In this article, we discuss the 5 best upside stocks to buy right now. If you want to read our detailed analysis of these stocks, go directly to the 10 Best Upside Stocks to Buy Right 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, let’s take a look at the best stocks with a lot of upside.
5. QUALCOMM Incorporated (NASDAQ: QCOM)
Number of Hedge Fund Holders: 73
QUALCOMM Incorporated (NASDAQ: QCOM) is a California-based semiconductor manufacturing company. It was founded in 1985 and is ranked fifth on our list of 10 best upside stocks to buy right now. The stock has returned more than 47% to investors over the course of the past twelve months. The products marketed by the company are used in mobile devices, computers, as well as 5G infrastructure across the globe.The company also offers other software and services related to wireless technology.
On April 28, QUALCOMM Incorporated (NASDAQ: QCOM) reported earnings results for the second fiscal quarter, posting earnings per share of $1.90, beating market predictions by $0.23. The revenue over the period was close to $8 billion, up 52% year-on-year.
Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in QUALCOMM Incorporated (NASDAQ: QCOM) with 3.5 million shares worth more than $472 million.
In its Q1 2021 investor letter, Alger, an asset management firm, highlighted a few stocks and QUALCOMM Incorporated (NASDAQ: QCOM) was one of them. Here is what the fund said:
“Long position Qualcomm Inc. were among the top detractors from performance. Qualcomm is a leading semiconductor company with strong positions in telecommunications end markets that position the company as a primary beneficiary of the innovative 5G network standard roll out. Qualcomm is acknowledged as having the best technology specs for 5G chip sets as evidenced by signing up all 75 major OEMs including Apple. Additionally, beyond handsets, Qualcomm has meaningful growth drivers, including the Internet of Things, automobiles, industrials and gaming that provide the company with potential for generating increased earnings.
While Qualcomm was a notable positive contributor to the portfolio’s absolute and relative returns in 2020, during the first quarter, the share price declined and the position detracted from performance. Market demand for chips has been strong; however, Qualcomm hasn’t been able to fully exploit the demand as it is capacity constrained. Expectations were high for Qualcomm and while the quarter generally exceeded consensus estimates and forward estimates did rise, the street was anticipating a stronger positive surprise. We believe the production capacity constraints should abate in the second half of this year.”
4. Apple Inc. (NASDAQ: AAPL)
Number of Hedge Fund Holders: 127
Apple Inc. (NASDAQ: AAPL) is a California-based technology firm. It is placed fourth on our list of 10 best upside stocks to buy right now. The company’s shares have offered investors returns exceeding 43% over the past twelve months. Apple makes and sells consumer electronics, software, and online services. It is the largest technology company in the world in terms of market capitalization. It posted more than 270 billion in annual revenue last year. The company is reportedly also investing heavily in driverless and clean energy automotive.
Apple Inc. (NASDAQ: AAPL) posted earnings results for the second fiscal quarter on April 28, reporting earnings per share of $1.40, beating market predictions by $0.42. The revenue over the period was close to $90 billion, up 53% year-on-year.
At the end of the first quarter of 2021, 127 hedge funds in the database of Insider Monkey held stakes worth $130 billion in Apple Inc. (NASDAQ: AAPL), down from 146 in the preceding quarter worth $142 billion.
In its Q1 2021 investor letter, Distillate Capital, an asset management firm, highlighted a few stocks and Apple Inc. (NASDAQ: AAPL) was one of them. Here is what the fund said:
“Apple is an even more notable situation and one that highlights our free cash valuation methodology and bears further discussion given its Q3 ‘20 sale from our strategy. For an extended period, Apple was extraordinarily inexpensive on a free cash flow basis and was the largest position in our strategy, exceeding 5% of the portfolio.”
3. Shopify Inc. (NYSE: SHOP)
Number of Hedge Fund Holders: 91
Shopify Inc. (NYSE: SHOP) is a Canada-based ecommerce firm. It was founded in 2006 and is ranked third on our list of 10 best upside stocks to buy right now. The company’s shares have offered investors returns exceeding 65% over the course of the past twelve months. The firm provides businesses with various sales channels, including online stores, mobile platforms, physical retail, social media storefronts, mobile-based applications, and others. It also offers inventory and payments services.
On April 28, Shopify Inc. (NYSE: SHOP) reported earnings for the first three months of 2021, posting earnings per share of $2.01, beating market predictions by $1.26. The revenue over the period was more than $988 million, up 110% year-on-year.
Out of the hedge funds being tracked by Insider Monkey, Connecticut-based investment firm Lone Pine Capital is a leading shareholder in Shopify Inc. (NYSE: SHOP) with 1.7 million shares worth more than $1.8 billion.
In its Q4 2020 investor letter, RGA Investment Advisors, an asset management firm, highlighted a few stocks and Shopify Inc. (NYSE: SHOP) was one of them. Here is what the fund said:
“While we are pleased with the results of these specific purchases, we made a huge mistake of omission at that time. This mistake will likely be one of the biggest we ever make in our careers. Specifically, we did deep work on Shopify and loved everything about the business qualitatively. Unfortunately, we ultimately found ourselves unable to get comfortable with the numbers.
We built our model up from the key performance indicators (KPIs) that drive revenues. Our last save of the model dated 8/3/2016 looked as follows: (Page 2). These numbers seemed right from everything we understood about the company. While we tend not to rely on sell-side consensus estimates before finishing our own workup of the business, we do give them a look once we feel comfortable with how we have approached our analysis as it is often helpful to get a sense of what the average participant in the market expects the business to do. With Shopify, the sell-side consensus was so far from where our numbers were shaking out, it seemed almost impossible that we were basing our analysis on the same underlying information. Our natural next step was thus to take the sell-side consensus data and work backwards to figure out the implied expectations on each of the key revenue drivers. Here is what the sell-side consensus looked like as at the time: (Page 2).
Shopify’s actual revenues for 2016-2018 ended up being $389m, $673m and $1,073m. In other words, not only were we justifiably far more optimistic than the consensus estimate, but we also were far too conservative in terms of how the company actually performed...” (read the complete letter here)
2. Suncor Energy Inc. (NYSE: SU)
Number of Hedge Fund Holders: 33
Suncor Energy Inc. (NYSE: SU) is a Canada-based energy company. It was founded in 1917 and is placed second on our list of 10 best upside stocks to buy right now. The company mines and refines oil and markets petroleum products. It also trades in natural gas and related products. Suncor has been stepping up investments in the clean energy business in recent years, especially in wind farms. It has a market cap of over $38 billion and posted more than $19 billion in revenue in 2020.
On May 4, Suncor Energy Inc. (NYSE: SU) posted earnings results for the first quarter, reporting earnings per share of C$0.49, beating market estimates by C$0.09. On May 3, the firm declared a quarterly dividend of C$0.21 per share, in line with previous.
At the end of the first quarter of 2021, 33 hedge funds in the database of Insider Monkey held stakes worth $1 billion in Suncor Energy Inc. (NYSE: SU), up from 25 in the preceding quarter worth $686 million.
In its Q2 2020 investor letter, Brown Advisory, an asset management firm, highlighted a few stocks and Suncor Energy Inc. (NYSE: SU) was one of them. Here is what the fund said:
“We eliminated our small holding in Cimarex Energy in favor of consolidating our oil-related investments by adding to existing holding Suncor Energy, which we believe is a stronger company to own with oil prices at a historic low.”
1. Micron Technology (NASDAQ: MU)
Number of Hedge Fund Holders: 100
Micron Technology (NASDAQ: MU) is an Idaho-based firm that makes and sells memory storage equipment used in electronic devices. It is ranked first on our list of 10 best upside stocks to buy right now. The stock has returned more than 51% to investors over the past year. Some of the products sold by the firm include random access memory, flash memory, portable storage devices, and others. The products made by the firm are used by cloud servers, graphics companies, and networking clients.
In earnings results for the second fiscal quarter, posted on March 31, Micron Technology (NASDAQ: MU) reported earnings per share of $0.98, topping market predictions by $0.03. The revenue over the period was more than $6 billion, up 30% year-on-year.
At the end of the first quarter of 2021, 100 hedge funds in the database of Insider Monkey held stakes worth $7.6 billion in Micron Technology (NASDAQ: MU), the same as in the preceding quarter worth $8.1 billion.
In its Q1 2021 investor letter, Bonsai Partners, an asset management firm, highlighted a few stocks and Micron Technology (NASDAQ: MU) was one of them. Here is what the fund said:
“Micron is a manufacturer of memory semiconductor chips. Micron appreciated 17.3% during the quarter.
With the semiconductor cycle in full swing, sentiment continued to improve for major DRAM and NAND suppliers. Spot pricing for DRAM continues its upward march due to supply shocks across the industry and sustained demand levels that continue to outstrip supply.
As a result, Micron showed improving results for the fiscal first quarter, raised guidance intra-quarter for the fiscal second quarter, and offered strong guidance for the fiscal third quarter in both growth and margins.
While the cyclical nature of DRAM hasn’t changed, the cycles themselves continue to become more benign, leading to long-term economic improvement across these businesses. Micron is now continuously profitable, with industry players in a dramatically stronger position than even just five years ago.
The biggest negative surprise in the quarter came from Micron’s exit from its 3D XPoint hybrid memory business. The company also announced its decision to sell its accompanying Utah fab. Fortunately, this development does not alter the investment thesis much since 3D XPoint was an option ticket for future growth. While it’s unfortunate this product didn’t pan out, now is an excellent time to sell a fab, so perhaps it is a blessing in disguise?”
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.
