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10 Best Stocks to Buy According to Steven Baughman’s Divisar Capital

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In this article, we will be discussing the 10 best stocks to buy according to Steven Baughman's Divisar Capital. If you want to skip our detailed analysis of Steven Baughman’s hedge fund returns, investment philosophy, and history, you can click and go directly to the 5 Best Stocks to Buy According to Steven Baughman's Divisar Capital.

Steven Richard Baughman, the founder of the hedge fund Divisar Capital, is now the company's Chief Compliance Officer and Managing Member. Mr. Baughman previously worked for ParVest Asset Management, Inc. as a Vice President. He earned a bachelor's degree from Stanford University. Divisar Capital, founded in 2009, is based in San Francisco, California. The hedge fund’s 13F portfolio is valued at approximately $295.91 million as of the end of the first quarter of 2021.

As of the end of the first quarter, some notable stock picks of Steven Baughman's portfolio include Lumentum Holdings Inc. (NASDAQ: LITE), Box, Inc. (NYSE: BOX) and Cooper-Standard Holdings Inc. (NYSE: CPS).

In Lumentum Holdings Inc. (NASDAQ: LITE), Steven Baughman owns 210,474 shares. The investment covers an impressive 6.49% of the fund’s portfolio. On May 12, Lumentum Holdings Inc. (NASDAQ: LITE) posted earnings for the third quarter of 2021. It reported earnings per share of $1.40, in line with the previous. However, the revenue for the first three months of 2021 was over $419.5 million, missing the estimates by $13.9 million.

Based on the latest 13F holdings for the first quarter of 2021, Divisar Capital owns 647,448 shares in Box, Inc. (NYSE: BOX) after cutting its holding in the company by 24% from the fourth quarter of 2020. On July 21, RBC Capital analyst Rishi Jaluria initiated coverage on Box, Inc. (NYSE: BOX) with an “Underperform” rating and a price target of $19.

Divisar Capital also has a stake in Cooper-Standard Holdings Inc. (NYSE: CPS), even though the hedge fund slashed its stake in the company by 15% in the first quarter. It still owns 333,071 shares of the company, worth over $12 million. On May 6, Cooper-Standard Holdings Inc. (NYSE: CPS) released the first quarter of 2021 earnings. Its earnings per share was -$0.85, in line with the previous. Revenue for the first three months of 2021 was $669 million, beating the expectations by $44 million.

Photo by Nicholas Cappello on Unsplash

The influx of retail investors on the market and the resulting rise of meme stocks has left experts scratching their heads. 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.

With this context in mind, here is our list of 10 best stocks to buy according to Steven Baughman's Divisar Capital. We used Baughman's 13F portfolio for the first quarter for this analysis.

Best Stocks to Buy According to Steven Baughman's Divisar Capital

10. TTM Technologies, Inc. (NASDAQ: TTMI)

Baughman's Stake Value: $12,953,000 Percentage of Steven Baughman's 13F Portfolio: 4.37% Number of Hedge Fund Holders: 21

TTM Technologies, Inc. (NASDAQ: TTMI) produces and sells printed circuit boards (PCBs) through its subsidiaries. It was founded in 1978 and is placed tenth on the list of 10 best stocks to buy according to Steven Baughman's Divisar Capital. The company’s stock has offered investors more than 16.28% in returns over the course of the past twelve months.

On July 28, TTM Technologies, Inc. (NASDAQ: TTMI) reported profits for the second quarter of 2021. The firm reported earnings per share of $0.36, topping market expectations by $0.06. Revenue was $567.4 million, surpassing forecasts by $20.68 million.

Divisar Capital holds 893,330 shares in TTM Technologies, Inc. (NASDAQ: TTMI), worth over $12 million. This represents 4.37% of their portfolio. The hedge fund’s stake in TTM Technologies, Inc. (NASDAQ: TTMI) decreased by 25% in the first quarter of 2021. Nevertheless, the company is getting the attention of the smart money, as 21 hedge funds tracked by Insider Monkey reported owning stakes in the company at the end of the first quarter, up from 20 funds a quarter earlier.

Just like Lumentum Holdings Inc. (NASDAQ: LITE), Box, Inc. (NYSE: BOX) and, Cooper-Standard Holdings Inc. (NYSE: CPS), TTM Technologies, Inc. (NASDAQ: TTMI) is one of the best stocks to buy according to Steven Baughman's Divisar Capital.

9. Photronics, Inc. (NASDAQ: PLAB)

Baughman's Stake Value: $14,468,000 Percentage of Steven Baughman's 13F Portfolio: 4.88% Number of Hedge Fund Holders: 16

Photronics, Inc. (NASDAQ: PLAB) with its subsidiaries produces and sells photomask products and services in the United States, Taiwan, Korea, Europe, China, and other foreign markets. The company was founded in 1969 and stands ninth on the list of 10 best stocks to buy according to Steven Baughman's Divisar Capital. The shares of Photronics surged 34.59% in the past 12 months.

On May 26, Photronics, Inc. (NASDAQ: PLAB) released earnings for the second quarter of 2021. The firm reported earnings per share of $0.17, in line with the previous. Revenue was $159.8 million, up 11.9% year over year, beating the forecast by $1.53 million. For the third quarter of 2021, Photronics anticipates revenue to be within $162 million and $172 million, with diluted earnings per share between $0.19 and $0.25 per diluted share.

The hedge fund chaired by Steven Baughman holds 1.13 million shares in Photronics, Inc. (NASDAQ: PLAB) worth over $14.47 million. Divisar Capital's stake in Photronics shares decreased by 11% in the past few months. There were 16 hedge funds in our database that held stakes in Photronics, Inc. (NASDAQ: PLAB) at the end of the first quarter of 2021, compared to 21 funds in the fourth quarter. Just like Lumentum Holdings Inc. (NASDAQ: LITE), Box, Inc. (NYSE: BOX) and, Cooper-Standard Holdings Inc. (NYSE: CPS), Photronics, Inc. (NASDAQ: PLAB) is one of the best stocks to buy according to Steven Baughman's Divisar Capital.

8. Box, Inc. (NYSE: BOX)

Baughman's Stake Value: $14,865,000 Percentage of Steven Baughman's 13F Portfolio: 5.02% Number of Hedge Fund Holders: 43

Box, Inc. (NYSE: BOX) is a Cloud-based file sharing and data storage company. The company was founded in 2005 and ranks eighth on the list of 10 best stocks to buy according to Steven Baughman's Divisar Capital. Box, Inc. (NYSE: BOX) currently has a $3.83 billion market capitalization, and was able to deliver a 45.11% return in the past 12 months.

On July 21, On July 7, Box, Inc. (NYSE: BOX) declared that it expanded its relationship with BT, a major provider of global communications services and solutions. Under the extended cooperation, Box, Inc. (NYSE: BOX) enables sophisticated, workflow-driven content management for BT's Global business. Earlier in May, Box, Inc. (NYSE: BOX) announced earnings for the first quarter of 2021. The company proclaimed earnings per share of $0.18, beating the market predictions by $0.01. The revenue over the period was $202.44 million, 10.3% YoY, beating the estimates by $2.01 million. The company increased financial year 2022 revenue forecast to $845 to $853 million, vs. consensus of $844.73 million.

Divisar Capital holds 647,448 shares in Box, Inc. (NYSE: BOX) worth over $14 million, representing 5.02% of its portfolio. The hedge fund has trimmed stakes in the firm by 24% in the past few months.

Just like Lumentum Holdings Inc. (NASDAQ: LITE), and Cooper-Standard Holdings Inc. (NYSE: CPS), Box, Inc. (NYSE: BOX) is one of the best stocks to buy according to Steven Baughman's Divisar Capital.

7. Ultra Clean Holdings, Inc. (NASDAQ: UCTT)

Baughman’s Stake Value: $17,486,000 Percentage of Steven Baughman’s 13F Portfolio: 5.9% Number of Hedge Fund Holders: 17

Ultra Clean Holdings, Inc. (NASDAQ: UCTT) creates production tools, modules, and subsystems globally for the semiconductor and display capital equipment sectors. The company was founded in 1991 and is placed seventh on the list of 10 best stocks to buy according to Steven Baughman's Divisar Capital. Ultra Clean stock has offered 71.66% returns to investors over the course of the past 12 months.

On August 2, Ultra Clean Holdings, Inc. (NASDAQ: UCTT) posted its earnings for the second quarter of 2021. It posted earnings per share of $0.99, beating the market predictions by $0.03. The revenue over the period was $515.2 million, beating the estimates by $9.76 million. The company also declared third quarter guidance. It expects revenue to be between $520 million to $560 million, above the consensus of $505.44 million. Net income per share is expected to be in the range of $0.94 to $1.10, exceeding the consensus of $0.96. On April 29, Stifel analyst Patrick Ho raised the firm's price target on Ultra Clean Holdings, Inc. (NASDAQ: UCTT) to $71 from $65 and maintained a “Buy” rating on the shares.

Divisar Capital holds 301,278 shares in Ultra Clean Holdings, Inc. (NASDAQ: UCTT), worth over $17 million, representing 5.9% of their portfolio. The hedge fund has trimmed stakes in the firm by 60% in the past few months. Royce & Associates is a leading shareholder in Ultra Clean, with 819,174 shares worth more than $44 million. Just like Lumentum Holdings Inc. (NASDAQ: LITE), Box, Inc. (NYSE: BOX) and, Cooper-Standard Holdings Inc. (NYSE: CPS), Ultra Clean Holdings, Inc. (NASDAQ: UCTT) is one of the best stocks to buy according to Steven Baughman's Divisar Capital.

6. Tilly's, Inc. (NYSE: TLYS)

Baughman’s Stake Value: $18,145,000 Percentage of Steven Baughman’s 13F Portfolio: 6.13% Number of Hedge Fund Holders: 15

Tilly's, Inc. (NYSE: TLYS) is a specialty shop in the United States that sells casual clothes, footwear, accessories, and goods to young men and women, as well as boys and girls. It was incorporated in 1982 and is ranked sixth on the list of 10 best stocks to buy according to Steven Baughman's Divisar Capital. The company’s stock has gained a whopping 141.84% over the last 12 months.

On June 9, Tilly's, Inc. (NYSE: TLYS) declared a special dividend of $1.00 per share or approximately $31 million aggregate special dividend. On June 3, the company announced earnings for the first quarter of 2021. It posted earnings per share of $0.36, beating the estimates by $0.40. In addition, the revenue over the period was $163.16 million, 111.1% YoY, surpassing the predictions by $34.25 million.

The hedge fund managed by Steven Baughman holds 1.60 million shares in Tilly's, Inc. (NYSE: TLYS), worth over $18 million, representing 6.13% of their portfolio. As of the end of the first quarter, 15 hedge funds in Insider Monkey’s database of 866 funds held stakes in Tilly's compared to 13 funds in the quarter earlier.

Just like Lumentum Holdings Inc. (NASDAQ: LITE), Box, Inc. (NYSE: BOX) and, Cooper-Standard Holdings Inc. (NYSE: CPS), Tilly's, Inc. (NYSE: TLYS) is one of the best stocks to buy according to Steven Baughman's Divisar Capital.

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Disclosure: None. 10 Best Stocks to Buy According to Steven Baughman's Divisar Capital is originally published on Insider Monkey.