In this article, we will discuss the 5 best stocks under $30 according to Ravee Mehta’s Nishkama Capital. If you want to read our detailed analysis of these stocks, go directly to the 10 Best Stocks Under $30 According to Ravee Mehta’s Nishkama Capital.
5. Magnite, Inc. (NASDAQ:MGNI)
Nishkama Capital’s Stake Value: $8.8 million
Percentage of Nishkama Capital’s 13F Portfolio: 2%
Stock Price as of October 27: $25.29
Number of Hedge Fund Investors: 29
Magnite, Inc. (NASDAQ:MGNI) is one of the largest independent advertisement platforms in the world. The online advertising company is helping brands reach millions of consumers globally while maintaining their privacy.
The ad-tech industry has come under immense pressure following the impact of Apple Inc’s (NASDAQ:AAPL) privacy changes on its advertising business. Ad platforms would now require users to opt-in for targeted advertising in iOS 14. Previously, users were targeted with ads without requiring them to opt-in themselves.
This has also caused the analysts’ view to change as well. In a note issued on October 26, Jason Kreyer at Craig-Hallum reiterated the Buy rating on Magnite Inc. (NASDAQ:MGNI) but lowered the target price from $52 to $45. He highlighted that Magnite’s branded advertising services would be less adversely impacted as compared to direct response offerings due to change in Apple’s ecosystem.
Magnite Inc. (NASDAQ:MGNI) was mentioned in the Q2 investor letter of Alger, an investment management firm. Here’s what the fund said:
“Magnite provides an advertising supply side platform for publishers. The technology helps publishers such as network television stations or cable news providers automate the sale of digital advertising inventory across different formats and channels, like desktop, mobile, video, audio, connected TV and over-the-top TV. Publishers monetize their digital advertising inventory by using Magnite’s platform to access a global market of ad buyers, including advertising agencies that use supply side platforms. Magnite also helps sellers decrease costs and protect their brands and user experience. Magnite receives ad inventory from sellers and optimizes publishers’ revenue yields by processing the highest buyer bids. Currently, Magnite keeps approximately 10% of ad spend as revenue (i.e. take rate) and passes on the remainder of the ad spend to publishers. Magnite’s clients include many of the world’s leading publishers of websites and mobile applications and the company believes that its platform reaches approximately 1billion individuals globally.
Shares of Magnite underperformed in the second quarter due to the growth market selloff and slower-than-expected growth in connected TV during the first three months of this year. We believe the 32% growth in connected TV was below expectations and due to a one-time issue with one of the company’s publishing partners that ran out of advertising inventory. Management noted the issue has been fixed and the company saw strong reaccelerating growth in April. Additionally, we believe Magnite’s recent acquisition of video advertising company SpotX will significantly bolster the company’s positioning within connected TV, a high-growth area of the digital advertising market that is taking share from linear TV ad budgets.”
4. Celestica Inc. (NYSE:CLS)
Nishkama Capital’s Stake Value: $10.98 million
Percentage of Nishkama Capital’s 13F Portfolio: 2.5%
Stock Price as of October 27: $9.80
Number of Hedge Fund Investors: 14
Celestica Inc. (NYSE:CLS) is a Canadian multinational corporation involved in providing design, manufacturing, and supply chain solutions during product development. According to Insider Monkey’s database comprising 873 hedge funds, only 14 hedge funds have gobbled a combined stake of $123.2 million in Celestica Inc. (NYSE:CLS).
In September 2021, Jim Suva at Citi maintained a Sell rating on Celestica Inc. (NYSE:CLS) stock but increased the target price from $8 to $8.50 following the positive development of acquiring privately-held PCI Limited.
3. Houghton Mifflin Harcourt Company (NASDAQ:HMHC)
Nishkama Capital’s Stake Value: $14.9 million
Percentage of Nishkama Capital’s 13F Portfolio: 3.40%
Stock Price as of October 27: $13.59
Number of Hedge Fund Investors: 21
Houghton Mifflin Harcourt Company (NASDAQ:HMHC) is a leading Boston-based book publisher of assessments, instructional technology materials, fiction and non-fiction books, textbooks, and reference work. The corporation is considered a leader worldwide in the provision of K-12 education content. The company has been breathed a new life following the disposal of the highly leveraged Media division to News Corp. This has increased the focus on the education business in the form of proceeds from the disposal, which has aided the company in restructuring its existing debt.
Investment management firm Laughing Water Capital LP shared its stance on Houghton Mifflin Harcourt Company (NASDAQ: HMHC) in its Q2 2021 investor letter. Here’s what the fund said:
“HMHC is the leading provider of instructional materials to students in grades K-12 in the U.S. At the end of this letter you will find a longer writeup, but in brief I believe the combination of a newly cleaned up balance sheet, slimmed down operating structure, a Covid induced acceleration of digital learning, and billions of dollars in federal stimulus set to flood the education world has put HMHC in position to gush cash over the next few years… but the market has failed to appreciate these changes. Given the pending onslaught of federal stimulus dollars I think it will be very difficult to lose money in this investment, and if the company reinvests this cash wisely and the market recognizes how this business has evolved, there is a path to multi-bagger returns looking out a few years.”
2. Outfront Media Inc. (REIT) (NYSE:OUT)
Nishkama Capital’s Stake Value: $21.7 million
Percentage of Nishkama Capital’s 13F Portfolio: 4.95%
Stock Price as of October 27: $24.93
Number of Hedge Fund Investors: 31
Outfront Media Inc. (REIT) (NYSE:OUT) is a leading outdoor media company with a presence in the United States and Canada. The company is in the out-of-home (OOH) marketing industry and operates billboards and transit displays. As the company generates significant rental income from its billboards and transit displays, it represents itself as a REIT to its investors.
The company announced a quarterly dividend of 10 cents on October 26. This translates into a forward dividend yield of 1.57%.
1. Avid Technology, Inc. (NASDAQ:AVID)
Nishkama Capital’s Stake Value: $22.7 million
Percentage of Nishkama Capital’s 13F Portfolio: 5.17%
Stock Price as of October 27: $28.52
Number of Hedge Fund Investors: 21
Avid Technology, Inc. (NASDAQ:AVID) is a global media company that is involved in multiple levels of the media value chain ranging from creating, managing, storing, distributing, and monetizing various types of content.
Jack Vander Aarde at Maxim maintained a Buy rating on Avid Technology Inc. (NASDAQ:AVID) stock but increased the target price from $40 to $45 following the Q2 2021 results in early August.
You can also take a peek at the Yale University Stock Portfolio: Top 10 Picks and 10 Stocks That Beat Profit Expectations.
