We recently published a list of 10 Best Single Digit Stocks To Buy Now. In this article, we are going to take a look at where CommScope Holding Company, Inc. (NASDAQ:COMM) stands against other best single digit stocks to buy now.
The US markets had a blockbuster 2024, led by a strong show by the technology sector. The broader market grew by over 23% during the year after rising 24% in 2023. Two consecutive years of over 20% gains marked the market’s best performance in nearly three decades.
READ ALSO: 12 Best Long-Term Penny Stocks to Buy According to Hedge Funds and 10 Best Penny Stocks to Buy for 2025.
Stocks have benefited from a resilient American economy that steered clear of recession. Waning inflation and interest rate cuts also bolstered investor sentiment throughout last year. Research analysts anticipate continued growth in 2025 amid strong economic data and anticipation of a business-friendly Trump administration.
In a note on December 30, Wedbush Securities analyst, Dan Ives, said that he expects tech stocks to surge 25% this year with the incoming Trump administration focusing on slashing unnecessary regulations.
Todd Rosenbluth, the head of research at VettaFi, believes 2025 could be the year for small-cap stocks with solid underlying fundamentals. He expects ETFs specializing in small-caps to make gains as investors broaden their market exposure as interest rates ease.
Rosenbluth shared the following remarks while talking to CNBC in late November.
“Small caps are going to become more in favor in 2025. They started to perk up since the election and heading into the election as interest rates have been coming down.”
Fundstrat’s Tom Lee also shares similar sentiments. In an interview in November, he said that small-cap stocks could soar in the coming years under the new administration, driving monster returns.
“I do think there’s still a lot of upside. So I think small-caps could, over the next couple of years, outperform by more than 100%.”
On the other hand, some Wall Street analysts are cautious about the new year and have warned of potential downsides, with the incoming administration promising new tariffs. Following his election victory, President-elect Trump vowed to impose steep tariffs on imports from Canada, China, and Mexico, which could increase costs for manufacturers. Ongoing geopolitical tensions in different parts of the world could also hurt the stock market.
Jurrien Timmer, Director of Global Macro for Fidelity Management & Research Company wrote the following in a note on December 18.
“Personally, I am bullish on stocks for 2025, though with valuations high and the bull market maturing, I don’t think investors should expect quite such spectacular returns next year as we have seen this past year. And I think there are important risks from inflation, and the market’s concentration, to be aware of.”
Methodology
For this article, we sifted through screeners to get a list of stocks priced greater than $1 and less than $10, with a low forward price-earnings ratio (<15) and institutional ownership of over 70%. From there, we selected the 10 stocks with the highest number of hedge fund investors, based on Insider Monkey’s database of over 900 prominent hedge funds as of Q3 2024.
The 10 best single digit stocks to buy now have been ranked in ascending order based on the number of hedge funds holding stakes in them. Where two or more stocks were tied on hedge fund sentiment, we used a higher market cap as a tiebreaker between them. Please note that all data is as of the close of day on Friday, December 27, 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Aerial shot of a communications tower, emphasizing the company’s infrastructure networks.
CommScope Holding Company, Inc. (NASDAQ:COMM)
Share Price as of December 27: $5.51
Number of Hedge Fund Holders: 38
CommScope Holding Company, Inc. (NASDAQ:COMM) is a global leader in network connectivity. The company provides infrastructure solutions for communication, data centers, and entertainment networks. It is among the best single digit stocks to buy now.
In July 2024, COMM announced the sale of its Outdoor Wireless Networks (OWN) segment and Distributed Antenna Systems (DAS) business unit to Amphenol for $2.1 billion. The deal is expected to close during the first half of 2025. Analysts believe that by selling two of its mobile-focused divisions, the company has decided to focus on its fixed-line operations.
On November 7, CommScope Holding Company, Inc. (NASDAQ:COMM) announced encouraging financial results for the third quarter of 2024. Net sales increased 3% from last year to $1.082 billion, driven by an impressive show from the Connectivity and Cable Solutions (CCS) segment. Adjusted EBITDA from operations totaled $204 million, up 30% year-over-year. Adjusted EPS was -$0.05 per share, but increased by 58%.
The CCS segment had net sales of $737 million, up 17% from the same quarter last year. The success was attributed to its enterprise business, especially hyperscale and cloud data centers. COMM’s cash balance increased by $110 million in Q3. It ended the quarter with $456 million in global cash and total available cash and liquidity of over $1 billion.
CommScope Holding Company, Inc. (NASDAQ:COMM) is continuing to invest in capacity expansion that will put it on track to support demand in 2025. CEO Chuck Treadway believes CommScope Holding Company, Inc. (NASDAQ:COMM)’s future outlook is strong, with customers signaling robust growth in data centers over the coming years.
Hedge fund sentiment around the stock is improving as well. According to Insider Monkey’s database for Q3 2024, 38 hedge funds had investments in the company, up from 28 at the end of the second quarter. FPR Partners has the largest stake in COMM, valued at over $81.6 million, as of September 30, 2024.
Overall, COMM ranks 2nd on our list of best single digit stocks to buy now. While we acknowledge the potential of human capital technology companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than COMM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.