We recently compiled a list of the 10 Best Stocks For Day Trading. In this article, we are going to take a look at where MicroStrategy Incorporated (NASDAQ:MSTR) stands against the other day trading stocks.
At the press conference held on September 18, Federal Reserve Chair Jerome Powell reiterated the central bank’s commitment to its dual mandate of achieving maximum employment and price stability. He noted that the U.S. economy has remained strong, with GDP increasing at a steady rate of 2.2% in the first half of the year, while inflation has significantly moderated.
While the labor market has softened somewhat, it continues to show strength, with the unemployment rate still relatively low at 4.2%. Inflationary pressures have reduced, although inflation remains slightly above the 2% target, as core PCE prices have risen by 2.7% over the past year.
In light of these developments, the Federal Open Market Committee (FOMC) chose to lower its policy interest rate by 50 basis points, a move intended to ease monetary policy. Powell explained that this action reflects growing confidence that labor market strength can be maintained, while inflation continues to decrease toward the Fed’s target. Powell emphasized the Fed’s flexibility in its approach and noted that future rate changes will depend on incoming data and the evolving economic landscape.
When questioned about the likelihood of future rate cuts, Powell said that each decision would be data-driven and made on a meeting-by-meeting basis. The Summary of Economic Projections (SEP) suggests a federal funds rate of 4.4% by the end of the year, with further reductions expected in the years ahead, which points to expectations of lower inflation and slightly higher unemployment.
Expert Opinion on Current Economic Conditions
At a CNBC interview on September 23, Stephanie Link, Chief Investment Strategist and Portfolio Manager at Hightower said that the market’s current state of confidence is driven by the belief that the Fed is successfully managing a soft landing and preparing for a cycle of rate cuts. She expects better-than-expected economic growth and earnings forecasts, despite the ongoing volatility in the market.
Link noted the strong recent data, which include improved retail sales, manufacturing, and housing permits, along with jobless claims at a four-month low. This backdrop supports earnings growth and any market weakness presents a buying opportunity, especially in sectors like technology, financials, and industrials.
When asked about her stock picks, Link highlighted Exxon, as she mentioned its low valuation, attractive forward earnings, and the recent acquisition of Pioneer. She expects this acquisition to drive significant production growth and sees multiple upcoming catalysts, such as an analyst meeting in December and new projects next year.
Although oil prices remain volatile due to geopolitical factors in the Middle East, Link downplayed the concerns about higher prices and said that the oil giant generates substantial profits even at lower oil prices. She said that the sector’s ability to return cash to shareholders through dividends and buybacks sees further upside in energy stocks despite the sector lagging recently.
Our Methodology
For this article, we identified over 35 stocks with a beta of over 2.5. Next, we narrowed the list to 10 stocks with the highest 5-year beta and average trading volume of over 10 million. The 10 best stocks for day trading are listed in ascending order of their beta. We also mentioned the hedge fund sentiment around each stock which was taken from Insider Monkey’s database of over 900 elite hedge funds.
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).
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MicroStrategy Incorporated (NASDAQ:MSTR)
5-year Beta (monthly): 3.11
Average Volume: 11,941,912
Number of Hedge Fund Holders: 26
MicroStrategy Incorporated (NASDAQ:MSTR) is a Virginia-based company that focuses on business intelligence (BI), mobile software, and cloud services. Since its inception, it has evolved to deliver innovative solutions for data analysis that allow organizations to use both internal and external information for informed decision-making.
The company is also recognized as a significant player in the cryptocurrency space due to its substantial investments in Bitcoin, which have positioned it as a unique asset holder in the tech industry. By the end of July, the company had 226,500 Bitcoin (1 BTC = $63,314.50 as of September 23).
MicroStrategy (NASDAQ:MSTR) is dedicated to advancing the Bitcoin network through financial market engagement, advocacy, and technological innovation. The company utilizes its cash flows and funds from equity and debt financing to build its Bitcoin reserves, which are the primary focus of its treasury strategy.
MicroStrategy (NASDAQ:MSTR) was quite a successful stock in 2024. By July 11, the company had gained nearly 100% and announced a 10-1 stock split on the date. The split was executed as a stock dividend on August 7 for shareholders of record on August 1.
On September 23, TD Cowen analyst Lance Vitanza raised the price target for MicroStrategy (NASDAQ:MSTR) to $200 from $194 and maintained a Buy rating on the company stock. The revision was followed by the company’s recent successful debt transactions, which allowed it to purchase 7,420 bitcoins for $458 million. In addition to the acquisition, these transactions also helped the company reduce its interest expenses significantly.
Bitcoin makes up most of the company’s value which makes sense that the stock will be volatile as cryptocurrencies are one of the most volatile asset classes in the market. With a 5-year beta of 3.11, the company takes the 5th spot on our list of best stocks for day trading.
In the second quarter, 26 hedge funds had stakes worth $442.244 million in MicroStrategy (NASDAQ:MSTR). With 1.199 million shares worth $165.204 million, Citadel Investment Group is the company’s largest shareholder as of June 30. In Q2, the firm increased its holdings in the company by 75%.
Artisan Partners stated the following regarding MicroStrategy Incorporated (NASDAQ:MSTR) in its first quarter 2024 investor letter:
“Extremely strong returns by two sector constituents, Super Micro Computer and MicroStrategy Incorporated (NASDAQ:MSTR), contributed 393bps (52%) to the index’s return and gave them the largest combined weighting in the index’s history. Regarding MicroStrategy, the company started the year with a 0.6% index weighting and a market value of $10.6 billion and ended the quarter at 1.9% and $28.7 billion. Our decision to avoid this company comes down to a lack of conviction in its franchise characteristics. The stock has worked this year due to a rebound in the price of bitcoin. Since 2020, MicroStrategy has been focused on converting its cash and cash equivalent holdings, as well as issuing debt, to fund the purchase of bitcoin, which now totals ~$15 billion.”
Overall MSTR ranks 5th on our list of the best stocks for day trading. While we acknowledge the potential of MSTR as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is promising and 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.