In this article, we discuss the 5 growth stocks that hedge funds continue to load up on despite recession fears. If you want to read about some growth stocks that hedge funds like, go directly to Hedge Funds Continue to Load Up on These 10 Growth Stocks Despite Recession Fears.
5. NCR Corporation (NYSE:NCR)
Number of Hedge Fund Holders in Q2 2022: 47
Number of Hedge Fund Holders in Q1 2022: 36
NCR Corporation (NYSE:NCR) provides software and related services. It has interests in sectors such as banking, retail, hospitality, telecommunications and technology. In March, the firm said that it had purchased intellectual property related to open banking from Spoke Technologies. The purchase is part of a larger plan by the firm to accelerate a push into digital banking and financing. The new tech will equip NCR with enhanced data integration capabilities geared towards personalization.
In early 2021, NCR Corporation (NYSE:NCR) had purchased Terafina, a solution provider for customer account opening and onboarding across digital. The purchase enhanced sales and marketing capabilities of the Digital First Banking platform of NCR.
Among the hedge funds being tracked by Insider Monkey, California-based investment firm Engaged Capital is a leading shareholder in NCR Corporation (NYSE:NCR), with 4.4 million shares worth more than $138 million.
4. Lumen Technologies, Inc. (NYSE:LUMN)
Number of Hedge Fund Holders in Q2 2022: 42
Number of Hedge Fund Holders in Q1 2022: 30
Lumen Technologies, Inc. (NYSE:LUMN) operates as a technology and communications firm. The firm is one of the few growth stocks on the market with a reliable dividend history. For the last twenty-two years, the company has consistently paid a dividend to shareholders. The sector median in this regard is just seven years. On August 18, the company declared a quarterly dividend of $0.25 per share, in line with previous. The forward yield was 9.06%. The dividend is payable to shareholders by early September.
On August 5, JPMorgan analyst Philip Cusick reinstated coverage of Lumen Technologies, Inc. (NYSE:LUMN) stock with an Underweight rating and a price target of $10, noting the business of the firm would remain fundamentally challenged in the near term.
At the end of the second quarter of 2022, 42 hedge funds in the database of Insider Monkey held stakes worth $1 billion in Lumen Technologies, Inc. (NYSE:LUMN), compared to 30 in the preceding quarter worth $904 million.
In its Q1 2022 investor letter, Longleaf Partners Fund, an asset management firm, highlighted a few stocks and Lumen Technologies, Inc. (NYSE:LUMN) was one of them. Here is what the fund said:
“Lumen – Lumen Technologies, Inc. (NYSE:LUMN) reported weak organic revenue growth and guided more weakness for 2022. We expect revenue growth to kick back in towards the end of 2022, and the huge FCF coupon helped offset value decline from the weaker guidance. The other factor weighing on the stock price was largest shareholder Temasek’s partial sale of its 10% position in the quarter, creating uncertainty and a share price overhang. We have a 13D filed and continue to urge the company to take steps to address the significant price-to-value gap, including continued share buybacks.”
3. QuidelOrtho Corporation (NASDAQ:QDEL)
Number of Hedge Fund Holders in Q2 2022: 37
Number of Hedge Fund Holders in Q1 2022: 26
QuidelOrtho Corporation (NASDAQ:QDEL) engages in the development and manufacturing of diagnostic testing products. On August 4, the firm posted earnings for the second quarter of 2022, reporting earnings per share of $2.34, missing market estimates by $0.51. The revenue over the period was $613 million, up 247% compared to the revenue over the same period last year but missing estimates by $27 million. The firm said that supplemental combined revenue was $898 million during the period, an increase of 37.5% in constant currency.
On July 20, UBS analyst Elizabeth Garcia initiated coverage of QuidelOrtho Corporation (NASDAQ:QDEL) stock with a Sell rating and a price target of $86, lauding the recently completed merger of the firm with Ortho.
At the end of the second quarter of 2022, 37 hedge funds in the database of Insider Monkey held stakes worth $631 million in QuidelOrtho Corporation (NASDAQ:QDEL), compared to 26 in the preceding quarter worth $550 million.
2. CONMED Corporation (NYSE:CNMD)
Number of Hedge Fund Holders in Q2 2022: 34
Number of Hedge Fund Holders in Q1 2022: 22
CONMED Corporation (NYSE:CNMD) operates as a medical technology firm. In early August, the company announced that it would be purchasing privately-held medical device start-up Biorez. The deal was made for a cash consideration of $85 million at closing and up to an additional $165 million in growth-based earn-out payments over a four-year period. The former said the purchase would add $1 million in revenues for the firm and also add around $0.15 per share to the adjusted earnings.
On August 2, Piper Sandler analyst Matt O’Brien maintained an Overweight rating on CONMED Corporation (NYSE:CNMD) stock with a price target of $118, noting the firm was more on the risky end of the spectrum.
At the end of the second quarter of 2022, 34 hedge funds in the database of Insider Monkey held stakes worth $143 million in CONMED Corporation (NYSE:CNMD), compared to 22 in the preceding quarter worth $224 million.
1. Switch, Inc. (NYSE:SWCH)
Number of Hedge Fund Holders in Q2 2022: 31
Number of Hedge Fund Holders in Q1 2022: 14
Switch, Inc. (NYSE:SWCH) provides internet services and related infrastructure. The firm has a reliable dividend profile. Over the past three years, it has consistently paid a dividend to shareholders. These payouts have also registered consistent growth during this time. The sector median in this regard is just two years. On August 18, the firm declared a quarterly dividend of $0.0525 per share, in line with previous. The forward yield was 0.62%. The dividend if payable to shareholders by early September.
Switch, Inc. (NYSE:SWCH) is based in Las Vegas and provides tech solutions to network and telecommunications providers. These include cloud, information technology, and software products, among other solutions.
Among the hedge funds being tracked by Insider Monkey, Florida-based investment firm Pentwater Capital Management is a leading shareholder in Switch, Inc. (NYSE:SWCH), with 6.5 million shares worth more than $218 million.
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