In this article we discuss the 10 best spring stocks to buy now. If you want to skip our detailed analysis of these companies, go directly to the 5 Best Spring Stocks to Buy Now.
Market experts had expected the spring of 2021 to be a welcome one for the economy with the COVID-19 vaccine rollout allowing for a return to normal after a torrid 2020 that saw many stocks take a battering as virus lockdowns brought business activities across the world to a screeching halt. However, supply chain disruptions caused by the year-long business hiatus and social media speculation leading to meme stock rallies have instead raised inflation and volatility concerns, leaving the market in a delicately poised position.
Through the pandemic, technology growth stocks like Amazon.com, Inc. (NASDAQ: AMZN), the Washington-based ecommerce retailer, had smashed analyst predictions, registering record growth numbers on the back of increased interest in internet-based services. Amazon.com, Inc. (NASDAQ: AMZN) carried this momentum into the new year, with media reports suggesting that the company was preparing for blockbuster acquisitions in the food delivery and medical diagnostics segments to boost the core retail business.
The start of spring also provided a boost to The Walt Disney Company (NYSE: DIS), the California-based entertainment firm that is famous for its theme parks. The Walt Disney Company (NYSE: DIS) announced limited reopening of parks through the spring months and has recently said that it expects these parks to be running at full capacity in several states across the United States by the end of the year. On May 26, The Walt Disney Company (NYSE: DIS) stock was named among the highest conviction picks of investment advisory UBS.
Another stock that stands to benefit from the easing of virus restrictions is Delta Air Lines, Inc. (NYSE: DAL), the Georgia-based airline carrier. Delta Air Lines, Inc. (NYSE: DAL) is among the many airline stocks that have gained rapidly in recent weeks as international travel resumes and vacation hotspots report record increase in numbers driven by a vacation craze following months of restrictions that largely restricted people to their homes. On June 3, Delta Air Lines, Inc. (NYSE: DAL) boosted revenue guidance numbers for the second fiscal quarter.
Spring is usually a season for growth and that makes it a good metaphor for investments in stocks that have the potential to grow in the coming weeks and months. Short-term selling pressures that are now dictating market dynamics could prove to be an opportune time to take advantage of the spring season and stock up on options that are selling at reasonable prices. The risks that investors take in the spring might determine their overall annual returns, as smart investors place their bets early and wait for them to mature for the rest of the year.
The stock volatility that has dominated the headlines this year has upped the stakes in the finance world that is reeling from other pressure such as tech-led disruption. 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.
With this context in mind, here is our list of the 10 best spring stocks to buy now.
Best Spring Stocks To Buy Now
10. Ingles Markets, Incorporated (NASDAQ: IMKTA)
Number of Hedge Fund Holders: 16
Ingles Markets, Incorporated (NASDAQ: IMKTA) is a North Carolina-based company that owns a supermarket chain. It was founded in 1963 and is ranked tenth on our list of 10 best spring stocks to buy now. The company owns and runs close to 200 supermarkets, primarily in the southern part of the United States. The stock has returned more than 52% to investors over the course of the past twelve months. Some of the products sold by the supermarket chain include grocery, meat and dairy products, produce, as well as health and beauty care products.
Ingles Markets, Incorporated (NASDAQ: IMKTA) is well-positioned to improve revenue numbers as the economy reopens following the pandemic. In early May, the firm posted earnings for the second fiscal quarter, reporting more than $1.1 billion in revenue, up 2.6% year-on-year.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm GAMCO Investors is a leading shareholder in Ingles Markets, Incorporated (NASDAQ: IMKTA) with 851,802 shares worth more than $52 million.
Just like Amazon.com, Inc. (NASDAQ: AMZN), The Walt Disney Company (NYSE: DIS), and Delta Air Lines, Inc. (NYSE: DAL), Ingles Markets, Incorporated (NASDAQ: IMKTA) is one of the best spring stocks to buy now.
9. Baidu, Inc. (NASDAQ: BIDU)
Number of Hedge Fund Holders: 89
Baidu, Inc. (NASDAQ: BIDU) is a China-based technology firm involved in the internet services and artificial intelligence businesses. It was founded in 2000 and is placed ninth on our list of 10 best spring stocks to buy now. The company’s shares have offered investors returns exceeding 68% in the past twelve months. As a government crackdown on dual-listed Chinese firms winds down, Baidu is poised to make a strong comeback. The company is also investing heavily in online entertainment services, a fast-growing segment of the internet market.
On May 18, Baidu, Inc. (NASDAQ: BIDU) shares jumped more than 3.5% in premarket trading as the company reported earrings for the first quarter of 2021, posting a revenue of RMB28.14 billion, up 25% year-on-year, driven by non-marketing sales gains.
At the end of the first quarter of 2021, 89 hedge funds in the database of Insider Monkey held stakes worth $6.5 billion in Baidu, Inc. (NASDAQ: BIDU), up from 51 in the preceding quarter worth $4.6 billion.
“We have also fully exited our stake in Baidu, following their outstanding performance during the period and their lower relative upside potential compared to other investment alternatives, which we will discuss below.
The Chinese technology platform company Baidu has also been held in the portfolios managed by Alejandro, Miguel and myself for several years. During this period, we have seen very high volatility in its share price, which we have taken advantage of to make significant rebalancing moves in our position (in fact, we even sold our entire position once, when we thought the stock’s upside potential was exhausted). After several years of instability, market sentiment turned very positive, putting an end to the historical advertising problems in the healthcare sector, the divestments in O2O (Online-to-Offline) businesses that continued to weigh on the company’s margins, the IPO of part of the iQiyi streaming business (which hid Baidu’s underlying cash generation capacity) and the tough competition from other industry giants such as Tencent and Alibaba, as well as the entry of new players with disruptive business models (ByteDance). At the same time, the company’s recent commitment to electric vehicles contributed even more to this change of narrative. Baidu’s share price rose almost fourfold from the March 2020 lows to all-time highs and reached a valuation where the margin of safety, in our view, was too narrow.”
8. BlackBerry Limited (NYSE: BB)
Number of Hedge Fund Holders: 24
BlackBerry Limited (NYSE: BB) is a Canada-based company that markets enterprise software and internet of things products. It was founded in 1984 and is ranked eighth on our list of 10 best spring stocks to buy now. The company’s shares have offered investors returns exceeding 153% over the past year. The company has introduced new endpoint security products in the past few weeks, improving on year-to-date stock gains that now stand at over 109%. The company is a favorite among retail investors, who have been heavily influencing the market.
On June 1, BlackBerry Limited (NYSE: BB) shares surged more than 5.7% on its fourth straight day of a growth streak on the back of increased social media chatter around the company on the popular Reddit platform WallStreetBets.
Out of the hedge funds being tracked by Insider Monkey, Canada-based investment firm Fairfax Financial Holdings is a leading shareholder in BlackBerry Limited (NYSE: BB) with 46.7 million shares worth more than $392 million.
Just like Amazon.com, Inc. (NASDAQ: AMZN), The Walt Disney Company (NYSE: DIS), and Delta Air Lines, Inc. (NYSE: DAL), BlackBerry Limited (NYSE: BB) is one of the best spring stocks to buy now.
7. AMC Entertainment Holdings, Inc. (NYSE: AMC)
Number of hedge fund holders: 19
AMC Entertainment Holdings, Inc. (NYSE: AMC) is a Leawood-based company that owns and runs a popular movie theatre chain. It was founded in 1920 and is placed seventh on our list of 10 best spring stocks to buy now. The company’s shares have returned more than 710% to investors in the past twelve months. The movie theatre chain operates more than 1,000 movie theatres and 10,700 screens globally. AMC Entertainment is also a popular stock on the Reddit forum WallStreetBets, driving more than 2150% gains in price year-to-date.
On June 2, AMC Entertainment Holdings, Inc. (NYSE: AMC) stock was halted for volatility after a record 92% surge in over and above earlier gains. The volume of trading was also up from the 112 million per day average to over 410 million shares per day.
At the end of the first quarter of 2021, 19 hedge funds in the database of Insider Monkey held stakes worth $34 million in AMC Entertainment Holdings, Inc. (NYSE: AMC), up from 16 in the preceding quarter worth $24 million.
Just like Amazon.com, Inc. (NASDAQ: AMZN), The Walt Disney Company (NYSE: DIS), and Delta Air Lines, Inc. (NYSE: DAL), AMC Entertainment Holdings, Inc. (NYSE: AMC) is one of the best spring stocks to buy now.
In its Q4 2020 investor letter, Mittleman Investment Management LLC, an asset management firm, highlighted a few stocks and AMC Entertainment Holdings, Inc. (NYSE: AMC) was one of them. Here is what the fund said:
“AMC Entertainment (AMC) was our only material loser in Q4, dropping from $4.71 to $2.12 (-55%). I planned on discussing here why it was worth at least the $10 per share that my recently reduced estimate of fair value claimed, but since then AMC raised more cash against their UK holdings and then the stock took off due to speculative players from reddit.com getting involved, so we sold it all around $14 during the last week of Jan. 2021. This was a modest profit for most clients, but a loss for some others, depending on when the account began, so check your statements to see where you came out. And yes, I recognize it as being a dose of good luck, which I heartily accept from the universe as it seemed somewhat lacking in the portfolio of late. After the sale of AMC in late January 2021, our exposure to the movie theater business is now exclusively in Canada via Cineplex, which has a 75% market share and much less leverage on its balance sheet.”
6. Live Nation Entertainment, Inc. (NYSE: LYV)
Number of Hedge Fund Holders: 37
Live Nation Entertainment, Inc. (NYSE: LYV) is a Beverly Hills-based live entertainment firm. It was founded in 2005 and is ranked sixth on our list of 10 best spring stocks to buy now. The company’s shares have offered investors returns exceeding 56% in the past year. The firm is one of the top ones that will benefit from the reopening of the economy that allows for public gatherings, including live functions such as concerts, as it manages live event ticket sales. The company runs more than 200 entertainment-focused arenas across the world.
On May 14, investment advisory Wolfe Research initiated coverage on Live Nation Entertainment, Inc. (NYSE: LYV) stock with an Outperform rating and a year-end price target of $97, implying an upside potential of 13%.
Out of the hedge funds being tracked by Insider Monkey, Virginia-based firm Akre Capital Management is a leading shareholder in Live Nation Entertainment, Inc. (NYSE: LYV) with 5.4 million shares worth more than $462 million.
Just like Amazon.com, Inc. (NASDAQ: AMZN), The Walt Disney Company (NYSE: DIS), and Delta Air Lines, Inc. (NYSE: DAL), Live Nation Entertainment, Inc. (NYSE: LYV) is one of the best spring stocks to buy now.
“In 2006, we initiated our position in Live Nation, the global entertainment company that handles promotion, venue management and ticket sales for live events. Live Nation was spun out of the former Clear Channel Communications in late 2005. In our view, spinoffs often represent attractive opportunities because investors frequently undervalue the new company. We believed this was the case with Live Nation, especially given its initially small market capitalization. As well, when spinoffs are freed from their parents, they typically benefit from intensified management focus and more flexible capital allocation policies. In Live Nation’s case, the spinoff helped make possible the merger with Ticketmaster in 2010, which materially improved the business franchise. Although these factors alone might have made Live Nation a good holding for the Fund, an unexpected technology helped to boost the company’s fortunes: streaming. As the advantages of streaming convinced consumers to reduce or even eliminate their purchases of media, such as CDs and DVDs, artists began to tour more, thereby providing a tailwind to Live Nation’s operations. This accelerated growth in the company’s intrinsic value per share, which in turn generated numerous increases in our sell target for the holding, enabling us to continue to own the shares in the Fund for 14 years. We typically target a three- to five-year holding period for our equity investments, but we love opportunities like Live Nation, which achieve unanticipated intrinsic value growth.”
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Disclosure: None. 10 Best Spring Stocks to Buy Now is originally published on Insider Monkey.