In this article, we will take a look at the 12 best most active stocks to buy now. If you want to see more stocks in this selection, go to the 5 Best Most Active Stocks To Buy Now.
The stock market is on course to have its weakest year since 2008 as the last week of trading comes to an end. Of the three indexes, the NASDAQ 100 has fared the worst, declining 33.8% in 2022 as shareholders withdrew from growth firms due to escalating recession fears. The founder of growth investing firm Navellier & Associates, Louis Navellier, also commented on how over low volumes, the equity market is trying its best to maintain its “head above water after a disappointing start to the official Santa Claus rally.” The billionaire investor thinks that since the hardest-hit industries are engaging in some bottom fishing, there has been some regression to the mean.
As per the National Association of Realtors, pending home sales decreased by 4.0% on a monthly basis in November. These statistics were among the economic data released on December 28. The decline occurred due to prospective buyers being concerned about high mortgage rates. A loss of 1.8% had been predicted by economists surveyed by Dow Jones. According to Brian Levitt, global market strategist at Invesco, there are unmistakable signals that the economy is faltering, as indicated by pending home sales plummeting to the second-lowest level in history. Historically, the sale of new homes has been a significant catalyst for economic activity because it supports numerous industries.
Despite the current bearish economic environment, numerous mid to large-capitalization companies recorded significant trading volumes over the last three months. Investors have had various reasons to engage in active trading of companies like Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), and Tesla, Inc. (NASDAQ:TSLA). Online trading platforms like Robinhood have also piqued the interest of investors in trading stocks as the platform offers commission-free trades. At the end of October 2022, the trading platform had 22.9 million fully funded accounts along with 12.5 million monthly active users (MAUs).
Photo by Nicholas Cappello on UnsplashOur Methodology
We first identified the 50 most actively traded mid and large-cap stocks over the last three months and then picked the top 12 of these according to Insider Monkey’s proprietary hedge fund sentiment data. The hedge fund sentiment is based on Insider Monkey’s database of 920 funds as of Q3 2022. These stocks have been ranked according to the average trading volume over the last three months.
Average 3-Month Volume: 21.29 million
Number of Hedge Fund Holders: 77
Pfizer Inc. (NYSE:PFE) is a New York-based pharmaceutical and biotech giant. The company came into the limelight after developing the COVID-19 vaccine.
Pfizer Inc. (NYSE:PFE) intends to roll out first-of-its-kind vaccines to combat respiratory syncytial virus (RSV). The company also plans to launch a flu vaccine that leverages the messenger RNA (mRNA) vaccine delivery mechanism. Furthermore, 2023 will be the first year the COVID-19 vaccine will be available widely on the commercial market. Previously, the availability of COVID-19 was covered by public institutions and inter-governmental agencies. The positive sentiment on Pfizer Inc. (NYSE:PFE) stock was reverberated by Chris Shibutani at Goldman Sachs. The analyst upgraded the stock from a Neutral to a Buy rating and also increased the target price from $47 to $60 on December 13.
Diamond Hill Capital discussed its stance on Pfizer Inc. (NYSE:PFE) in its Q3 2022 investor letter. Here’s what the firm said:
“Also among our bottom contributors were health care products manufacturer Abbott Labs, global pharmaceutical company Pfizer Inc. (NYSE:PFE), media and technology giant Alphabet, and insurance company American International Group (AIG). Although Pfizer continues to report strong performance of its core drugs, sales of its COVID vaccine and treatment have likely peaked and sales are expected to decline going forward. We remain optimistic about the company long term as we believe management is taking the company in the right direction, focusing R&D, and making strategic acquisitions with profits generated from COVID vaccine sales.”
Average 3-Month Volume: 24.37 million
Number of Hedge Fund Holders: 142
Uber Technologies, Inc. (NYSE:UBER) is a San Francisco, California-based tech company that provides ride-hailing and food delivery services.
The company has a 70% market share in the US ride-hailing industry. Despite making significant progress in achieving higher growth and profitability, Uber Technologies, Inc. (NYSE:UBER) stock is currently trading 40% below its IPO price. The company holds a total addressable market (TAM) of $13.8 trillion, with mobility and delivery businesses having a TAM of $5 trillion each, while Uber Freight has a TAM of $3.8 trillion. The rising inflation is also expected to increase the demand for ride-hailing services as it would become more challenging for people to buy cars. Meanwhile, Uber Technologies, Inc. (NYSE:UBER) is focusing on generating consistent cash flows through the introduction of subscription-based Uber One services. Despite the weakness in stock price performance, Uber Technologies, Inc. (NYSE:UBER) has experienced a stellar 26% YoY growth in gross bookings during Q3 2022.
In its Q3 2022 investor letter, RiverPark Funds shared its stance on Uber Technologies, Inc. (NYSE:UBER). Here’s what the firm said:
“Uber was our top contributor for the quarter on better-than-expected 2Q results, and 3Q EBITDA guidance that was well ahead of Street estimates. The company reported 33% Gross Bookings growth from both the continued recovery of Mobility Gross Bookings, up 55% year over year, and the continuation of Delivery Gross Bookings growth, up 7% year over year. Overall, revenue grew 105% year over year to $8 billion, generating $364 million of adjusted EBITDA, up $873 million year over year. Management guided to 25%-30% gross bookings growth and adjusted EBITDA of $440-$470 million for 3Q. Significantly, FCF was positive at $382 million, up $780 million year over year, and remains on track to be positive for the year allowing the company to self-fund future growth.
UBER remains the undisputed global leader in ride sharing, with greater than 50% share in every major region in which it operates. The company is also a leader in food delivery, where it is number one or two in the more than 25 countries in which it operates. Moreover, after a history of losses, the company is now solidly profitable with the expectation of substantial margin expansion and free cash flow generation to come. We view UBER as more than just ride sharing and food delivery, but also as a global mobility platform with the ability to sell to its more than 120 million users (by comparison, Amazon Prime has 200 million members) and penetrate new markets of on-demand services, such as grocery delivery, truck brokerage (the company had $1.8 billion in Freight revenue for 2Q22), and worker staffing for shift work. Given its $10 billion of cash and investments against $9 billion of debt, the company today has an enterprise value of $57 billion indicating that UBER trades at only 1.5x next year’s estimated revenue.”
Average 3-Month Volume: 25.96 million
Number of Hedge Fund Holders: 105
Alibaba Group Holding Limited (NYSE:BABA) is an Hangzhou, China-based diversified technology company founded in 1999 with a significant presence in the fields of cloud computing services, e-commerce, and social media.
On November 18, Alibaba Group Holding Limited (NYSE:BABA) stock was assigned a target price of $180 along with a Buy rating by Fawne Jiang at Benchmark following the Q2 FY23 results. The reopening of the Chinese economy and the ease of COVID-19-related restrictions in China will play favorably for the company. The Chinese National Health Commission (NHC) has announced that travelers would not be required to undergo quarantine from January 8. The Chinese New Year festivities are expected to start on January 22. Based on these developments, the analyst anticipates Alibaba Group Holding Limited (NYSE:BABA) to experience a growth in customer management revenue (CMR) as the reopening of the Chinese economy boosts demand.
Here’s what Polen Capital said about Alibaba Group Holding Limited (NYSE:BABA) in its Q3 2022 investor letter:
“Alibaba Group Holding Limited (NYSE:BABA) is the leading e-commerce company in China. The stock was weak over the quarter as they reported a quarterly revenue decline. The company has been heavily impacted by the continued covid-19 lockdowns throughout China and the aggressive rate increases and deteriorating outlook for China’s economy have weighed heavily on the stock. The share price has also been under pressure due to the U.S. Securities and Exchange Commission’s plans to delist Chinese tech stocks in 2024 if they do not provide access to audit files.”
Average 3-Month Volume: 30.55 million
Number of Hedge Fund Holders: 269
Microsoft Corporation (NASDAQ:MSFT) is a Seattle, Washington-based diversified technology company with exposure to consumer electronics, cloud computing services, computer hardware, and software.
On December 24, Keith Weiss at Morgan Stanley shortlisted the company as a top pick in the field of software. Microsoft Corporation (NASDAQ:MSFT) is set to experience growth in the cloud, data management, and security sectors. The company has also emerged as a top candidate for acquiring the California-based open-source tool provider for cloud-computing infrastructure, HashiCorp, Inc. (NASDAQ:HCP). Furthermore, Microsoft Corporation (NASDAQ:MSFT) is also working on closing the $69 billion Activision Blizzard acquisition deal that was announced in January 2022. This will provide a significant tailwind to the company’s gaming business.
Here’s what TimesSquare Capital Management said about Microsoft Corporation (NASDAQ:MSFT) in its Q3 2022 investor letter:
“Microsoft Corporation (NASDAQ:MSFT) develops, licenses, and supports software solutions worldwide. Fiscal fourth quarter results were generally in line with consensus estimates, though profits missed slightly. While its Azure cloud business continues to perform well, the personal computer market has declined with inflation having an impact. Its shares experienced a -9% selloff.”
Average 3-Month Volume: 32.43 million
Number of Hedge Fund Holders: 196
Alphabet Inc. (NASDAQ:GOOGL) is a Mountain View, California-based holding company that owns Google, YouTube, and numerous other subsidiaries.
Mark Mahaney at Evercore ISI assigned Alphabet Inc. (NASDAQ:GOOGL) stock a target price of $120 along with an Outperform rating, implying a potential upside of over 37% from the closing price as of December 27. The analyst sees Alphabet Inc. (NASDAQ:GOOGL) stock as an attractive play for long-term investors. Alphabet Inc. (NASDAQ:GOOGL) is said to have paid $2.5 billion to get the rights to the Sunday Ticket subscription service for YouTube. This development is expected to result in an expansion in the paid subscriber base of YouTube TV.
Here’s what Mayar Capital said about Alphabet Inc. (NASDAQ:GOOGL) in its Q3 2022 investor letter:
“In early January this year – which admittedly feels like eons ago – US President Joe Biden was pushing Americans to take up the government’s offer of free COVID tests to help tackle the surging omicron variant. How did Biden respond when citizens asked about the availability of these tests?
This advice, undoubtedly well-meant, was roundly scoffed at by the press, however. It seemed too obvious to be very helpful.
Anyway, the anecdote serves to introduce you to one of our largest holdings, Alphabet; the parent company of Google. Note that first, Alphabet’s original and core product – its search engine – has entered our common vocabulary as a verb. ‘Googling’ something has the same meaning as ‘researching’ or ‘finding an answer to’ something. Second the reason Biden’s advice was met with such opprobrium was because Googling something has become almost second nature to us now.
These two observations reveal a lot about Google’s strength in the search engine market, in which it has a share of over 90 percent. Because internet search is almost the prototypical network, Google has benefitted from – and we think is also protected by – the huge competitive advantage its scale brings – both to those asking the questions and those providing the answers. The Google search platform becomes increasingly useful to anyone seeking information as a greater volume of stuff becomes available. This starts a virtuous cycle that results in a colossal market share for Google itself. In the language of business strategists, Google benefits from vast network effects.
Because Google’s search results are viewed by billions of eyeballs every day, its search page ‘real estate’ is understandably very valuable to those with goods and services to sell. Advertising revenues from this ‘real estate’ as well as that from its other properties such as Mail, Maps, and so on, totaled almost USD 150b in 2021; amounting to almost 58% of the company’s revenues. Ad sales on YouTube, also owned by Alphabet, brought in another USD 28b. With the secular shift of the advertising spend to digital channels – over which Alphabet has a tight grip – we estimate the company has a share of around 40% of the digital advertising market and is probably the most valuable advertising property in the world…” (Click here to see the full text)
Average 3-Month Volume: 41.72 million
Number of Hedge Fund Holders: 97
Bank of America Corporation (NYSE:BAC) is a Charlotte, North Carolina-based provider of asset management, banking, investing, and other diversified financial services.
The increase in benchmark interest rates by the Federal Reserve will play out favorably for Bank of America Corporation (NYSE:BAC) as the banking giant would be able to charge a higher markup on its loans. The US Federal Reserve anticipates a soft landing of the economy as it projects a GDP growth of 0.5% in 2023. Furthermore, the Federal Reserve anticipates the interest rate to peak at around 5.1% as opposed to the current range of 4.25% to 4.50%. In case of a recession, experts think the banking system is more prepared to counter the impact as compared to the Financial Crisis of 2008, as the loan-to-deposit rate sits at 70% as opposed to 100% previously.
Ariel Investments shared its outlook on Bank of America Corporation (NYSE:BAC) in its Q3 2022 investor letter. Here’s what the firm said:
“We initiated three new positions in the quarter. We added leading financial institution Bank of America Corporation (NYSE:BAC) which serves individual consumers, small and middle-market businesses, and large corporations with a full range of banking, investing, asset management, and other financial and risk management products and services. The current company was formed through various mergers including NationsBank, FleetBoston, US Trust, Countrywide Financial, and Merrill Lynch with the legacy commercial bank to form a national banking powerhouse and bulge bracket investment firm. As one of the ‘Big Four’ U.S. banks it enjoys scale driven cost advantages and economies of scale which provide meaningful competitive advantages and potential for strong returns in the largely commoditized banking industry. A survivor of the financial crisis, BAC has emerged with a solid capital base and stands to benefit from a rising interest rate environment.”
Average 3-Month Volume: 45.91 million
Number of Hedge Fund Holders: 177
Meta Platforms, Inc. (NASDAQ:META) is a Menlo Park, California-based diversified technology company with a foothold in the instant messaging (IM) and social media industry.
As of December 2022, Meta Platforms, Inc. (NASDAQ:META) has laid off 13,000 employees to streamline its operations. This development is expected to result in an annual saving of around $1.3 billion. Meta Platforms, Inc. (NASDAQ:META) is also aggressively rolling out its Reel feature to combat the rise of TikTok. The company claims that 140 billion reels are played on Facebook and Instagram daily, and the development of appropriate tools to monetize this content would help Meta Platforms, Inc. (NASDAQ:META) expand its margins. The company is also considering the opportunity to monetize its messaging platform, which is currently contributing $9 billion to the top line annually, equivalent to $5 per user.
Here’s what ClearBridge Investments said about Meta Platforms, Inc. (NASDAQ:META) in its Q3 2022 investor letter:
“We initiated a new position in Meta Platforms, Inc. (NASDAQ:META), in the communication services sector, which operates the Facebook and Instagram social media platforms and is a leading digital advertising provider. We have been carefully watching the company over the last few quarters and believe headwinds from lower monetizing in Facebook and Instagram Reels and pressures from consumer privacy measures are poised to lessen. We believe the company has begun to fully acclimate to this new environment, will achieve greater effectiveness in Reels monetization and find ways to adapt to new privacy standards which will rebound advertising efficiency. Combined with a greater focus on cost control, we believe these initiatives will help contribute to further margin expansion and leave the company well-positioned moving forward.”
In addition to Meta Platforms, Inc. (NASDAQ:META), Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), and Tesla, Inc. (NASDAQ:TSLA) are also some of the best most active stocks to buy now.
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Disclosure: None. 12 Best Most Active Stocks To Buy Now is originally published on Insider Monkey.