In this article, we discuss the 10 best booming stocks to buy now. If you want to skip our detailed analysis of these stocks, go directly to 5 Best Booming Stocks to Buy Now.
Despite predictions of an impending recession since mid-2022, the US economy has not shown any signs of a downturn in the past nine months. Factors such as increasing interest rates, high inflation, an inverted yield curve, and an unexpected banking crisis have all been cited as potential triggers for a recession. The New York Fed's recession probability indicator, which is at its highest level in over four decades, suggests a 68.2% chance of a US recession within the next year. Other reliable economic indicators also indicate warning signs for the US economy. However, despite these factors, the labor market in the US remains strong, and economists have differing opinions on whether a recession is inevitable given the unique economic circumstances. Recession is a common occurrence in economic cycles and has historically presented attractive opportunities for long-term investors.
Although the first quarter showed strong performance, the forecast for real GDP growth is revised in 2023 to 0.9%. However, a recession is anticipated in the latter half of the year, which will drag down growth to 0.8% in 2024. The headline CPI inflation is expected to average 4.0% in 2023 before easing to 2.8% in 2024. As part of ongoing efforts to tighten credit, the Federal Reserve recently raised its policy rate once more to a range of 5.00-5.25%. This additional credit tightening is expected to result in 25-100 basis points of rate hikes and roughly a 0.25 percentage point decrease in real GDP growth in 2023. It is anticipated that the 10-year Treasury yield to reach 3.4% by the end of 2023 and 3.0% in 2024.
The US stock market is booming. Some of the top stocks to monitor as the US recovers from recession fears and embarks on a path to growth include NVIDIA Corporation (NASDAQ:NVDA), DraftKings Inc. (NASDAQ:DKNG), and Exact Sciences Corporation (NASDAQ:EXAS). As the stock market soars, the economy is showing signs of picking up as well. The significance of the US economy lies in its role as an engine of global economic growth, its influence on financial markets and trade, and its capacity for innovation and technological advancement. Changes in the US economy, and by extension US stocks, can have far-reaching implications, impacting not only the domestic population but also businesses, investors, and economies worldwide.
For this article, we selected stocks that have gained more than 30% in price over the past six months and ranked them based on overall hedge fund sentiment. We have assessed the hedge fund sentiment from Insider Monkey’s database of 943 elite hedge funds tracked as of the end of the first quarter of 2023. The list is arranged in ascending order of the number of hedge fund holders in each firm.
Best Booming Stocks to Buy Now
10. Opera Limited (NASDAQ:OPRA)
Number of Hedge Fund Holders: 8
Percentage Increase in Share Price Over Past Six Months: 267%
Opera Limited (NASDAQ:OPRA) provides mobile and PC web browsers. The company recently launched a new integrated messaging service called Hype. Hype aims to combine social media, chat, and streaming services into one platform. The service will initially be available in Africa, starting with Kenya, South Africa, and Nigeria. In late April, the firm also beat top and bottom line estimates on earnings for the first quarter of 2023, raising the full year fiscal outlook.
On June 1, investment advisory TD Cowen maintained an Outperform rating on Opera Limited (NASDAQ:OPRA) stock and raised the price target to $19 from $14, noting the firm was in the early stages of its above-average revenue growth and margin expansion.
Among the hedge funds being tracked by Insider Monkey, Baltimore-based investment firm Greenhouse Funds is a leading shareholder in Opera Limited (NASDAQ:OPRA) with 2.2 million shares worth more than $22 million.
Just like NVIDIA Corporation (NASDAQ:NVDA), DraftKings Inc. (NASDAQ:DKNG), and Exact Sciences Corporation (NASDAQ:EXAS), Opera Limited (NASDAQ:OPRA) is one of the booming stocks to buy right now.
In its Q1 2023 investor letter, Fairlight Capital, an asset management firm, highlighted a few stocks and Opera Limited (NASDAQ:OPRA) was one of them. Here is what the fund said:
“We mentioned in our previous quarterly letter that we had built a position in Opera Limited (NASDAQ:OPRA) and that it had just declared a dividend (along with a host of other positive business developments). We continue to hold this position after building a position at prices between $5 and $6; the stock trades as of the time of writing at $10.95. This is one of those ideas that has several elements to the investment thesis as well as a continually evolving business picture.
To summarize, the thesis is a combination of value, substantial cash and investee balances creating an attractive enterprise valuation combined with growth and business opportunities. As of the last quarter cash balances were $119 million. The company also owns a portion of several investee businesses and managed to move its investment in Nanobank4 to the more attractive OPay business at a good valuation. The cash plus investee balances total $436 million (depending on valuation assumptions that are likely conservative for OPay) giving the company an enterprise value of approximately $550 million at the time of writing. Performing a normalized earnings analysis, we estimate a level of net income of $119 million. This is then equivalent to an EVE of 4.6x. This is even after the share price doubled in the last two months…” (Click here to read the full text)
9. UFP Technologies, Inc. (NASDAQ:UFPT)
Number of Hedge Fund Holders: 13
Percentage Increase in Share Price Over Past Six Months: 34%
UFP Technologies, Inc. (NASDAQ:UFPT) designs, engineers, and manufactures solutions for medical devices, sterile packaging, and other highly engineered custom products. In March, the firm posted earnings for the fourth fiscal quarter, reporting earnings per share of $1.10, beating market estimates by $0.19. The revenue over the period was $91 million, up more than 60% compared to the revenue over the same period last year and beating expectations by $5 million. The firm has stepped up investments in single-use medical devices over the past few months.
On May 3, Lake Street analyst Jaeson Schmidt maintained a Buy rating on UFP Technologies, Inc. (NASDAQ:UFPT) stock and raised the price target to $171 from $131, appreciating the strong execution and significant earnings power of the firm.
Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm AltraVue Capital is a leading shareholder in UFP Technologies, Inc. (NASDAQ:UFPT) with 296,411 shares worth more than $38 million.
“Another meaningful contributor was UFP Technologies, Inc. (NASDAQ:UFPT), which designs and manufactures a range of high-performance cushion packaging and specialty foam and plastic products for industrial and consumer markets. In the past, UFP also made precision-molded fiber packaging primarily from recycled paper. But the company recently divested from that business segment due to margins being lower than those in other business segments. Conversely, UFP has made acquisitions of firms serving the higher-margin medical industry. The company’s recent revenues and earnings were strong, which boosted the stock price. Moreover, with elective medical procedures ramping up after declines amid the pandemic, we expect UFP will start to experience faster growth and even better margins.”
8. Aehr Test Systems (NASDAQ:AEHR)
Number of Hedge Fund Holders: 18
Percentage Increase in Share Price Over Past Six Months: 80%
Aehr Test Systems (NASDAQ:AEHR) provides test systems for burning-in semiconductor devices in wafer level, singulated die, and package part form worldwide. The company recently announced plans to establish a manufacturing facility in Australia. The factory will produce solar trackers to support the country's growing renewable energy sector. The move aims to reduce costs and increase accessibility of solar technology in Australia.
At the end of the first quarter of 2023, 18 hedge funds in the database of Insider Monkey held stakes worth $92 million in Aehr Test Systems (NASDAQ:AEHR), compared to 17 the preceding quarter worth $63 million.
7. e.l.f. Beauty, Inc. (NYSE:ELF)
Number of Hedge Fund Holders: 30
Percentage Increase in Share Price Over Past Six Months: 91%
e.l.f. Beauty, Inc. (NYSE:ELF) provides cosmetic and skin care products. In the fourth fiscal quarter, the firm posted a 78% net jump in sales year-over-year. Per the management of the firm, this was driven by pricing actions that acted as a key driver of the margin expansion. In addition, supply chain improvements and negotiations with suppliers for lower transportation costs contributed too. These dynamics helped the firm with profitability improvement.
On May 25, Piper Sandler analyst Korinne Wolfmeyer maintained an Overweight rating on e.l.f. Beauty, Inc. (NYSE:ELF) stock and raised the price target to $114 from $105, noting the sales growth of the firm continued to surpass expectations.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Driehaus Capital is a leading shareholder in e.l.f. Beauty, Inc. (NYSE:ELF) with 981,351 shares worth more than $80 million.
“New positions initiated in Q4 included shorts International Business Machines (IBM), Acushnet Holdings (GOLF) and E.l.f. Beauty, Inc. (NYSE:ELF). Shares of value-oriented beauty brand ELF received a meaningful boost from normalizing beauty usage and spending in a post-COVID environment, which we believe has contributed to its premium multiple relative to competitors in the beauty space. As this temporary lift unwinds, we expect elf’s valuation to similarly return to a level better aligned with its product offerings.”
6. Axcelis Technologies, Inc. (NASDAQ:ACLS)
Number of Hedge Fund Holders: 34
Percentage Increase in Share Price Over Past Six Months: 108%
Axcelis Technologies, Inc. (NASDAQ:ACLS) markets ion implantation and other processing equipment used for the fabrication of semiconductor chips. The firm recently announced that it would be shipping multiple Purion H200 SiC Power Series ion implanter systems to power device chipmakers in Europe and Asia. The shipments include both evaluation and revenue systems that are used in high volume production of power devices supporting automotive industry EV applications.
On June 5, investment advisory William Blair initiated coverage of Axcelis Technologies, Inc. (NASDAQ:ACLS) stock with an Outperform rating, noting that the firm would increase its market share in SiC ion implantation, capturing a larger portion of the $6 billion estimated market.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Rima Senvest Management is a leading shareholder in Axcelis Technologies, Inc. (NASDAQ:ACLS) with 282,806 shares worth more than $37 million.
Along with NVIDIA Corporation (NASDAQ:NVDA), DraftKings Inc. (NASDAQ:DKNG), and Exact Sciences Corporation (NASDAQ:EXAS), Axcelis Technologies, Inc. (NASDAQ:ACLS) is one of the booming stocks to buy right now.
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Disclose. None. 10 Best Booming Stocks to Buy Now is originally published on Insider Monkey.