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10 Best Stocks to Buy According to Senvest Management

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·11 min read
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In this article, we will discuss the 10 best stocks to buy according to Richard Mashaal's Senvest Management. If you want to skip our detailed analysis of Mashaal's history, investment philosophy, and hedge fund performance, go directly to the 5 Best Stocks to Buy According to Richard Mashaal's Senvest Management.

Richard Ron Mashaal founded Senvest Management and currently serves as its Co-Chief Investment Officer. Mashaal also serves on the boards of Roadpost, Inc. and Senvest Capital, Inc.

Mashaal rose to fame after his fund gained about a whopping 60% in just two months by selling its stake in GameStop, thanks to the Reddit-fueled surge in the game retailer's stock. According to Bloomberg, Senvest Management LLC’s Senvest Master Fund LP returned 15.3% in February. The fund had owned close to 5 million shares of GameStop, which it sold in January 2021. Senvest is thus one of the hedge funds that profited from the meme stock craze.

Founded in April 1997, Senvest Management invests primarily in small and mid-cap value and growth stocks.

As of the first quarter of 2021, Richard Mashaal's Senvest Management holds stake in several big companies like Microsoft Corporation (NASDAQ: MSFT), Pfizer Inc. (NYSE: PFE), and Applied Materials, Inc. (NASDAQ: AMAT).

A notable tech company in Richard Mashaal's portfolio is Microsoft Corporation (NASDAQ: MSFT). The company shares have returned 39.75% to investors over the course of the past 12 months. On July 28, JPMorgan analyst Mark Murphy raised the price target on Microsoft Corporation (NASDAQ: MSFT) to $310 from $300 and kept an “Overweight” rating on the shares. On July 27, Microsoft Corporation (NASDAQ: MSFT) posted earnings for the fourth quarter of 2021. It reported earnings per share of $2.17, surpassing expectations by $0.25. The revenue for the first three months of 2021 was $46.2 billion, up 21.5% year over year, above expectations by $1.9 billion.

Senvest Management also has a stake in Pfizer Inc. (NYSE: PFE), as of the end of the first quarter. The hedge fund holds more than 243,800 shares in the company worth over $8 million, representing 0.27% of their portfolio. On July 26, Truist analyst Robyn Karnauskas initiated coverage on Pfizer Inc. (NYSE: PFE) with a “Buy” rating and a $43 price target. There were 65 hedge funds in our database that held stakes in Pfizer Inc. (NYSE: PFE) at the end of the first quarter of 2021, compared to 63 funds a quarter earlier. Pfizer shares have gained about 17.39% over the last 12 months.

Senvest Management owns 704,359 shares in Applied Materials, Inc. (NASDAQ: AMAT) after increasing its holding by 34% in Q1. The company's shares have gained a whopping 113.21% over the last 12 months. On June 10, Applied Materials, Inc. (NASDAQ: AMAT) declared a quarterly dividend of $0.24 per share, in line with the previous. On May 5, Susquehanna analyst Mehdi Hosseini raised the price target on Applied Materials, Inc. (NASDAQ: AMAT) to $170 from $155 and maintained a “Positive” rating on the shares. Hedge funds are loading up on Applied Materials, Inc. (NASDAQ: AMAT), as Insider Monkey’s data shows that 78 hedge funds held stakes in the company as of the end of the first quarter of 2021, compared to 61 funds in the fourth quarter of 2020.

Pixabay/Public Domain

Why pay attention to Mashaal's stock picks? 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 26, 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 16. That's why we believe hedge fund sentiment is a handy indicator that investors should consider. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.

Here are some of the 10 best stocks to buy according to Richard Mashaal's Senvest Management. We used Mashaal's 13F portfolio for the first quarter for this analysis.

Best Stocks to Buy According to Richard Mashaal's Senvest Management

10. MGM Resorts International (NYSE: MGM)

Mashaal's Stake Value: $89,430,000 Percentage of Richard Mashaal's 13F Portfolio: 2.81% Number of Hedge Fund Holders: 57

MGM Resorts International (NYSE: MGM) owns and operates casino, hotel, and entertainment resorts in the United States and Macau. It was incorporated in 1986 and is placed tenth on the list of 10 best stocks to buy according to Richard Mashaal's Senvest Management. MGM currently has a $18.72 billion market capitalization and was able to deliver a 133.25% return in the past 12 months.

On July 28, Goldman Sachs analyst Stephen Grambling upgraded MGM Resorts to “Neutral” from “Sell” with a price target of $43, up from $38. On July 21, MGM Resorts International (NYSE: MGM) and its Japanese partner ORIX Corporation (NYSE: IX) formally proposed constructing a $9 billion casino complex in Osaka, advancing a long-term expansion plan. Osaka's $10 billion resort will include a casino, hotels, restaurants, and other entertainment venues.

Senvest Management holds 2.35 million shares in the company worth $89.43 million, representing 2.81% of their portfolio. At the end of the first quarter of 2021, 57 hedge funds in the database of Insider Monkey held stakes worth $2.72 billion in MGM Resorts International (NYSE: MGM), up from 44 the preceding quarter worth $2.17 billion.

Just like Microsoft Corporation (NASDAQ: MSFT), Pfizer Inc. (NYSE: PFE), and Applied Materials, Inc. (NASDAQ: AMAT), MGM Resorts International (NYSE: MGM) is one of the best stocks to buy according to Richard Mashaal's Senvest Management.

Longleaf Partners Fund, in their first quarter 2021 investor letter, mentioned MGM Resorts International (NYSE: MGM). Here is what the fund said:

“MGM (21%, 1.44%), the casino and online gaming company, also contributed to the Fund’s strong returns. MGM’s Las Vegas properties performed particularly well during the fourth quarter, with October marking the best month since pre-COVID February, positive quarterly EBITDA and strong 2021 bookings. MGM’s online gaming and sportsbetting app, BetMGM, is one of the leaders in US online gaming, with a better market share in the more profitable iGaming than in the higher profile but lower margin sports gaming. MGM has demonstrated high conversion rates of its hotel guests and we believe that, with Barry Diller’s help, they will build a competitive long-term advantage with lower customer acquisition costs. MGM’s Macau subsidiary, MGM China, also appreciated as the Macau market partially reopened. We believe there is significant additional upside for the Macau business over the medium-to-long term.”

9. Qorvo, Inc. (NASDAQ: QRVO)

Mashaal's Stake Value: $100,904,000 Percentage of Richard Mashaal's 13F Portfolio: 3.17% Number of Hedge Fund Holders: 41

Qorvo, Inc. (NASDAQ: QRVO) develops and commercializes technologies and products for wireless and wired connectivity. It was incorporated in 1957 and stands ninth on the list of 10 best stocks to buy according to Richard Mashaal's Senvest Management. Qorvo, Inc. (NASDAQ: QRVO) shares have offered investors returns exceeding 47% over the course of the past 12 months.

On July 15, WestPark Capital analyst Ruben Roy initiated a coverage on Qorvo, Inc. (NASDAQ: QRVO) with a “Buy” rating and price target of $230. On May 6, Qorvo, Inc. (NASDAQ: QRVO) acquired NextInput, a force-sensing solutions supplier for the human-machine interface based in California. The acquisition broadens Qorvo, Inc. (NASDAQ: QRVO)'s technology portfolio and allows the company to speed up the implementation of force-sensing products based on MEMS. On May 5, Qorvo, Inc. (NASDAQ: QRVO) posted earnings for the first quarter of 2021. It reported earnings per share of $2.74, beating market predictions by $0.31. The revenue for the first three months of 2021 was $1.07 billion, up 35.8% YoY, beating the estimates by $30 million. Senvest Management holds 552,295 shares in Qorvo, Inc. (NASDAQ: QRVO), worth over $100 million. This represents 3.17% of their portfolio. The hedge fund’s stake in the company increased by 60% in the past few months, the latest data reveals.

Just like Microsoft Corporation (NASDAQ: MSFT), Pfizer Inc. (NYSE: PFE) and Applied Materials, Inc. (NASDAQ: AMAT), Qorvo, Inc. (NASDAQ: QRVO) is one of the best stocks to buy according to Richard Mashaal's Senvest Management.

8. Frontdoor, Inc. (NASDAQ: FTDR)

Mashaal's Stake Value: $102,108,000 Percentage of Richard Mashaal's 13F Portfolio: 3.21% Number of Hedge Fund Holders: 36

Frontdoor, Inc. (NASDAQ: FTDR) is an American company that provides home service plans. The company was founded in 2007 and stands eighth on the list of 10 best stocks to buy according to Richard Mashaal's Senvest Management. Frontdoor, Inc. (NASDAQ: FTDR) shares have gained about 16.54% in value over the last 12 months.

On May 6, Frontdoor, Inc. (NASDAQ: FTDR) posted earnings results for the first three months of 2021. The earnings per share was $0.10, beating market predictions by $0.02. In addition, the revenue over the period was $329 million, beating the estimates by $2.28 million. On February 19, Truist analyst Youssef Squali raised the price target on Frontdoor to $62 from $54 and kept a “Buy” rating on the shares.

Richard Mashaal's Senvest Management owns 1.90 million shares of Frontdoor, Inc. (NASDAQ: FTDR), worth $102.11 million.

Just like Microsoft Corporation (NASDAQ: MSFT), Pfizer Inc. (NYSE: PFE) and Applied Materials, Inc. (NASDAQ: AMAT), Frontdoor, Inc. (NASDAQ: FTDR) is one of the best stocks to buy according to Richard Mashaal's Senvest Management.

7. Switch, Inc. (NYSE: SWCH)

Mashaal's Stake Value: $103,701,000 Percentage of Richard Mashaal's 13F Portfolio: 3.26% Number of Hedge Fund Holders: 10

Switch, Inc. (NYSE: SWCH) is an American company, which provides colocation space and related services. The company was incorporated in 2000 and stands seventh on the list of 10 best stocks to buy according to Richard Mashaal's Senvest Management. Switch shares have returned 14.84% to investors during the course of the past 12 months.

On June 1, Switch, Inc. (NYSE: SWCH) announced that it issued senior unsecured notes due 2029, whose principal amount is $430 million. The proceeds will be used to fund the acquisition of Data Foundry. On May 10, the company posted earnings for the first quarter of 2021. It reported earnings per share of $0.08, beating market predictions by $0.02. The revenue for the first three months of 2021 was over $130.9 million, up 2.2% YoY, beating the estimates by $1.1 million. Switch, Inc. (NYSE: SWCH) also declared a quarterly dividend of $0.05 per share, in line with the previous.

The hedge fund managed by Richard Mashaal is a leading shareholder in Switch, Inc. (NYSE: SWCH) with 6.38 million shares worth more than $103 million, representing 3.26% of their portfolio.

Just like Microsoft Corporation (NASDAQ: MSFT), Pfizer Inc. (NYSE: PFE), and Applied Materials, Inc. (NASDAQ: AMAT), Switch, Inc. (NYSE: SWCH) is one of the best stocks to buy according to Richard Mashaal's Senvest Management.

6. Essent Group Ltd. (NYSE: ESNT)

Mashaal's Stake Value: $131,291,000 Percentage of Richard Mashaal's 13F Portfolio: 4.13% Number of Hedge Fund Holders: 24

Essent Group Ltd. (NYSE: ESNT) is a private mortgage insurance company. The company was founded in 2008 and ranks sixth on the list of 10 best stocks to buy according to Richard Mashaal's Senvest Management. Essent shares have offered 26.07% in returns to investors over the course of the past 3 months.

On May 10, RBC Capital analyst Mark Dwelle raised the price target on Essent Group to $58 from $50 and kept an “Outperform” rating on the shares. On May 7, Essent Group Ltd. (NYSE: ESNT) posted earnings for the first quarter of 2021. It reported earnings per share of $1.21, missing market predictions by $0.03. The revenue for the first three months of 2021 was $244.79 million, up 7% YoY, beating the estimates by $0.48 million. Essent Group Ltd. (NYSE: ESNT) also paid a quarterly dividend of $0.17 per share, which was a 6.3% increase from its prior dividend of $0.16.

Richard Mashaal's Senvest Management currently owns 2.76 million shares of Essent Group Ltd. (NYSE: ESNT) worth $131.291 million. Essent occupies 4.13% of Senvest Management’s overall portfolio.

Just like Microsoft Corporation (NASDAQ: MSFT), Pfizer Inc. (NYSE: PFE), and Applied Materials, Inc. (NASDAQ: AMAT), Essent Group Ltd. (NYSE: ESNT) is one of the best stocks to buy according to Richard Mashaal's Senvest Management.

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Disclosure: None. 10 Best Stocks to Buy According to Richard Mashaal's Senvest Management is originally published on Insider Monkey.