In this article, we will look at some of the best beginner stocks.
The US stock market has experienced a turbulent first quarter of 2025, marked by increased volatility and negative returns across the major indices. Concerns surrounding tariffs, economic data, and the performance of key technology stocks contributed to this challenging period for investors.
The year began with the revelation of DeepSeek, an Artificial Intelligence (AI) software developed in China, which rivalled its US competitors, such as ChatGPT. The software was considered revolutionary compared to others, sending shockwaves across the global markets. Reuters reported a global investor sell-off across US indexes, with one of the major tech companies alone losing $593 million in one day.
The US government was quick to implement policies that are aimed to promote US-listed tech firms while simultaneously reducing the impact of the DeepSeek AI, such as the use of tariffs against trade with Chinese firms.
The uncertainty of the US economy added to the market volatility after the Federal Reserve announced it would maintain interest between 4.25% and 4.50% in the short term. The banking sector, which is considered a good investment during times of high interest rates, is not completely immune. Analysts who previously considered 2025 to be a low-interest rate year will now price in the impact of possible NPLs (non-performing loans) due to consistent fed rates.
In March, President Trump announced further global tariffs on Europe and China, fuelling the concerns of investors. In retaliation, Europe introduced counter tariffs. Emily Bowersock Hill, CEO and founding partner at Bowersock Capital Partners, which has $850M in assets under management, responded in an email to the methodology in calculating the tariffs by the US as:
“So simplistic, and frankly primitive as to leave the market wondering, did its architects ever take Econ 101?”
The US announced tariffs of 54% on Chinese goods, which will take effect on April 9, 2025. China, in response, implemented “reciprocal” tariffs on US goods of 34%, as reported by the country’s official Xinhua News Agency. This led to the US market indexes experiencing the biggest drop since COVID-19, with investors concerned about the impact of these tariffs on the supply chains of companies globally.
The US economy is considered to be entering “continuous stagflation”, which is defined as continued inflation with very low growth and high unemployment. The Cboe Volatility Index (aka VIX) is currently at 29.68%, well above its 1-year average of 17.6%. In such economic conditions, investors should seek stocks which should provide steady/ growing revenue, dividend growth, low cyclicality, and significant cash flows and have a durable competitive advantage. Systemically important sectors are thus ideal for investors, including energy, real estate, healthcare, finance, and tech.
A close-up of a person signing a loan agreement, emphasising safety and legality of this company’s fixed & floating rate loan services.
Our Methodology
For this list, we analyzed the Tech, Finance, Real Estate, Energy, and Healthcare industries to identify the top stocks for each sector and their historical performance against the market. We then used Insider Monkey’s Q4 2024 proprietary hedge fund holdings database and identified the 12 most popular hedge fund stocks. The stocks are ranked in ascending order of their hedge fund positions.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
12. Citigroup Inc. (NYSE:C)
No. of Hedge Fund Holders: 101
Citigroup Inc. (NYSE:C) is a global financial services holding company operating through five segments. The Services segment offers Treasury and Trade Solutions for cash management and Securities Services for post-trade technologies. The Markets segment provides sales and trading across various asset classes and market-making services. The Banking segment encompasses investment banking, advisory services, and corporate lending. U.S. Personal Banking focuses on co-branded cards and retail services. The Wealth segment caters to high-net-worth clients and professional industries with banking, lending, investment, and trust offerings through its Private Bank, Wealth at Work, and Citigold businesses.
Citigroup Inc. (NYSE:C)’s revenue for the first quarter of 2025 was $69.67 million, beating estimates by $69.67 million, and an EPS of $1.36, exceeding expectations by $0.12. Despite the expected losses in credit cards (aka NPLs), operational improvements have led analysts to consider the stock as a reliable and stable stock for any portfolio.
The bank can identify cost reduction techniques that translate to savings for shareholders. In terms of growth, Citigroup Inc. (NYSE:C) continues to gain a foot in the US and reduce exposure to international markets, something that is considered positive in today’s global tariff wars. These are seen as CEO Jane Fraser’s strategy to focus more on corporate banking, asset management, and consumer banking.
A major metric to look at when analyzing the banking industry is the Capital Adequacy Ratio, and Citigroup Inc. (NYSE:C) is maintaining a stable growth in this ratio, rising from $145.6 billion in 2022 to $154.4 billion in 2023—an increase of nearly 6%. In essence, the company continues to be a powerful player in the banking sector, with a market capitalization of $118.82 billion and an average twelve-month trading price of $89.55, an upside of 55.17%. It is among the best beginner stocks to consider.
11. Exxon Mobil Corporation (NYSE:XOM)
No. of Hedge Fund Holders: 104
Exxon Mobil Corporation (NYSE:XOM) is a global energy and chemical company. The company is involved in the manufacture, trading, transportation, and sale of a wide range of products through 4 main segments, namely Upstream, Energy Products, Chemical Products, and Specialty Products segments.
Exxon Mobil Corporation (NYSE:XOM) is highly susceptible to headwinds in commodities, namely the price of oil. In the first week of April, the price of spot oil plummeted by 7%, the worst in a 3-year period. As per a report by Reuters, OPEC+ led by Saudi Arabia announced increased oil production for May, after suggesting oil pumping rivals Kazakhstan and Iraq that they need to improve their compliance with oil production cuts or it will start increasing its own oil production. Analysts, however, commented that these are short-term waves that can persist in commodities.
Despite these global challenges, Exxon Mobil Corporation (NYSE:XOM) continues to show stellar performance through its financials. The company had a topline of $83.43 billion for Q4 2024, with an EPS of $1.67 and cashflow of $55 billion. Chairman and CEO Darren Woods commented the following on the company’s results:
“What our 2024 performance makes clear is that the transformed company we’ve built is delivering. We strengthened and further capitalized on our unique competitive advantages, technology, scale, integration, execution excellence, and, of course, people. We demonstrated the strength of our consistent strategy now in its eighth year of driving greater value for society and shareholders alike.”
Analysts believe that fears of global tariff wars, slowing GDP & reduced consumer spending will impact the company’s overall performance in 2025. The company provided guidance on revenue for the upcoming quarter at $86.32 billion and an EPS of $1.70. Analysts have a consensus on Exxon Mobil Corporation (NYSE:XOM) average twelve-month trading price of $128.83, an upside of 21.91%, which makes it one of the best beginner stocks on our list.
10. The Walt Disney Company (NYSE:DIS)
No. of Hedge Fund Holders: 108
The Walt Disney Company (NYSE:DIS) is a global entertainment powerhouse operating through Entertainment, Sports, and Experiences segments and operates under the brands including ABC, Disney, FX, Fox, and National Geographic, producing original content through studios like Lucasfilm, Marvel, Pixar, and Walt Disney Pictures. It also operates direct-to-consumer streaming services like Disney+, Disney+ Hotstar, and Hulu. The Sports segment delivers sports-related content via ESPN and its related platforms. The Experiences segment encompasses Disney’s renowned theme parks and resorts worldwide, including Walt Disney World, Disneyland, and international locations, alongside Disney Cruise Line and Vacation Club.
The Walt Disney Company (NYSE:DIS) has proven itself as not just an entertainment powerhouse but a dynamic and competitive player in the industry. The company has changed from its humble beginnings of black and white images from 1920 to becoming an entertainment business that incorporates AI in its creative process. Bears of the stock highlight headwinds that will impact the company’s performance, notably, theatrical films will never return to levels before COVID-19, high production budgets are in the hundreds of millions, volume of content is high, which is met with a shrinking audience.
Analysts bullish on the stock recognize these factors and continue to support the price of the stock. The company’s brands are synonymous with homes across the globe, not to mention its acquisition of other brands with strong fan followings, such as LucasFilms in 2012.
The Walt Disney Company (NYSE:DIS) announced a revenue of $24.69 billion for Q1 2025, beating estimates by $143.28 million, with an EPS of $1.76, compared to estimates of $1.43. The company has a consensus among analysts of the twelve-month trading price at $126, with an upside of 49.09%.
