In this article, we will be taking a look at the 10 best long-term stocks to buy now To skip our detailed analysis of these stocks and their past performance, you can go directly to see the 5 Best Long-Term Stocks to Buy Now.
In a market downturn like the one we are experiencing today, investors are looking for stocks that can complement existing portfolios or help build newer, diversified portfolios. When it comes to sector research, Fidelity's 2022 US Sector Outlook report notes the artificial intelligence, real estate investment trust, and energy sectors as some of the top areas to look at for investment ideas. The energy sector was the only sector out of 11 S&P sectors that remained in positive territory this year. It rose by 20% year to date, while the benchmark dropped by 19.8%, according to Reuters.
Many stocks that have historically performed well on the market, such as Shopify Inc. (NYSE:SHOP), Target Corporation (NYSE:TGT), and Netflix, Inc. (NASDAQ:NFLX), have been trading low due to the current market condition. These stocks themselves are down 68.9%, 26.8%, and 60.1% year to date, respectively. Declining share prices are now offering investors a chance to buy well-positioned and profitable stocks at discounted rates.
The market is currently seeing a returning trend that favors value investing. According to Bloomberg this June, the S&P Pure Value Index has returned about 8% with dividends since mid-November. In comparison, the S&P Pure Growth index lost its investors 25% of their earnings. On the exchange-traded funds front alone, value investment strategies have benefitted from $55 billion in inflows as of June 2022, while a net outflow of $1 billion was recorded for growth strategies. The ever-rising inflation and interest rates are among the main factors for this renewed interest in cheaply-valued stocks that are stellar performers and good for long-term investing.
We can now take a look at the 10 best long-term stocks to buy now.
For our list, we have selected stocks that are currently trading at low share prices of under $90 that are expected to perform well in the long-term due to factors like positive earnings per share, revenue growth, and profitable products, among more. These stocks are also popular among hedge funds today, as demonstrated by Insider Monkey's hedge fund data for the first quarter when 912 hedge funds were tracked. The stocks also have mostly positive analyst ratings and price targets showing upside potential. They are ranked based on the number of hedge funds holding stakes in them, from the lowest to the highest number of hedge fund stakeholders.
Best Long-Term Stocks to Buy Now
10. Revolve Group, Inc. (NYSE:RVLV)
Number of Hedge Fund Holders: 23
Share price as of August 8: $27.35
Revolve Group, Inc. (NYSE:RVLV) is an online fashion retailer serving consumers in the US and internationally. The company operates through its REVOLVE and FWRD segments to operate a platform that connects consumers to fashion influencers and brands. It offers women's apparel, footwear, accessories, and beauty styles.
An Outperform rating was reiterated on Revolve Group, Inc. (NYSE:RVLV) shares this August by analyst Oliver Chen at Cowen. Chen also holds a $32 price target on the stock.
Revolve Group, Inc. (NYSE:RVLV) has a P/E ratio of 19.8, and the company has demonstrated sales growth in 2022 with a 58% increase in sales in the first quarter. The company's unique model uses data collected over 18 years to inform its AI-based algorithms, allowing it to show consumers just what they want to buy. This has grown its customer base by 38% over the last year. FWRD, the high-fashion website operated by Revolve Group, Inc. (NYSE:RVLV), grew the company's sales by 71% in 2021 as well. While the company's shares are trading low today, it is a stock that will perform well in the long-term due to the impressive growth shown by the factors mentioned above.
There were 23 hedge funds long Revolve Group, Inc. (NYSE:RVLV) in the first quarter, with a total stake value of $362 million. Fisher Asset Management held the largest position in the company, holding 1,703,038 shares worth $91.4 million.
Polen Capital, an investment management firm, mentioned Revolve Group, Inc. (NYSE:RVLV) in its first quarter 2022 investor letter. Here's what they said:
“Online fashion retailer Revolve had another favorable quarter, and our investment in this company has continued to compound at a high level. We were impressed with the company’s recent results, especially the combination of customer growth, the growing number of orders per customer, and improving average order values. We believe the company still has considerable room for growth as it benefits from the bourgeoning trend of fashion going online, while its investments in adjacent categories, like beauty, are increasing the market opportunity its addressing.”
Stocks like Shopify Inc. (NYSE:SHOP), Target Corporation (NYSE:TGT), and Netflix, Inc. (NASDAQ:NFLX) have historically been popular among hedge funds, and Revolve Group, Inc. (NYSE:RVLV) is steadily joining their ranks.
9. CarGurus, Inc. (NASDAQ:CARG)
Number of Hedge Fund Holders: 29
Share price as of August 8: $25.69
CarGurus, Inc. (NASDAQ:CARG) is a communication services company operating an online automotive marketplace that connects buyers and sellers of new and used cars. The company operates primarily online under the CarGurus brand in Canada and the UK, and through the Autolist and PistonHeads marketplaces in the US and UK.
Truist analyst Naved Khan holds a Buy rating on CarGurus, Inc. (NASDAQ:CARG) shares as of this July. Khan also placed a $44 price target on the stock.
In June, Oppenheimer said that CarGurus, Inc. (NASDAQ:CARG) was accelerating faster than its competitors in the market for online auto sales. The company boasts an asset-light business model, wrapping up the first quarter with no long-term debt, alongside $375 million in cash, cash equivalents, and short-term investments. CarGurus, Inc.'s (NASDAQ:CARG) growth this year was further shown by its non-GAAP operating income of $62.2 million in the first quarter, a 28% rise compared to last year. It is one of the best long-term stocks to buy now because of its proprietary valuation tech, according to a team of analysts at Oppenheimer.
In the first quarter of 2022, 29 hedge funds held stakes in CarGurus, Inc. (NASDAQ:CARG), compared to 24 hedge funds in the previous quarter. Their total stake values were $338.9 million and $292.5 million respectively.
8. PDC Energy, Inc. (NASDAQ:PDCE)
Number of Hedge Fund Holders: 32
Share price as of August 8: $55.11
PDC Energy, Inc. (NASDAQ:PDCE) is an independent exploration and production company that acquires and produces crude oil, natural gas, and natural gas liquids in the US. The company primarily operates in the Wattenberg Field in Colorado and the Delaware Basin in Texas. It owned interests in about 3,500 productive gross wells as of December 2021.
This July, the price target on shares of PDC Energy, Inc. (NASDAQ:PDCE) was raised from $94 to $105 by Truist analyst Neal Dingmann. Dingmann also reiterated a Buy rating on the stock.
The company's EPS in the second quarter was $5.1, beating estimates by $0.6, while its revenue of $1.1 billion also beat estimates by $100.9 million. PDC Energy, Inc. (NASDAQ:PDCE) also offers an attractive dividend of 2.5% as of August 8, making it a tempting stock pick for income investors. It raised its free cash flow guidance to $1.7 billion, 25% of the company's market cap, in May, a figure that is $400 million higher than the free cash flow guidance it offered in February. PDC Energy, Inc.'s (NASDAQ:PDCE) 2022 capital investment is also set to rise by $25 million to $975 million. These factors imply that the stock is reliable in the long-term.
Out of the 32 hedge funds long PDC Energy, Inc. (NASDAQ:PDCE) in the first quarter, Royce & Associates was the largest stakeholder in the company. Holding 126,761 shares, the fund's stake value was $7.8 million, compared to a total stake value of $401.6 million.
PDC Energy, Inc. (NASDAQ:PDCE), like Shopify Inc. (NYSE:SHOP), Target Corporation (NYSE:TGT), and Netflix, Inc. (NASDAQ:NFLX), is a stock that has been trading below its true value. It thus offers investors the opportunity to buy growth shares at a heavily discounted price.
7. VICI Properties Inc. (NYSE:VICI)
Number of Hedge Fund Holders: 36
Share price as of August 8: $34.45
VICI Properties Inc. (NYSE:VICI), a real estate investment trust, owns one of the largest portfolios of market-leading gaming, hospitality, and entertainment destinations. Caesars Palace is one of the company's major properties. Its ownership spans over 48 million square feet consisting of 29 gaming facilities.
Analyst Steve Sakwa at Evercore ISI resumed coverage of VICI Properties Inc. (NYSE:VICI) shares this July with an Outperform rating. Sakwa also placed a $37 price target on the shares.
In June, VICI Properties Inc. (NYSE:VICI) noted that its 43 properties brought in $2.6 billion as annualized cash rent as of May 30. The company is planning to acquire more real estate assets from Cabot Citrus Farms, after already acquiring MGM Growth Properties in the second quarter. VICI Properties Inc.'s (NYSE:VICI) revenue growth in that quarter also led to the stock rising this July. Its revenue was $662.6 million, up 76% year over year and beating estimates by $67.1 million, adding to the list of factors ensuring the stock will perform well over the long-term. The company also offers an impressive dividend at a 4.2% yield as of August 8.
Of the 912 hedge funds tracked in the first quarter of 2022, 36 funds were long VICI Properties Inc. (NYSE:VICI), with a total stake value of $998 million. In the previous quarter, 37 hedge funds were long the stock, with a total stake value of $1.1 billion.
6. Clarivate Plc (NYSE:CLVT)
Number of Hedge Fund Holders: 36
Share price as of August 8: $14.34
Clarivate Plc (NYSE:CLVT) is an information services and analytics company. It provides structured information and analytics for discovery protection and commercialization of scientific research, innovations, and brands.
An Overweight rating was placed on Clarivate Plc (NYSE:CLVT) shares this July by Wells Fargo's Seth Weber. Weber also placed a $20 price target on the stock.
Clarivate Plc (NYSE:CLVT) acquired ProQuest, another data and analytics company, in 2021. This acquisition grew its sales by 4.4% in the first quarter, after excluding acquisitions and foreign currency. The company's adjusted net income also rose by 75.4% to $155.1 million, compared to last year. Several other factors also show the positive long-term performance of this stock. This June at the William Blair Conference, Clarivate Plc (NYSE:CLVT) said it expects organic growth of 5.5% to 6% in the second quarter. The company also expects over $1.5 billion in adjusted free cash flow generation over the next two years. It reaffirmed its 2022 guidance for revenue and EPS to be between $2.8 billion - $2.9 billion and $0.85 - $0.95 respectively, versus consensus estimates of $2.8 billion and $0.9.
Our hedge fund data shows 36 hedge funds long Clarivate Plc (NYSE:CLVT) in the first quarter, with a total stake value of $3.9 billion. Of these funds, Leonard Green & Partners was the largest stakeholder in the company, holding 116,666,507 shares worth $1.9 billion.
Baron Funds, an asset management firm, mentioned Clarivate Plc (NYSE:CLVT) in its first quarter 2022 investor letter. Here's what they said:
“We reduced our stake in Clarivate Plc (NYSE:CLVT), an information services company focused on the scientific and academic markets, after the company reported particularly disappointing fourth quarter earnings results.”
Shopify Inc. (NYSE:SHOP), Target Corporation (NYSE:TGT), Netflix, Inc. (NASDAQ:NFLX), and Clarivate Plc (NYSE:CLVT) are among the best stocks institutional investors have been pouring into this year.
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Disclosure: None. 10 Best Long-Term Stocks to Buy Now was originally published on Insider Monkey.