In This Article:
In this article, we will look at the 14 best falling stocks to buy now. If you want to explore similar stocks, you can also take a look at 5 Best Falling Stocks To Buy Now.
The next FOMC meeting is just around the corner. With the jobs report and the much awaited CPI report, we now have enough data to chew on as the FOMC meeting draws closer. In February, non-farm payrolls increased by 311,000 and the unemployment rate went up to 3.6%. Inflation seems to have cooled down, with the consumer price index for February rising 0.4% on a seasonally adjusted basis and 6% year-over-year, in-line with expectations. Economists and analysts argued that the implosion of SVB was enough to point the Fed in the direction of raising interest rates by 25 basis points at the March meeting. However according to CME's FedWatch Tool, 73.1% of the market seems to have priced in a Fed funds rate in the range 475 and 500 basis points, or a quarter point hike. 23.9% of the market expects the Fed to not issue a rate hike at all, and nobody expects a 50 basis point rate hike. While the CPI data for February shows signs of inflation cooling off, it is still running at 3 times the target rate of the Fed.
William Blair's Macro Analyst: "Inflation As A Whole Is Still Too High For The Fed's Liking"
On March 14 Richard de Chazal, macro analyst at William Blair, appeared in an interview on Yahoo Finance to discuss his outlook for the markets and the Fed. Chazal noted that the CPI report for February was encouraging. Though inflation seems to have cooled off it is still higher than 2%, where the Fed wants it to be, said the analyst. Chazal further spoke about the how the market havoc caused by the implosion of SVB has started to settle down. The market was pricing in a 50 basis point rate hike before the collapse of SVB and after the remarks of Fed chair Powell at Capitol Hill. However, in light of the current circumstances, Chazal thinks the Fed will go with a quarter point hike and not with a half point hike at the March meeting.
Richard de Chazal also noted that even if the SVB crisis had not happened, he expected the Fed to go with a 25 basis point hike. However, with an in-line CPI report and the ramifications of SVB, the analyst is now more confident about the Fed going with a quarter point rate hike.
Richard de Chazal said that "economic growth is slowly being suffocated" and that is reflected in a variety of economic indicators including the yield curve, building permits, the money supply, and industrial production. Here are some comments from Richard de Chazal:
"I think we are going to be in a tighter financial market environment for some time to come. With inflation still at 6%, even if the Fed slows the pace of those rate increases, it's certainly telling us it wants to see policy remain tight for a while. We'll have to see if anything else appears on the horizon in the financial market environment in the banking system. It seems like that's off the table for the moment, but I think we are looking at a more difficult economic environment over the coming several quarters."
In the aftermath of SVB, Richard de Chazal thinks that the Fed has addressed the SVB situation with the required urgency and noted that "the banking system as a whole is still very sound".
On March 14, the S&P 500 gained 1.68%, the Nasdaq Composite bounced 2.14%, and the Dow rallied 1.06%. While the markets reacted positively to the CPI report, stocks may have further downside as inflation remains sticky and the Fed remains hawkish. In such an environment, it can be helpful to look where smart money is allocating capital and what stocks do experts like, as there may be potential buying opportunities in these falling stocks. On a side note, these stocks may not be the best investments for everyone, as hedge funds and analysts may have different priorities, risk tolerance, and time horizon than the average retail investor. So, with any investment, it is important to do your own homework and evaluate your risk tolerance and goals before allocating capital.
Some of the best falling stocks to buy now according to analysts and hedge funds include Fidelity National Information Services, Inc. (NYSE:FIS), Datadog, Inc. (NASDAQ:DDOG), and Tesla, Inc. (NASDAQ:TSLA). Let's now discuss these stocks, among others, in detail.
Source:Pixabay
Our Methodology
To determine the best falling stocks to buy now, we screened for companies that have declined by more than 30% over the past 6 months, as of March 14. We sorted our screen by market cap and went through the 50 largest companies that fit our criteria. We then used Insider Monkey's proprietary database to source the hedge fund sentiment for each stock and narrowed down our selection to stocks that were the most widely held by hedge funds, as of Q4 2022. We have ranked these stocks in ascending order of the number of hedge funds that have positions in them. Where the number of hedge funds was the same, we used the percentage decline as the tie-breaker.
14 Best Falling Stocks To Buy Now
14. Baxter International Inc. (NYSE:BAX)
6-month Decline as of March 14: 33.24%
Number of Hedge Fund Holders: 41
At the end of Q4 2022, Baxter International Inc. (NYSE:BAX) was a part of 41 hedge funds' portfolios that held collective stakes worth $1.88 billion in the company. Of those, Generation Investment Management was the largest shareholder in the company and held a stake worth $553.8 million.
On February 9, Baxter International Inc. (NYSE:BAX) reported earnings for the fiscal fourth quarter of 2022. The company reported an EPS of $0.88 and generated a revenue of $3.89 billion, up 10.61% year over year and ahead of Wall Street consensus by $120.60 million. As of March 14, Baxter International Inc. (NYSE:BAX) has fallen by 33.24% over the past 6 months.
On February 13, Barclays analyst Matt Miksic revised his price target on Baxter International Inc. (NYSE:BAX) to $54 from $63 and maintained an Overweight rating on the shares. Baxter International Inc. (NYSE:BAX) is one of the best falling stocks to buy now according to hedge funds and analysts.
Other stocks that have fallen significantly over the past 2 quarters but are still on the radars of investors and analysts include Fidelity National Information Services, Inc. (NYSE:FIS), Datadog, Inc. (NASDAQ:DDOG), and Tesla, Inc. (NASDAQ:TSLA).
13. Dominion Energy Inc. (NYSE:D)
6-month Decline as of March 14: 32.39%
Number of Hedge Fund Holders: 41
On February 8, Dominion Energy Inc. (NYSE:D) declared a quarterly cash dividend of $0.6675 per common share. The divided is payable on March 20 to stockholders of record on March 3. As of March 14, Dominion Energy Inc. (NYSE:D) has declined by 32.39% over the past 6 months and is offering a forward dividend yield of 4.93%. The stock is placed thirteenth among the best falling stocks to buy now according to hedge funds.
This February, BMO Capital analyst James Thalacker revised his price target on Dominion Energy Inc. (NYSE:D) to $61 from $66 and reiterated an Outperform rating on the shares.
41 hedge funds were bullish on Dominion Energy Inc. (NYSE:D) at the close of Q4 2022. These funds disclosed positions worth $1.14 billion in the company. This is compared to 29 positions in the previous quarter with stakes worth $415.1 million.
As of December 31, Steve Cohen's Point72 Asset Management is the top shareholder in Dominion Energy Inc. (NYSE:D) and has a position worth $233.5 million in the company.
Here is what Diamond Hill Capital had to say about Dominion Energy, Inc. (NYSE:D) in its Q4 2022 investor letter:
“Other bottom contributors included media and technology giant Alphabet, apparel and footwear company V.F. Corporation and utility operator Dominion Energy, Inc. (NYSE:D). Dominion Energy’s stock price weakness was due in part to regulatory concerns surrounding its triennial rate review process and its offshore wind program. Additionally, management highlighted cost pressures, which could hamper growth rates. We believe these headwinds are short-term in nature and continue to hold our position.”
12. Zscaler, Inc. (NASDAQ:ZS)
6-month Decline as of March 14: 38.65%
Number of Hedge Fund Holders: 42
Zscaler, Inc. (NASDAQ:ZS) was held by 42 hedge funds at the end of Q4 2022. These funds held stakes worth $540.3 million in the company. Of those, Two Sigma Advisors was the leading investor in the company and disclosed a stake worth $80.9 million.
Zscaler, Inc. (NASDAQ:ZS) has crashed by 38.65% over the past 6 months, however, Wall Street analysts are positive on the stock. On March 3, Canaccord analyst T. Michael Walkley updated his price target on Zscaler, Inc. (NASDAQ:ZS) to $155 from $165 and maintained a Buy rating on the shares. The stock is one of the best falling stocks to buy now according to analysts and hedge funds.
Here is what Artisan Partners had to say about Zscaler, Inc. (NASDAQ:ZS) in its Q4 2022 investor letter:
“Zscaler, Inc. (NASDAQ:ZS) provides cloud-based Internet security solutions. In the quarter, it announced 54% revenue growth and expected growth of nearly 40% in 2023 (ahead of expectations). Despite solid fundamental momentum, shares have underperformed this year as investors have grown concerned about slowing demand for enterprise software as the broader global economy slows. We believe the dual trends of rising security vulnerability and increased enterprise digitization will lead to sustained demand, even in a recession. Cybersecurity remains a top concern for businesses and governments alike as cyberattacks can have devastating financial and reputational consequences. Meanwhile, managing the security needs of legacy on-premise applications, a growing number of cloud-based applications (Office 365, Salesforce, etc.) and a more remote workforce (versus pre-pandemic) make operating IT infrastructures increasingly complex. Give the attractive long-term outlook and depressed valuations, we added to the position.”
11. M&T Bank Corporation (NYSE:MTB)
6-month Decline as of March 14: 31.67%
Number of Hedge Fund Holders: 42
On January 3, Wedbush analyst David Chiaverini upgraded M&T Bank Corporation (NYSE:MTB) to Outperform from Neutral and reiterated a $170 price target. Though the stock has declined by 31.67% over the past 6 months, as of March 14, it is one of the best falling stocks to buy now according to hedge funds and analysts.
On February 22, M&T Bank Corporation (NYSE:MTB) raised its quarterly cash dividend to $1.30 per common share, up 8.3% from the company's prior dividend of $1.20 per common share. The dividend is payable on March 31 to investors of record on March 6. As of March 14, M&T Bank Corporation (NYSE:MTB) is offering a forward dividend yield of 3.89%.
At the end of the fourth quarter of 2022, M&T Bank Corporation (NYSE:MTB) was a part of 42 investors' portfolios that disclosed collective positions worth $846.7 million in the company. As of December 31, Ken Griffin's Citadel Investment Group is the top stockholder in the company and has a stake worth $298.4 million.
10. Truist Financial Corporation (NYSE:TFC)
6-month Decline as of March 14: 33.75%
Number of Hedge Fund Holders: 44
On January 19, Truist Financial Corporation (NYSE:TFC) reported earnings for the fourth quarter of fiscal 2022. The company reported an EPS of $1.30 and outperformed EPS estimates by $0.02. The company generated a revenue of $6.26 billion, up 11.75% year over year and ahead of market expectations by $110.15 million. As of March 14, the stock has lost 33.75% over the past 6 months.
This March, Keefe Bruyette upgraded Truist Financial Corporation (NYSE:TFC) to Market Perform from Underperform and revised its price target on the shares to $45 from $47. The stock is placed tenth on our list of the best falling stocks to buy now.
At the end of Q4 2022, 44 hedge funds held stakes in Truist Financial Corporation (NYSE:TFC). The total value of these stakes amounted to $823.5 million, up from $570.2 million in the previous quarter with 39 positions. The hedge fund sentiment for the stock is positive.
As of December 31, Diamond Hill Capital is the most prominent investor in Truist Financial Corporation (NYSE:TFC) and has disclosed a position worth $562.8 million.
Here is what ClearBridge Investments had to say about Truist Financial Corporation (NYSE:TFC) in its Q4 2022 investor letter:
“We remained active in culling the portfolio of stocks we see as no longer well positioned for the more restrictive macro environment, eliminating seven common stock positions. The biggest sale was Truist Financial Corporation (NYSE:TFC), a regional bank formed by the merger of SunTrust and BB&T that we purchased during the height of COVID-19. At the time, this evolving opportunity growth company was not being recognized for its strong footprint in the Southeast. But the bank’s underinvestment in technology and exposure to auto lending could become greater risks in a downturn, leading us to exit the stock.”
9. Atlassian Corporation Plc (NASDAQ:TEAM)
6-month Decline as of March 14: 36.74%
Number of Hedge Fund Holders: 50
Though Atlassian Corporation Plc (NASDAQ:TEAM) has lost 36.74% over the past 6 months, it is one of the best falling stocks to buy now. On February 3, Canaccord analyst David Hynes raised his price target on Atlassian Corporation Plc (NASDAQ:TEAM) to $175 from $150 and maintained a Buy rating on the shares.
Atlassian Corporation Plc (NASDAQ:TEAM) posted strong earnings for the fiscal second quarter of 2023 on February 2. The company reported an EPS of $0.45 and outperformed EPS estimates by $0.16. The company reported a revenue of $872.70 million, up 26.75% year over year and ahead of market consensus by $23.25 million.
Atlassian Corporation Plc (NASDAQ:TEAM) was a part of 50 investors' portfolios at the close of Q4 2022. These funds held collective stakes worth $1.41 billion in the company.
Here is what Artisan Partners had to say about Atlassian Corporation (NASDAQ:TEAM) in its Q4 2022 investor letter:
“Among our bottom contributors were Atlassian Corporation (NASDAQ:TEAM), SVB Financial Group and Catalent. The tougher macro environment caught up with Atlassian in the quarter as the company is seeing slower software user additions as customers of all sizes moderate hiring and spending. However, the company still expects to grow sales at a mid-20s rate in Q4 and grow its strategically important cloud revenues 40%–45%. These are slower rates than we expected, and could slow further, but Atlassian’s growth metrics remain solid in light of the environment. In the short term, slower revenue growth will likely pressure margins and profitability given the company’s rapid hiring expansion in recent periods. But we detect a meaningful shift in tone from management on expense growth and margins now that top-line growth is slowing. While we fully expect Atlassian to keep investing in its large growth opportunities, we think a prudent reprioritization of this spending will lead to margin tailwinds in the medium term. We are sensitive to the slowing near-term growth dynamics but believe remaining invested is appropriate given the longer term profit growth potential.”
8. Antero Resources Corp (NYSE:AR)
6-month Decline as of March 14: 41.80%
Number of Hedge Fund Holders: 53
Antero Resources Corp (NYSE:AR) was held by 53 hedge funds at the end of Q4 2022. These funds held collective positions worth $874.4 million in the company. As of March 14, the stock has tanked by 41.80% over the past 6 months and is placed eighth on our list of the best falling stocks to buy now according to hedge funds.
On March 10, Mizuho analyst Nitin Kumar updated his price target on Antero Resources Corp (NYSE:AR) to $38 from $51 and maintained a Buy rating on the shares.
As of December 31, quant hedge fund D E Shaw is the top investor in Antero Resources Corp (NYSE:AR) and has disclosed a position worth $99.93 million in the company.
Here is what TimesSquare Capital Management had to say about Antero Resources Corporation (NYSE:AR) in its Q3 2022 investor letter:
“New to the portfolio this quarter is Antero Resources Corporation (NYSE:AR), a natural gas focused exploration and production company with operations in Pennsylvania and Ohio. The continued buildout of U.S. liquefied natural gas stems from utility plants switching from coal to natural gas and European demand.”
7. Match Group, Inc. (NASDAQ:MTCH)
6-month Decline as of March 14: 36.50%
Number of Hedge Fund Holders: 54
On January 31, Match Group, Inc. (NASDAQ:MTCH) released earnings for the fourth quarter of fiscal 2022. The company generated a revenue of $786.15 million and reported an EPS of $0.87, outperforming EPS estimates by $0.26. As of March 14, the stock has fallen by 36.50% over the past 6 months.
This February, Deutsche Bank analyst Benjamin Black revised his price target on Match Group, Inc. (NASDAQ:MTCH) to $60 from $65 and maintained a Buy rating on the shares. Match Group, Inc. (NASDAQ:MTCH) is one of the best falling stocks to buy now according to analysts.
At the end of the fourth quarter of 2022, 54 hedge funds were long Match Group, Inc. (NASDAQ:MTCH) and disclosed stakes worth $730.3 million in the company. This is compared to 54 positions in the preceding quarter with stakes worth $621.1 million.
Here is what RGA Investment Advisors had to say about Match Group, Inc. (NASDAQ:MTCH) in its Q4 2022 investor letter:
“Match Group, Inc. (NASDAQ:MTCH), a long-term holding of ours offers an important illustrative example of these effects. Tinder grew reported revenues 6% year-over-year, accelerating a debate about whether this particular asset has reached a plateau in its growth curve; however, revenues grew 16% on an FX neutral basis. Has this asset stalled or is it a mid-teens grower? Other factors will determine the one true answer to this question, though FX and the stated headline make the answer seem obvious when it is not. When foreign exchange movements are modest, people tend to focus more on FX neutral assuming those changes will normalize over time, yet when movements are extreme the headline takes prominence.”
6. EQT Corporation (NYSE:EQT)
6-month Decline as of March 14: 36.18%
Number of Hedge Fund Holders: 56
On March 10, Mizuho analyst Nitin Kumar updated his price target on EQT Corporation (NYSE:EQT) to $48 from $62 and maintained a Buy rating on the shares. As of March 14, the stock has lost 36.18% over the past 6 months and is trading at a PE multiple of 7x. EQT Corporation (NYSE:EQT) is placed sixth among the best falling stocks to buy now.
At the close of the fourth quarter of 2022, 56 hedge funds were long EQT Corporation (NYSE:EQT) and disclosed positions worth $1.22 billion in the company. Of those, Soroban Capital Partners was the top shareholder and held a stake worth $218.8 million in the company.
Here is what ClearBridge Investments had to say about EQT Corporation (NYSE:EQT) in its Q3 2022 investor letter:
“We also added natural gas company EQT (NYSE:EQT) in the energy sector. As one of the lowest-cost domestic producers, EQT stands to benefit from its position as a leading supplier of natural gas to a world suffering from critically low energy reserves. The Russian invasion of Ukraine and threats to hold natural gas exports hostage have spurred a surge in European energy prices, generating long-term agreements by European countries to purchase U.S. natural gas.
In addition to EQT Corporation (NYSE:EQT), other falling stocks that are still widely held by hedge funds include Fidelity National Information Services, Inc. (NYSE:FIS), Datadog, Inc. (NASDAQ:DDOG), and Tesla, Inc. (NASDAQ:TSLA).
Click to continue reading and see 5 Best Falling Stocks To Buy Now.
Suggested articles:
Disclosure: None. 14 Best Falling Stocks To Buy Now is originally published on Insider Monkey.