In this article, we discuss the 5 best up and coming stocks to invest in. If you want to read our detailed analysis of these stocks, go directly to the 10 Best Up and Coming Stocks to Invest In.
5. Upwork Inc. (NASDAQ: UPWK)
Number of Hedge Fund Holders: 32
Upwork Inc. (NASDAQ: UPWK) stock has returned 301% to investors over the past year. It is ranked fifth on our list of 10 best up and coming stocks to invest in. The firm owns and operates an online talent marketplace. It is headquartered in California. On May 18, the share price of the firm jumped close to 3% after it announced the launch of a new product, named Talent Scout, that would connect businesses with pre-vetted expert talent selected by specialized recruiters from the company. The new product is initially available in select countries only.
On July 1, investment advisory BTIG reiterated a Buy rating on Upwork Inc. (NASDAQ: UPWK) stock and raised the price target to $76 from $65, underlining that the new growth plans by the firm would drive revenue increases in the coming quarters.
At the end of the first quarter of 2021, 32 hedge funds in the database of Insider Monkey held stakes worth $530 million in Upwork Inc. (NASDAQ: UPWK), down from 34 in the preceding quarter worth $548 million.
In its Q4 2020 investor letter, Spree Capital Advisers, an asset management firm, highlighted a few stocks and Upwork Inc. (NASDAQ: UPWK) was one of them. Here is what the fund said:
“Early in the fourth quarter we meaningfully increased our position size in Upwork (UPWK). Upwork is a global employment marketplace that enables businesses to vet, hire, and manage talent as part of their distributed workforce. Upwork facilitates labor and demand side connectivity on a global scale by providing the infrastructure to create trust and to streamline talent sourcing, contracting, analysis and payment. Freelancers benefit from having a reputation ranking system that feeds their marketing channels, allowing them to have access to quality, flexible work and on time compensation. Businesses on the demand side benefit by having extensive access to specialized talent, enabling faster and more cost effective hiring, and by having the strategic optionality inherent in the ability to flex a portion of their workforce based on changing demand requirements.
Labor markets have long had unnecessary frictional inefficiencies driven by regional talent imbalances and long-term trends of increased specialization of labor and declining labor mobility. Meanwhile, innovations in communication and global connectivity have transformed the way work gets done. Knowledge workers seek the flexibility and geographic advantages of on demand work, but the barrier to adoption has historically been established habits and work standards on the demand side. The Covid-19 global pandemic has broken down those barriers. We see three steps in the path to enterprise usage and shareholder value creation…” (Click here to see the full text)
4. Marvell Technology, Inc. (NASDAQ: MRVL)
Number of Hedge Fund Holders: 33
Marvell Technology, Inc. (NASDAQ: MRVL) is placed fourth on our list of 10 best up and coming stocks to invest in. The company’s shares have returned 67% to investors over the past twelve months. The firm makes and sells integrated circuits technology. On June 7, the firm posted earnings for the first quarter, reporting earnings per share of $0.29, beating market predictions by $0.02. The revenue over the period was more than $830 million, up over 20% year-on-year and beating estimates by close to $15 million.
On July 6, investment advisory KeyBanc maintained an Overweight rating on Marvell Technology, Inc. (NASDAQ: MRVL) stock and raised the price target to $65 from $60, highlighting the strengthening enterprise demand for 5G in the ratings update.
At the end of the first quarter of 2021, 33 hedge funds in the database of Insider Monkey held stakes worth $683 million in Marvell Technology, Inc. (NASDAQ: MRVL), down from 40 in the preceding quarter worth $556 million.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Marvell Technology, Inc. (NASDAQ: MRVL) was one of them. Here is what the fund said:
“We also purchased Marvell Technology Group, in the IT sector, a semiconductor maker with exposure to the fast growing 5G and data center markets whose shares sold off in the latest rotation out of growth stocks. Marvell just acquired data center supplier Inphi, a name we have held in other ClearBridge portfolios, which should increase the chipmaker’s cross-selling opportunities in a strong demand environment for chips.”
3. Take-Two Interactive Software, Inc. (NASDAQ: TTWO)
Number of Hedge Fund Holders: 41
Take-Two Interactive Software, Inc. (NASDAQ: TTWO) stock has returned 8% to investors over the past year. It is ranked third on our list of 10 best up and coming stocks to invest in. The company markets interactive entertainment solutions. It is based in New York. On July 1, the firm announced that it had purchased Dynamixyz, a facial animation services firm focusing on video. The financial terms of the deal were not disclosed. The new would work with the publishing and studio labels of Take-Two.
On June 24, investment advisory MoffettNathanson initiated coverage of Take-Two Interactive Software, Inc. (NASDAQ: TTWO) stock with a Buy rating and a price target of $214, underlining that the firm had the best IP collection of franchises in the country.
Out of the hedge funds being tracked by Insider Monkey, Boston-based investment firm Arrowstreet Capital is a leading shareholder in Take-Two Interactive Software, Inc. (NASDAQ: TTWO) with 755,464 shares worth more than $133 million.
In its Q1 2020 investor letter, Sextant Mutual Funds, an asset management firm, highlighted a few stocks and Take-Two Interactive Software, Inc. (NASDAQ: TTWO) was one of them. Here is what the fund said:
“We mentioned the Xbox, but gamers also need games. We invested in Take-Two last year on the thesis that gaming demonstrates attractive long-term growth opportunities and online distribution would reduce costs and improve margins. With a ready-made excuse to spend eight hours in front of a screen in the basement, such online game delivery must have helped Take-Two.”
2. Five Below, Inc. (NASDAQ: FIVE)
Number of Hedge Fund Holders: 43
Five Below, Inc. (NASDAQ: FIVE) is a Philadelphia-based specialty value retailer. It is placed second on our list of 10 best up and coming stocks to invest in. The company’s shares have offered investors returns exceeding 69% over the course of the past year. The firm has a market cap of over $10 billion and was founded in 2002. The company recently partnered with Instacart, the leading online grocery platform in North America. The move will help the firm expand reach in the region.
On June 3, investment advisory R5 Capital initiated coverage of Five Below, Inc. (NASDAQ: FIVE) stock with a Buy rating and a price target of $251.
Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Five Below, Inc. (NASDAQ: FIVE) with 807,965 shares worth more than $154 million.
In its Q4 2020 investor letter, Harding Loevner, an asset management firm, highlighted a few stocks and Five Below, Inc. (NASDAQ: FIVE) was one of them. Here is what the fund said:
“Throughout the year, we tried methodically to rebalance the portfolio between “stay at home” and “return to normal” whenever the market appeared too pessimistic or optimistic about the sustainability of recent, pandemic-driven trends. As the year went on, we found ourselves tilting more towards “return to normal.” We established a new position in US retailer Five Below, a discount chain built around a rather simple concept: fill nondescript big-box locations with as many as possible items priced under US$5 that can tickle the imagination of an American teen or tween. As “pre-2020” as that may sound, we were impressed by the company’s quick resumption of strong same-store sales growth after the lockdowns early in the year. Clearly, Five Below offers a value and entertainment proposition that e-commerce is not able to satisfy and which we can see ourselves “sitting” on potentially for years to come.”
1. Zendesk, Inc. (NYSE: ZEN)
Number of Hedge Fund Holders: 45
Zendesk, Inc. (NYSE: ZEN) is ranked first on our list of 10 best up and coming stocks to invest in. The stock has offered investors returns exceeding 51% over the course of the past twelve months. The firm markets software development services and is based in California. In earnings results for the first quarter, posted on April 29, the firm reported earnings per share of $0.17, beating market predictions by $0.05. The revenue over the period was close to $300 million, up over 25% year-on-year.
On May 27, investment advisory UBS upgraded Zendesk, Inc. (NYSE: ZEN) stock to Buy from Neutral and raised the price target to $190 from $171, noting that the firm was capable of returning to an over 30% growth profile.
At the end of the first quarter of 2021, 45 hedge funds in the database of Insider Monkey held stakes worth $1.4 billion in Zendesk, Inc. (NYSE: ZEN), down from 58 in the previous quarter worth $1.8 billion.
In its Q4 2020 investor letter, Wasatch Ultra Growth Fund, an asset management firm, highlighted a few stocks and Zendesk, Inc. (NYSE: ZEN) was one of them. Here is what the fund said:
“Zendesk, Inc. (ZEN) was also a top contributor. The company provides business software using the software-as-a-service (SaaS) model. Zendesk has experienced strong demand throughout the Covid19 pandemic from customers in e-commerce, as well as from other businesses with employees working from home. Additionally, demand from clients in the travel and hospitality industries has picked up as global economies have begun to reopen. Adjusted earnings per share rose 42% in the company’s most recent quarter on revenue growth of 24% compared to the same quarter a year ago. An improved sales outlook from Zendesk’s management also helped lift the stock.”
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