Top 10 Stocks to Invest in For Beginner Investors

Published April 5, 2021 at 10:17 am EDT Updated August 19, 2026 at 12:01 pm EDT

In this article we will take a look at the top 10 stocks to invest in for beginner investors.

History shows that beginner investors with limited knowledge of the stock market often give in to speculation, rumors and bad advice, ending up in a vicious cycle of losses. One should practice extreme caution and do a lot of research before investing because data shows that investors with limited budget often lose a lot of money. That’s not surprising. Higher capital reduces your risks and let you ride out your losses longer. Money makes money. The GameStop episode earlier this year gives us some key insights into this interesting but harsh truth. Initially, Reddit and retail investors cheered the downfall of Melvin Capital, but the endgame clobbered the individual investors as they lost millions following the decline in GameStop price, regulatory activity by authorities and suspension of GameStop trading by apps like RobinHood. Big hedge funds like Steve Cohen’s Point 72 and Ken Griffin’s Citadel invested $2.75 billion into Gabe Plotkin’s Melvin Capital to save it. In the end, individual investors had to be on the losing end.

Top Stocks To Invest In For Beginner Investors

An interesting study titled “Just How Much Do Individual Investors Lose by Trading?” sheds light on the risks faced by beginner and individual investors as compared to the dominance of institutional investors. The study analyzed data of the Taiwan stock exchange and concluded that the aggregate portfolio of individuals sufferd an annual performance penalty of 3.8 percentage points and their losses account for 2.2% of Taiwan’s gross domestic product. On the other hand, institutional investors posted annual returns of 1.5 percentage points in the same period.

However, the market is full of individual investors who are extremely profitable, thanks to their deep research, diversification and smart stock-picking techniques.

In this article we take a look at some of the top stocks to invest in for beginner investors. We focus on the companies with long-term growth catalysts, strong products and services and robust fundamentals. We take into account key metrics like analyst ratings, fundamentals, revenue and user growth and hedge fund sentiment while analyzing these stocks.

Huge financial volatility is not even sparing the experts. 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 February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. 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.

10 top stocks to invest in for beginner investors

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With this context and industry outlook in mind, let’s start our list of top 10 stocks to invest in for beginner investors.

10. Tattooed Chef, Inc. (NASDAQ: TTCF)

Number of Hedge Fund Holders: 11

Tattooed Chef is one of the best stocks to buy to profit from the rising trends of healthy eating and plant-based food. The company has started adding third-party brands to its portfolio. In 2020, Tattooed Chef brand sales crossed private label sales for the first time, with a 360% growth. As of the end of 2020, the company had 4300 stores. For 2021, the company expects a 49% increase in its revenue. Total distribution points in the year are expected to reach 65,000 in 2021 versus only 23,000 at the end of 2020.

There were 11 hedge funds that hold a position in TTCF at the end of the fourth quarter.

9. Suncor Energy Inc. (NYSE: SU)

Number of Hedge Fund Holders: 25

Suncor is one of the top stocks to invest in for beginner investors. The company operates in the lucrative oil sands market, with primary operations in the Athabasca oil sands in Canada. Its segments also include Exploration and Production (E&P) and refining. In February, the company said that it would not increase its capex in 2021 despite higher oil prices as it eyes to boost cash flows for debt repayments and stock buybacks.

Suncor has a dividend yield of over 3%. The company had been a reliable dividend payer over the last 10 years , until the COVID-19 pandemic hit, after which it had to slash its dividend. However, with plans to increase buybacks and shareholder value, the company is expected to revive its dividend.

With a $232.4 million stake in Suncor, Warren Buffett’s Berkshire Hathaway owns 13.8 million shares of the company as of the end of the fourth quarter of 2020. Our database shows that 25 hedge funds held stakes in Suncor as of the end of the fourth quarter, versus 22 funds in the third quarter.

In one of their investor letters, Brown Advisory spoke about Suncor Energy Inc (NYSE:SU). Here is what Brown Advisory said:

“We eliminated our small holding in Cimarex Energy in favor of consolidating our oil-related investments by adding to existing holding Suncor Energy, which we believe is a stronger company to own with oil prices at a historic low.”

8. Magnite, Inc. (NASDAQ: MGNI)

Number of Hedge Fund Holders: 29

Magnite made it to our list of top stocks to invest in for beginner investors because the company is operating in an extremely lucrative and growth-oriented market of online ads. According to a report, the online ads market is expected to reach $982.82 billion by 2025, growing at a CAGR of 21.6% between 2020 and 2025.

Magnite will benefit from the rising demand of programmatic ads as people’s hunger for over-the-top (OTT) content streamed on Connected TVs continue to rise. Magnite shares have gained 810% over the last 12 months. The company earlier this year bought video ads platform SpotX from RTL Group for $1.17 billion.

Nine Ten Partners currently holds 2.4 million shares of MGNI that amounts $79.9 million. MGNI occupies 11.11% of Nine Ten Partner’s total portfolio.

Madison Small Cap Fund, in their Q4 2020 investor letter, mentioned Magnite, Inc. (NASDAQ: MGNI). Here is what Madison Small Cap Fund has to say about Magnite, Inc. in their Q4 2020 investor letter:

“Our best performing stock was driven by our very recent investment in Magnite Corporation (MGNI). Magnite is an AdTech platform that allows digital publishers sell their ad inventory to advertisers in a programmatic, or automated fashion.

Magnite is the scale player with lowest cost structure in a highly fragmented space. Magnite’s customers are looking to consolidate the number of platforms they work with and MGNI is poised to take a significant amount of market share and could potentially triple its revenues over time. Their third quarter results were seen by investors as validation of this thesis and the stock staged a strong fourth quarter run.”

7. fuboTV Inc. (NYSE: FUBO)

Number of Hedge Fund Holders: 31

FuboTV is primarily a sports streaming service offering NFL, MLB, NBA, NHL, MLS and international soccer, along with news and other entertainment channels. In 2020, the company saw a 73% increase in its subscribers, and added 92,800 net new subscribers in the fourth quarter.

There were 31 hedge funds that hold a position in FUBO in the third fourth quarter of 2020.

In their Q4 2020 investor letter, Greenlight Capital highlighted a few stocks and FuboTV Inc. (NYSE:FUBO) is one of them. Here is what Greenlight Capital said:

“FuboTV (FUBO) is a streaming service that offers a sports-focused “skinny” bundle of TV channels that also includes a variety of news and entertainment content. Essentially, this is the type of package that Apple unsuccessfully tried to assemble for years. While FUBO does not currently achieve the gross margins that Apple reportedly sought, FUBO expects to primarily earn profits on advertising and online sports wagering. Our average effective price (we owned shares and warrants) was $5. The shares surged from the $10 October IPO price to end the year at $28. The huge move brought to light a number of bear cases that we believe misapprehend FUBO’s lucrative opportunity in online sports wagering.

The bears contend that the sports wagering market is small and FUBO won’t be able to compete with established books like William Hill or Caesars Entertainment. To the extent that sports wagering is a bet on who wins a game and by how much, we agree. However, we perceive the integrated opportunity to be qualitatively different. What if you could bet 1:2 on whether Giannis will make the next free throw, 1:3 on whether Jacob deGrom’s next pitch will be a strike or 20:1 that Aaron Judge will homer on the next at bat? One could even bet on whether Tiger will make his next putt or whether Nadal’s next serve will be an ace. Suddenly, watching sports goes from being a passive experience to a highly engaging, active one. Higher engagement leads to higher ad revenues and the ability to make other in-app sales to players. We expect the software to launch in 2021, initially for play money and later with the benefit of regulatory licenses for real money. We think the right comparison will be to video gaming companies such as Take-Two Interactive Software or Activision Blizzard rather than other over-the-top (OTT) video providers.”

6. FireEye, Inc. (NASDAQ: FEYE)

Number of Hedge Fund Holders: 31

Major attacks like SolarWinds and increasing reliance of governments and businesses on online payments, Cloud computing and websites would boost cybersecurity stocks like FireEye. The company recently published a comprehensive research on the SolarWinds episode. For 2021, the company expects to cross $1 billion in sales. The company posted strong Q4 results and said that it saw a rise in its consulting services business after the SolarWinds attack. In February, BofA upgraded the stock to Buy from Neutral and upped its price target to $27.

Alta Park Capital currently owns 1.8 million shares of FEYE, worth $1.8 million. FireEye occupies 3.46% of Alta Park’s overall equity.

5. Upwork Inc. (NASDAQ: UPWK)

Number of Hedge Fund Holders: 34

With freelancers adding $1.2 trillion to the U.S. economy and 36% of the total workforce in the country doing freelance work, online jobs platform Upwork is bound to thrive as the company remains a market leader in a growing industry.

Analysts believe that the freelancing trend will continue to rise as companies find it more cost effective and results-oriented. Upwork posted an upbeat fourth quarter after which several analysts boosted their price targets for UPWK stock. Stifel increased its price target for the stock from $40 $60, while MKM Partners hiked its price target from $52 to $69.

As of the end of the fourth quarter, 34 hedge funds in Insider Monkey’s database of 887 funds held stakes in Upwork, compared to 27 funds in the third quarter. Ancient Art (Teton Capital) is the biggest stakeholder in the company, with 3.3 million shares, worth $115.3 million.

Spree Capital Advisers in their Q4 2020 Investor Letter said that they were able to maintain a bullish insight for Upwork Inc. (NASDAQ: UPWK), and so they increased their position in the company. Here is what Spree Capital Advisers has to say about Upwork Inc. in their Investor Letter:

“Early in the fourth quarter we meaningfully increased our position size in Upwork (UPWK). Upwork is a global employment marketplace that enables businesses to vet, hire, and manage talent as part of their distributed workforce. Upwork facilitates labor and demand side connectivity on a global scale by providing the infrastructure to create trust and to streamline talent sourcing, contracting, analysis and payment. Freelancers benefit from having a reputation ranking system that feeds their marketing channels, allowing them to have access to quality, flexible work and on time compensation. Businesses on the demand side benefit by having extensive access to specialized talent, enabling faster and more cost effective hiring, and by having the strategic optionality inherent in the ability to flex a portion of their workforce based on changing demand requirements.

Labor markets have long had unnecessary frictional inefficiencies driven by regional talent imbalances and long-term trends of increased specialization of labor and declining labor mobility. Meanwhile, innovations in communication and global connectivity have transformed the way work gets done. Knowledge workers seek the flexibility and geographic advantages of on demand work, but the barrier to adoption has historically been established habits and work standards on the demand side. The Covid-19 global pandemic has broken down those barriers. We see three steps in the path to enterprise usage and shareholder value creation.

First, Upwork is reducing frictional barriers to on demand labor adoption on the demand side by modularizing the most common jobs served on the platform. Project Catalog is a collection of predefined projects that businesses purchase through an e-commerce purchase experience. Users on the demand side benefit from a frictionless way to purchase well defined, quality verified tasks to augment more complex work being done by full time employees. On demand workers on the supply side benefit from having a new avenue to market and sell the services they consistently perform. Importantly, Project Catalog widens the customer acquisition funnel by providing an easy on ramp for new customers to source and connect with talent, enabling businesses to quickly start with small projects and scale to larger and longer-term projects and relationships.

Second, Upwork is shifting its go to market strategy to target large enterprises. Currently, enterprise customers with more than 100 employees account for 20% of Upwork’s $2.7 billion in gross services volume. As part of shifting the go to market strategy, small and medium sized business customers will move to a fully self-service offering, allowing Upwork’s sales force to focus on capturing the $3.5 trillion in gross services volume that large enterprise customers currently spend on contingent labor. As Upwork’s sales team targets the large underserved market opportunity presented by enterprise customers and raises awareness of the quality verified modular work units available in Project Catalogue, there is a long runway for Upwork to power offline to online conversion in the on demand labor marketplace while breaking down the barriers to adoption and growing the overall size of the market.

4. Capri Holdings Limited (NYSE: CPRI)

Number of Hedge Fund Holders: 42

Capri Holdings is a luxury fashion brands giant which is behind Versace, Jimmy Choo and Michael Kors. The company is set to gain from its timely ecommerce penetration and the upcoming economic recovery in the world as people are desperate to go back to the luxury shopping experience. In February, the company said its ecommerce sales soared by a whopping 65% sequentially in the fiscal third quarter. The company said that it expects EPS and revenue to exceed pre-pandemic levels by 2023. Jim Cramer and Bob Lang from Explosive Options said in March that high-end retail stocks have more room to run. The analysts specifically mentioned Capri stock and gave bullish comments based on their technical analysis.

A total of 42 hedge funds tracked by Insider Monkey were bullish CPRI at the end of the fourth quarter, up from 36 funds a quarter earlier.

Avory & Co, in their Q4 2020 investor letter, said that they have a positive outlook on Capri Holdings Limited (NYSE: CPRI) because of the commendable efforts of its management. Here is what Avory & Co has to say about Capri Holdings Limited in their Investor Letter:

“John Idol, was amongst the most nimble and resilient CEOs in 2020. Capri, as most of the retail sector, faced various challenges; 1) Supply disruptions in their leather goods as a result of the large impact covid had on Italy, 2) Dwindling demand as brick and mortar locations were forced to shut down globally and 3) Debt due in December of 2020. John acted quickly and reduced his cost base through global furloughs, delayed reopenings, turned to social selling and clienteling, was able to refinance all the debt in 2020 and pushed it out multiple years, along with getting their three brands, Jimmy Choo, Versace, and Michael Kors to positive or mid negative single-digit comparable sales by August. Coming out of Covid Capri is a leaner business. Versace is realizing positive sales, and they now expect 2020 to be a profitable year. We believe that this type of management execution can and should totally transform the narrative around this company for many years to come.”

3. DraftKings Inc. (NASDAQ: DKNG)

Number of Hedge Fund Holders: 48

DraftKings is added in our list of top stocks to invest in for beginner investors because it remains the market leader in the sports betting industry which is set to thrive as states legalize online sports betting platforms. Loop Capital in March said DraftKings is one of the biggest beneficiaries of the $3 billion market opportunity in New York. DraftKings is now reaching 25% of the US population, and remains the top choice for sports betting for average users. The company is also increasing its partnerships with industry leaders. It recently became the official partner of WWE. The company also has partnerships with ESPN, Major League Baseball and the PGA Tour.

Tybourne Capital Management is one of the 48 hedge funds tracked by Insider Monkey having stakes in DKNG at the end of the fourth quarter. The fund owns over 1.9 million shares of the company.

Carillon Tower Advisers, in their Q4 2020 investor letter, mentioned DraftKings Inc. (NASDAQ: DKNG). Here is what Carillon Tower Advisers has to say about DraftKings Inc. in their Q4 2020 investor letter:

“DraftKings is a digital sports entertainment and gaming company that provides online and retail sports wagering, online daily fantasy contests, and online casino games. The firm’s shares underperformed, despite reporting strong earnings and outlook with its most recent quarterly update. The stock pulled back meaningfully from its highs in October as it needed to work through a notable share lockup expiry. We remain bullish on the future growth prospects of the online sports gambling industry and believe DraftKings is positioned exceptionally well to capitalize on what appears to be a long-term secular trend.”

2. Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX)

Number of Hedge Fund Holders: 53

Vertex Pharmaceutical is one of the top stocks to invest in for beginner investors. The company makes treatment for various diseases including cystic fibrosis (CF), antitrypsin deficiency, kidney diseases, sickle cell disease and beta thalassemia. The company recently received positive recommendation from the European Medicines Agency’s Committee for Medicinal Products for Human Use for its treatment of cystic fibrosis. Citi recently added the stock to its Focus list, with a price target of $325. The firm said that Vertex has many growth catalysts, including VX-864 Phase 2 proof-of-concept study in Alpha-1 Antitrypsin deficiency data expected in the first half of 2021.

A total of 53 hedge funds tracked by Insider Monkey were bullish VRTX at the end of the fourth quarter, down from 55 funds a quarter earlier.

Alger Spectra Fund, in their Q4 2020 investor letter, mentioned Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX). Here is what Alger Spectra Fund has to say about Vertex Pharmaceuticals Incorporated in their Q4 2020 investor letter:

“Vertex Pharmaceuticals has become the world’s leading cystic fibrosis company by introducing the first drugs that treat the underlying disease rather than just the symptoms. Cystic fibrosis is caused by genetic abnormalities. Vertex has been able to target the proteins made by defective genes and allow them to function more normally. The shares detracted from portfolio performance when Vertex announced a disappointment in its drug discovery efforts for VX-814, one of two treatments the company is developing for Alpha-1Antitrypsin Deficiency (AATD), a genetic disorder that causes lung and liver disorders. The very surprising results were released three months earlier than expected and are delaying the development of the AATD drug.”

1. Square, Inc. (NYSE: SQ)

Number of Hedge Fund Holders: 89

Square is one of the top stocks to invest in for beginner investors. Even though the SQ stock has gained over 400% over the last 12 months, analysts believe the stock still has a huge room to run amid the company’s foray into new products and lucrative markets. KBW analyst Sanjay Sakhrani recently upgraded the stock to Outperform, citing the company’s presence and growth in the market and Square’s Seller and Cash App ecosystems. The analyst has a $250 price target for SQ. Square is set to benefit from the ecommerce boom across the world because the company now offers a complete ecosystem of services for ecommerce players, including web hosting, PoS software and accepting payments.

As of the end of the fourth quarter of 2020, Catherine Wood’s ARK Investment Management owns 7.08 million shares of Square Inc. worth $1.5 billion. SQ accounts for 4.1% of ARK’s total portfolio.

Baron FinTech Fund, in their Q4 2020 investor letter, mentioned Square, Inc. (NYSE: SQ). Here is what Baron FinTech Fund has to say about Square, Inc. in their Q4 2020 investor letter:

“Square, Inc. was the top contributor due to strong performance from its Cash App business and expectations for an improvement in its Seller business as consumers return to restaurants, coffee shops, and retail stores.

Square, Inc. provides point-of-sale technology to small businesses and operates the Cash App ecosystem of financial services for individuals. The stock increased after the company reported strong financial results for the most recent quarter. Cash App’s gross profit increased 212%, driven by record new users and engagement while the Seller business was resilient despite headwinds from COVID-19.We continue to own the stock due to, in our view, Square’s long runway for growth, sustainable competitive advantages, and unique corporate culture.”

You can also take a peek at Ricky Sandler’s Top 10 Stock Picks and 10 Best 5G Stocks to Buy Now.

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