) but lowered the price target on the shares to $36 from $41. The analyst said CSX Corporation (NASDAQ:CSX) continues to operate at a higher level than Union Pacific Corporation (NYSE:UNP), despite both companies facing increased costs from network inefficiencies.
According to Insider Monkey’s data, 63 hedge funds were long CSX Corporation (NASDAQ:CSX) at the end of June 2022, compared to 72 funds in the earlier quarter. Eric W. Mandelblatt’s Soroban Capital Partners is the largest stakeholder of the company, with 52.60 million shares worth $1.5 billion.
Here is what ClearBridge Investments Global Infrastructure Value Strategy has to say about CSX Corporation (NYSE:CSX) in its Q4 2021 investor letter:
“On a regional basis, the U.S. and Canada were the top contributors to quarterly performance, of which U.S. rail operator CSX was among the lead performers. CSX is one of five leading North American rail companies, with over 21,000 miles of rail, covering 23 states and 40+ ports. CSX is engaged in the transportation of rail freight in the Southeast, East, and Midwest via interchange with other rail carriers, to and from the rest of the U.S. and Canada. CSX performed well during the quarter after the company beats market expectations on its third-quarter results. The beats were largely driven by strong pricing, which could be hitting record highs, and healthy commodity/coal volume driven by the current energy crisis.”
1. Uber Technologies, Inc. (NYSE:UBER)
Number of Hedge Fund Holders: 129
Share Price as of October 26: $28.47
Uber Technologies, Inc. (NYSE:UBER) is one of the premier stocks for beginners to invest in. On October 19, Uber Technologies, Inc. (NYSE:UBER) announced that it has launched Uber Journey Ads, which will use first-party data and insights from Uber’s mobility and delivery businesses and place ads on the Uber and Uber Eats apps.
On October 24, Cowen analyst John Blackledge maintained an Outperform rating on Uber Technologies, Inc. (NYSE:UBER) but slashed the firm’s price target on the shares to $70 from $76. The analyst expects Uber Technologies, Inc. (NYSE:UBER)’s Q3 2022 Gross Bookings at the high end of the guidance, supported by the continuous recovery in Mobility and expansion of core EBITDA margins.
According to Insider Monkey’s data, Uber Technologies, Inc. (NYSE:UBER) was part of 129 hedge fund portfolios at the end of June 2022, compared to 144 funds in the preceding quarter. Ken Fisher’s Fisher Asset Management is the leading position holder in the company, with 24.5 million shares worth about $501 million.
Here is what RiverPark Large Growth Fund has to say about Uber Technologies, Inc. (NYSE:UBER) in its Q3 2022 investor letter:
“Uber was our top contributor for the quarter on better-than-expected 2Q results, and 3Q EBITDA guidance that was well ahead of Street estimates. The company reported 33% Gross Bookings growth from both the continued recovery of Mobility Gross Bookings, up 55% year over year, and the continuation of Delivery Gross Bookings growth, up 7% year over year. Overall, revenue grew 105% year over year to $8 billion, generating $364 million of adjusted EBITDA, up $873 million year over year. Management guided to 25%-30% gross bookings growth and adjusted EBITDA of $440-$470 million for 3Q. Significantly, FCF was positive at $382 million, up $780 million year over year, and remains on track to be positive for the year allowing the company to self-fund future growth.
UBER remains the undisputed global leader in ride sharing, with greater than 50% share in every major region in which it operates. The company is also a leader in food delivery, where it is number one or two in the more than 25 countries in which it operates. Moreover, after a history of losses, the company is now solidly profitable with the expectation of substantial margin expansion and free cash flow generation to come. We view UBER as more than just ride sharing and food delivery, but also as a global mobility platform with the ability to sell to its more than 120 million users (by comparison, Amazon Prime has 200 million members) and penetrate new markets of on-demand services, such as grocery delivery, truck brokerage (the company had $1.8 billion in Freight revenue for 2Q22), and worker staffing for shift work. Given its $10 billion of cash and investments against $9 billion of debt, the company today has an enterprise value of $57 billion indicating that UBER trades at only 1.5x next year’s estimated revenue.”
You can also take a look at 11 Best REIT Stocks To Invest In and Top Small Cap Stocks With Huge Growth Potential.
