Stocks On The Rise: 15 Best To Buy Now

Published on August 12, 2021 at 10:41 am by Usman Kabir in Hedge Funds, News

In this article, we discuss the stocks on the rise and the 15 best to buy now. If you want to skip our detailed analysis of these stocks, go directly to Stocks On The Rise: 5 Best To Buy Now.

Investors looking to capitalize on the post-pandemic economic boom at the stock market have started to consider investments in momentum exchange-traded funds (ETFs) that lower the potential risk of investing in individual plays and lead to healthier and more regular returns. There are several factors that have contributed to this level of confidence in ETFs, which include a record earnings session for the S&P 500, a decrease in the unemployment rate, and the approval of an infrastructure bill that looks set to jumpstart the US manufacturing industry.

According to data released by FactSet, a financial data firm, on August 6, 87% of the firms on the S&P 500 reported a positive earnings per share surprise in the second quarter, with 89% of the firms on the index having reported their results at the time of the release. This marks the highest percentage of firms on the index beating expectations on earnings since FactSet started tracking this metric back in 2008. Adding to this positive sentiment, investment bank Goldman Sachs has raised the price target on the S&P 500 to $4,900 for 2022 from $4,600.

Figures from the US Department of Labor reveal that the US economy added more than 940,000 jobs in the month of July. The statistic increased investor confidence at the market that had been dampened by the spread of the Delta variant of COVID-19 and inflation predictions leading to fears about a drawdown in stocks. On August 10, recovery catalysts were given a further boost after the US Senate passed the $1 trillion infrastructure bill of US President Biden to increase government spending on rebuilding roads, airports, and communications systems.

Some of the best stocks to buy now to ride this momentum include Alphabet Inc. (NASDAQ: GOOG), PayPal Holdings, Inc. (NASDAQ: PYPL), and The Walt Disney Company (NYSE: DIS), among others discussed in detail below. As consumer confidence increases and the GDP grows – the US GDP grew at a record annual rate of 6.5% in the second quarter – investors are hopeful of an extended bull run at the market that weathered one of the worst crises of the post-war era during 2020 because of the COVID-19 lockdowns.

The pandemic accelerated the adoption of technologies that are disrupting several sectors of the economy, including the finance world. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.

Our Methodology

With this context in mind, here is our list of the stocks on the rise and the 15 best to buy now. These were selected from the holdings of iShares MSCI USA Momentum Factor ETF (BATS: MTUM), the fund that invests at least 90% of assets in an index that tracks the performance of stocks with higher momentum characteristics in the market capitalization-weighted index. After the initial selection, the firms were further sorted according to hedge fund sentiment using data from the 866 funds tracked by Insider Monkey. Special importance was assigned to the basic business fundamentals and analyst ratings for each firm in the final selection.

Stocks On The Rise: Best To Buy Now

15. Moderna, Inc. (NASDAQ: MRNA)

Number of Hedge Fund Holders: 39

Moderna, Inc. (NASDAQ: MRNA) is a biotechnology company that develops and sells therapeutics and vaccines. It is placed fifteenth on our list of the stocks on the rise and the 15 best to buy now. It is based in Cambridge. On August 10, the firm announced that it had signed a memorandum of understanding with the Canadian government to set up a manufacturing facility in the country. The firm will invest hundreds of millions of dollars to set up the new facility, according to reports. The share price soared by 17% following the announcement.

On July 15, investment advisory Jefferies raised the price target on Moderna, Inc. (NASDAQ: MRNA) stock to $250 from $170 but kept a Hold rating. Michael Yee, an analyst at the firm, issued the ratings update.

At the end of the first quarter of 2021, 39 hedge funds in the database of Insider Monkey held stakes worth $1.6 billion in Moderna, Inc. (NASDAQ: MRNA), down from 41 in the preceding quarter worth $1.4 billion.

Just like Alphabet Inc. (NASDAQ: GOOG), PayPal Holdings, Inc. (NASDAQ: PYPL), and The Walt Disney Company (NYSE: DIS), Moderna, Inc. (NASDAQ: MRNA) is one of the stocks on the rise and the best to buy now.

In its Q2 2021 investor letter, Baillie Gifford, an asset management firm, highlighted a few stocks and Moderna, Inc. (NASDAQ: MRNA) was one of them. Here is what the fund said:

“Among the top contributors to Fund performance in the second quarter was Moderna. Moderna has just reported its first profitable quarter in the company’s history – net income for the most recent quarter was $1.2 billion. It reported revenue of $1.9 billion, an impressive increase compared to $8 million a year ago, driven by the sales of its Covid-19 vaccine. Moderna is expecting to deliver up to 1 billion vaccine doses in 2021 and is in discussions to increase global supply to governments around the world. Our long-term focus remains on the transformational potential of Moderna’s technology and its ability to address different diseases.”

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

Number of Hedge Fund Holders: 44

United Parcel Service, Inc. (NYSE: UPS) is ranked fourteenth on our list of the stocks on the rise and the 15 best to buy now. United Parcel Service, Inc. (NYSE: UPS) is headquartered in Georgia and provides transportation, logistics, and delivery services. In earnings results for the second quarter, posted on July 27, the firm reported earnings per share of $3.06, beating market predictions by $0.25. The revenue over the period was more than $23 billion, up 14% year-on-year and beating market estimates by $230 million.

On June 25, investment advisory Morgan Stanley maintained an Equal Weight rating on United Parcel Service, Inc. (NYSE: UPS) stock but raised the price target to $270 from $265, noting that the firm had given guidance numbers that were between a bull and bear prediction.

Out of the hedge funds being tracked by Insider Monkey, Washington-based Bill & Melinda Gates Foundation Trust is a leading shareholder in United Parcel Service, Inc. (NYSE: UPS) with 2.8 million shares worth more than $476 million.

13. Capital One Financial Corporation (NYSE: COF)

Number of Hedge Fund Holders: 59

Capital One Financial Corporation (NYSE: COF) is placed thirteenth on our list of the stocks on the rise and the 15 best to buy now. The company owns and runs the Capital One Bank and is based in Virginia. On July 22, the company posted earnings for the second quarter, reporting earnings per share of $7.71, beating market estimates by $3.17. The revenue over the period was $7.3 billion, up 12% compared to the revenue over the same period last year and beating market estimates by $240 million.

On July 23, investment advisory BMO Capital raised the price target on Capital One Financial Corporation (NYSE: COF) stock to $184 from $176 and reiterated an Outperform rating, noting that the strong earnings results of the firm were facilitating growth investments.

Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Harris Associates is a leading shareholder in Capital One Financial Corporation (NYSE: COF) with 6.5 million shares worth more than $828 million.

Alongside Alphabet Inc. (NASDAQ: GOOG), PayPal Holdings, Inc. (NASDAQ: PYPL), and The Walt Disney Company (NYSE: DIS), Capital One Financial Corporation (NYSE: COF) is one of the stocks on the rise and the best to buy now.

In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Capital One Financial Corporation (NYSE: COF) was one of them. Here is what the fund said:

“While reducing in health care and consumer staples, we increased our exposure to high-quality names in economically sensitive areas of the market. In financials, we increased our position in Capital One on the premise that a benign consumer credit environment should be sustainable in light of unprecedented government support.”

12. Tesla, Inc. (NASDAQ: TSLA)

Number of Hedge Fund Holders: 62

Tesla, Inc. (NASDAQ: TSLA) is a California-based electric vehicle maker and clean energy firm. It is ranked twelfth on our list of the stocks on the rise and the 15 best to buy now. On August 10, the company reported that in July, it had sold 32,968 EVs made in China, down 0.6% compared to the units sold in June. The firm also revealed that it exported more than 24,000 units made in China during July as local sales had declined. Tesla is facing competition from local EV makers as it steps up investments in growth markets.

On August 9, investment advisory Jefferies upgraded Tesla, Inc. (NASDAQ: TSLA) stock to Buy from Hold and raised the price target to $850 from $700, highlighting the higher global battery electric demand and assembly capacity in 2022 as growth catalysts for the firm.

At the end of the first quarter of 2021, 62 hedge funds in the database of Insider Monkey held stakes worth $10 billion in Tesla, Inc. (NASDAQ: TSLA), down from 68 in the preceding quarter worth $12 billion.

Here is what Baron Partners Fund has to say about Tesla, Inc. (NASDAQ: TSLA) in its Q1 2021 investor letter:

“Tesla, Inc. designs, manufactures, and sells fully electric vehicles, solar products, energy storage solutions, and battery cells. The stock fell during the quarter as a result of general market dynamics and a potential production slowdown due to parts shortages. A refreshed S/X and China Model Y ramp could also have a negative impact on margins in early 2021. We anticipate strong growth and improved margins driven by new production capacity, manufacturing efficiencies, localization of its manufacturing and supply chain, and maturation of Tesla’s full self-driving technology.”

11. Freeport-McMoRan Inc. (NYSE: FCX)

Number of Hedge Fund Holders: 68

Freeport-McMoRan Inc. (NYSE: FCX) is an Arizona-based mining company. It is placed eleventh on our list of the stocks on the rise and the 15 best to buy now. In earnings results for the second quarter, posted on July 22, the firm reported earnings per share of $0.77, beating market estimates by $0.02. The revenue over the period was $5.7 billion, up close to 90% compared to the revenue over the same period last year. The company has a market cap of over $53 billion.

On July 23, investment advisory Deutsche Bank maintained a Buy rating on Freeport-McMoRan Inc. (NYSE: FCX) stock but lowered the price target to $47 from $50, noting that the firm was looking to increase growth-related investments.

At the end of the first quarter of 2021, 68 hedge funds in the database of Insider Monkey held stakes worth $3.2 billion in Freeport-McMoRan Inc. (NYSE: FCX), down from 71 in the preceding quarter worth $2.6 billion.

In addition to Alphabet Inc. (NASDAQ: GOOG), PayPal Holdings, Inc. (NASDAQ: PYPL), and The Walt Disney Company (NYSE: DIS), Freeport-McMoRan Inc. (NYSE: FCX) is one of the stocks on the rise and the best to buy now.

10. The Goldman Sachs Group, Inc. (NYSE: GS)

Number of Hedge Fund Holders: 77

The Goldman Sachs Group, Inc. (NYSE: GS) is ranked tenth on our list of the stocks on the rise and the 15 best to buy now. The company markets financial services and is headquartered in New York. On August 1, news platform CNBC claimed that the firm would be raising the salaries of junior bankers employed at the company following other Wall Street banks doing the same. Under the new policy, the bank would pay junior bankers a base salary of $110,000, up from $85,000. The salaries of second-year analysts and first-year associates were also raised.

On July 14, investment advisory Oppenheimer kept an Outperform rating on The Goldman Sachs Group, Inc. (NYSE: GS) stock and raised the price target to $540 from $493, underlining that there was nothing not to like in the stock after an earnings beat.

Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Eagle Capital Management is a leading shareholder in The Goldman Sachs Group, Inc. (NYSE: GS) with 4.7 million shares worth more than $1.5 billion.

In its Q1 2021 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and The Goldman Sachs Group, Inc. (NYSE: GS) was one of them. Here is what the fund said:

“Financial services firm Goldman Sachs is a best-in-class franchise with a premier brand that attracts top talent and sustains market share across its businesses. We believe this has helped Goldman weather recent market volatility. In addition to de-levering risk-weighted assets, Goldman is also growing its digital investment footprint through the expansion of features on its Marcus Invest platform. The company’s stability—and ability to grow its brand even in tough times—has kept us invested over the long term.”

9. Applied Materials, Inc. (NASDAQ: AMAT)

Number of Hedge Fund Holders: 78

Applied Materials, Inc. (NASDAQ: AMAT) is placed ninth on our list of the stocks on the rise and the 15 best to buy now. The company provides manufacturing equipment and other services to the semiconductor and display industries. It is based in California. On May 20, the firm posted earnings for the second fiscal quarter, reporting earnings per share of $1.63, beating market predictions by $0.12. The revenue over the period was $5.5 billion, up close to 41% year-on-year and beating estimates by $180 million.

On May 21, investment advisory Morgan Stanley maintained an Overweight rating on Applied Materials, Inc. (NASDAQ: AMAT) stock and raised the price target to $160 from $146, noting that the firm delivered the revenue for the quarter near the high-end of guidance.

Out of the hedge funds being tracked by Insider Monkey, London-based investment firm Generation Investment Management is a leading shareholder in Applied Materials, Inc. (NASDAQ: AMAT) with 4.4 million shares worth more than $590 million.

Alphabet Inc. (NASDAQ: GOOG), PayPal Holdings, Inc. (NASDAQ: PYPL), and The Walt Disney Company (NYSE: DIS) are some of the stocks on the rise and the best to buy now, just like Applied Materials, Inc. (NASDAQ: AMAT).

8. Morgan Stanley (NYSE: MS)

Number of Hedge Fund Holders: 79

Morgan Stanley (NYSE: MS) is a New York-based financial holding company. It is ranked eighth on our list of the stocks on the rise and the 15 best to buy now. The company reported earnings for the second quarter on July 15, posting earnings per share of $1.89, beating market predictions by $0.23. The revenue over the period was $14.8 billion, up 8% compared to the revenue over the same period last year and beating estimates by $810 million. The firm also doubled a quarterly common stock dividend to $0.70 per share.

On July 19, investment advisory Citi raised the price target on Morgan Stanley (NYSE: MS) stock to $97 from $88 but kept a Neutral rating, appreciating the strong quarterly results of the firm and noting it was hard to find a better well-positioned bank.

At the end of the first quarter of 2021, 79 hedge funds in the database of Insider Monkey held stakes worth $5.2 billion in Morgan Stanley (NYSE: MS), up from 66 in the preceding quarter worth $5.6 billion.

In its Q1 2021 investor letter, Artisan Partners Limited Partnership, an asset management firm, highlighted a few stocks and Morgan Stanley (NYSE: MS) was one of them. Here is what the fund said:

“Top three contributor Morgan Stanley, a leading global financial services company, came into the portfolio in Q4 as a result of its purchase of E*TRADE. E*TRADE is a great fit on Morgan Stanley’s wealth management platform and provides a considerable amount of non-interest-bearing deposit funding. James Gorman, chairman and CEO, has steadily de-risked Morgan Stanley’s business by adding less volatile fee streams and deemphasizing the risk-obtuse culture of prior management. We believe the market will come to appreciate this mix shift over time.”

7. Square, Inc. (NYSE: SQ)

Number of Hedge Fund Holders: 92

Square, Inc. (NYSE: SQ) is a California-based payments company. It is placed seventh on our list of the stocks on the rise and the 15 best to buy now. In second quarter earnings, posted on August 1, the company beat market expectations on earnings per share by $0.35. The same day, the company announced that it would be purchasing Afterpay, an Australian fintech firm, for $29 billion in stock. The share price of the Californian firm soared by more than 10% following the announcement.

On August 4, investment advisory Barclays kept an Overweight rating on Square, Inc. (NYSE: SQ) stock but raised the price target to $345 from $340. Ramsey El-Assal, an analyst at the firm, issued the ratings update.

At the end of the first quarter of 2021, 92 hedge funds in the database of Insider Monkey held stakes worth $9.2 billion in Square, Inc. (NYSE: SQ), up from 89 the preceding quarter worth $8.8 billion.

Alphabet Inc. (NASDAQ: GOOG), PayPal Holdings, Inc. (NASDAQ: PYPL), and The Walt Disney Company (NYSE: DIS) are some of the stocks on the rise and the best to buy now, in addition to Square, Inc. (NYSE: SQ).

In its Q1 2021 investor letter, RiverPark Funds, an asset management firm, highlighted a few stocks and Square, Inc. (NYSE: SQ) was one of them. Here is what the fund said:

“We established a position in leading Financial Technology provider Square during the quarter. Through one integrated system, SQ is a hybrid of two businesses: its Seller Business (charging small and medium-sized businesses about 3% for transaction payment processing, plus other services such as instant funds access, and software for everything from customer engagement to payroll), and its Cash App (originally for person-to-person cash transfers and now a growing digital financial services provider for consumers).

The combined business has grown gross profit at a 37% CAGR over the past five years to $2.7 billion (due to pass through costs, gross profit is more reflective of top-line growth) and we believe that the company has an enormous long-term runway, as it has less than a 2% share of a more than $160 billion market. It is our view that the company’s Cash App (which has grown

from nothing in 2015 to $1.2 billion gross profit last year) has a particularly large opportunity with its powerful ecosystem of digital financial services including digital wallets, direct deposits, stock trading, bitcoin trading, and business and tax services, which are all relatively new. The vast majority of Cash App’s more than 36 million users are younger and, importantly, are willing to replace their bank and other financial services accounts with the app.

We estimate that the company can grow its gross profit more than 30% and EBITDA more than 50% annually for the foreseeable future, and while most of the company’s current profit is from its Seller Business, we believe most of Square’s future value will be from its Cash App business.”

6. Wells Fargo & Company (NYSE: WFC)

Number of Hedge Fund Holders: 96

Wells Fargo & Company (NYSE: WFC) is ranked sixth on our list of the stocks on the rise and the 15 best to buy now. The company operates from California and markets financial services. On July 27, the firm doubled the quarterly dividend to $0.20 per share from $0.10 per share. The forward yield was 1.77%. In earnings for the second quarter, posted on July 14, the firm reported earnings per share of $1.38, beating market estimates by $0.40. The revenue over the period was $20 billion, up close to 11% year-on-year.

On July 15, investment advisory Barclays kept an Equal Weight rating on Wells Fargo & Company (NYSE: WFC) stock but raised the price target to $50 from $46, increasing the earnings per share estimate for the firm for 2022 to $3.75.

At the end of the first quarter of 2021, 96 hedge funds in the database of Insider Monkey held stakes worth $7.4 billion in Wells Fargo & Company (NYSE: WFC) , down from 99 in the previous quarter worth $8.7 billion.

In its Q4 2020 investor letter, Davis Funds, an asset management firm, highlighted a few stocks and Wells Fargo & Company (NYSE: WFC) was one of them. Here is what the fund said:

“Detractors to performance relative to the index include financial services holdings such as Wells Fargo. While banks in general have suffered due to the recession and experienced credit losses, Wells Fargo also suffered from operational missteps. It is our expectation, however, that our bank holdings in general will benefit from stronger economic growth as the pandemic recedes; and we believe Wells Fargo in particular, will, over time, lower their costs and successfully grow their businesses.”

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