5 Growth Stocks To Buy That Are Too Cheap To Ignore

In this piece, we will take a look at the five growth stocks that are too cheap to ignore. For more stocks, head on over to 10 Growth Stocks To Buy That Are Too Cheap To Ignore.

5. The Trade Desk, Inc. (NASDAQ:TTD)

Number of Hedge Fund Holders: 34

The Trade Desk, Inc. (NASDAQ:TTD) is a cloud service company that provides advertisers with the opportunity to run programmatic advertisement campaigns across computers, connected televisions, and smartphones. The firm is headquartered in Ventura, California.

The Trade Desk, Inc. (NASDAQ:TTD) is widely expected to deliver strong third quarter results in November 2022, with analysts expecting the firm to rake in $386 million in revenue to mark 28% growth – at a time when the global advertising industry is slowing down, as evident by SNAP’s painful share price bloodbath. Analysts also expect the firm to deliver 33% annual revenue growth, as it is helped by the midterm elections in the United States. The Trade Desk, Inc. (NASDAQ:TTD) also beat analyst EPS and revenue estimates in this year’s first and second quarters.

Craig-Hallum set a Buy rating and a $7 share price target for the company in October 2022, stressing that it has delivered strong quarterly growth. 34 out of the 895 hedge funds polled by Insider Monkey during this year’s second quarter had invested in the firm.

The Trade Desk, Inc. (NASDAQ:TTD)’s largest investor is Nancy Zevenbergen’s Zevenbergen Capital Investments which owns 3.2 million shares that are worth $138 million.

Polen Capital mentioned the company in its Q3 2022 investor letter. Here is what the fund said:

“The top absolute contributors to the Portfolio’s performance over the quarter included Wingstop, The Trade Desk, Inc. (NASDAQ:TTD), and Paycom.

The Trade Desk, the leading independent demand-side platform for programmatic advertising, delivered very strong results in the quarter which were especially impressive given the difficult year-over-year growth comparisons and the weakness that many of its ad tech peers had been experiencing more recently. This is a business that benefits from solid secular tailwinds amidst a difficult macro backdrop and we believe the company has a particularly long runway ahead of it with the ability to compound sales and EPS(earnings per share) at >25-30% for many years.”

4. United Parcel Service, Inc. (NYSE:UPS)

Number of Hedge Fund Holders: 38

United Parcel Service, Inc. (NYSE:UPS) is a package delivery and logistics services provider that is headquartered in Atlanta, Georgia, the United States. The company delivers parcels, letters, and packages, and it also offers truckload services and supply chain solutions.

United Parcel Service, Inc. (NYSE:UPS) is the strong performer in the logistics sector this year, as its shares have significantly outperformed its rival FedEx and have mostly tracked the S&P 500 index. The firm’s third quarter saw it grow its revenue by 4%, operating profit by 6%, and earnings per share by a strong 10%. This came at a time when United Parcel Service, Inc. (NYSE:UPS)’s volumes declined by 1.5% annually.

United Parcel Service, Inc. (NYSE:UPS) pays a $1.52 dividend for a 3.62% yield. Insider Monkey’s Q2 2022 survey of 895 hedge funds outlined that 38 had invested in the firm.

United Parcel Service, Inc. (NYSE:UPS)’s largest investor is Phill Gross and Robert Atchinson’s Adage Capital Management which owns 764,900 shares that are worth $139 million.

Mayar Capital mentioned the company in its Q2 2022 investor letter. Here is what the fund said:

“UPS has been a beneficiary of the pandemic-related shift to e-commerce. Revenues increased 15% in the year, with strong leverage in the business boosting operating profit by al- most 67%. Management is focusing on a ‘Better not Bigger’ strategy for the business and divested the UPS Freight business early in the year. Mean- while, the company is expected to increase distributions to shareholders in 2022, from both dividends and share buybacks.”

3. Lululemon Athletica Inc. (NASDAQ:LULU)

Number of Hedge Fund Holders: 50

Lululemon Athletica Inc. (NASDAQ:LULU) is a sportswear and athletic apparel company. The firm sells shorts, tops, jackets, and pursuits. It is headquartered in Vancouver, Canada.

Lululemon Athletica Inc. (NASDAQ:LULU) is one of the fastest growing apparel companies in the industry. The firm has grown its sales in the U.S., Canada, and globally by 28%, 24%, and 35%, respectively, in its second quarter, and its trailing twelve month sales growth for the regions stands at 25%, 34%, and 23%. Additionally, the firm is also aggressively targeting the Chinese market, and it has opened 96 stores in the country, for its second largest global presence.

Raymond James set a $345 share price target for the company in October 2022, stating that investors should take a long term view. As this year’s second quarter ended, 50 out of the 895 hedge funds polled by Insider Monkey had held a stake in Lululemon Athletica Inc. (NASDAQ:LULU).

Lululemon Athletica Inc. (NASDAQ:LULU)’s largest investor is Ken Griffin’s Citadel Investment Group which owns 967,492 shares that are worth $263 million.

2. Pfizer Inc. (NYSE:PFE)

Number of Hedge Fund Holders: 70

Pfizer Inc. (NYSE:PFE) is one of the largest pharmaceutical firms in the world. It manufactures and sells a variety of different medicines for heart, neurological, mental health, viral, and other illnesses. The firm is headquartered in New York, New York, United States.

Pfizer Inc. (NYSE:PFE) is trading at a P/E ratio of 9.18, which is significantly lower than the health care sector’s average of 16. The company has also started to reverse its share price losses, and over the past month, the shares are up by a respectable 7%. Additionally, Pfizer Inc. (NYSE:PFE) has a three year annualized revenue growth of a whopping 95% which is more than five times the sector average growth of 13%, and the firm’s return on invested capital (ROIC) exceeds its cost of capital by a strong 17%, allowing it to generate hefty returns.

Pfizer Inc. (NYSE:PFE) pays a 40 cent dividend for a 3.41% yield. Insider Monkey’s Q2 2022 survey of 895 hedge funds outlined that 70 had held a stake in the company.

Pfizer Inc. (NYSE:PFE)’s largest investor is Cliff Asness’ AQR Capital Management which owns 10 million shares that are worth $553 million.

Diamond Hill Capital mentioned the company in its Q3 2022 investor letter. Here is what the fund said:

“Also among our bottom contributors were health care products manufacturer Abbott Labs, global pharmaceutical company Pfizer Inc. (NYSE:PFE), media and technology giant Alphabet, and insurance company American International Group (AIG). Although Pfizer continues to report strong performance of its core drugs, sales of its COVID vaccine and treatment have likely peaked and sales are expected to decline going forward. We remain optimistic about the company long term as we believe management is taking the company in the right direction, focusing R&D, and making strategic acquisitions with profits generated from COVID vaccine sales.”

1. PayPal Holdings, Inc. (NASDAQ:PYPL)

Number of Hedge Fund Holders: 97

PayPal Holdings, Inc. (NASDAQ:PYPL) is a payments platform provider that allows individuals and businesses to make cross border payments. The firm is headquartered in San Jose, California, the United States.

PayPal Holdings, Inc. (NASDAQ:PYPL) has grown its active accounts by an average of ten million over the past four years. Out of these, the firm has also grown its active accounts to 429 million this year from 403 million last year and during the same time period, its active merchant accounts have also grown by 9%. Additionally, the firm’s annualized payment transactions per account have grown by 12% annually. Finally, Wall Street analysts expect PayPal Holdings, Inc. (NASDAQ:PYPL) to grow its revenue by 10% to 15% each year from now to the end of 2025.

Morgan Stanley kept a $134 share price target for the company (current share price is $84) in October 2022, as it outlined that PayPal Holdings, Inc. (NASDAQ:PYPL)’s subsidiary Venmo’s deal with Amazon is a good development. 97 out of the 895 hedge funds polled by Insider Monkey during this year’s second quarter had bought the company’s shares.

Out of these, PayPal Holdings, Inc. (NASDAQ:PYPL)’s largest investor is Ken Fisher’s Fisher Asset Management which owns 17 million shares that are worth $1.2 billion.

RiverPark Funds mentioned the company in its Q3 2022 investor letter. Here is what the fund said:

PayPal provides direct exposure to the secular growth in ecommerce-driven digital payments as it is the most accepted digital wallet on-line. More than 3/4 of the 1,500 largest online retailers across North America and Europe accept PayPal, which is almost triple the acceptance of Apple Pay, the number two digital wallet. PayPal is also a key beneficiary of the current dramatic shift in consumer buying habits brought on by the pandemic, as well as the relatively newer consumer-to-consumer payment trends through its Venmo peer-to-peer (P2P) payment service. With a 2Q non-GAAP operating margin of 19%, PYPL also has significant margin expansion potential given that competitors Adyen, Visa and Mastercard have 50%-65% operating margins. We believe the combination of the secular growth of eCommerce and P2P payments, along with expanding operating leverage and the strategic use of the company’s significant and growing cash balance should fuel a mid-20% earnings growth rate over the next five years. This, to us, presents an excellent risk/reward profile given that PYPL trades at a modest premium to the market multiple and a 6% 2023 FCF yield.”

Disclosure: None. You can also take a look at 11 Best Day Trading Stocks To Buy and 15 Biggest Dow Companies By Market Cap.

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