In this piece, we will take a look at the 15 best falling stocks to buy now. If you want to skip our overview of the current stock market environment and our coverage of the latest stock market news, then you can skip ahead to 5 Best Falling Stocks To Buy Now.
With 2023 coming to a close, one thing that isn't going away is uncertainty in the stock market. This year has been quite a roller coaster ride, as between January 2023 and November 2023, indexes have seen new highs and then tumbled afterward. At the heart of these trends are high interest rates and inflation, both of which aren't great for the market. As everyone's well aware by now, to tame inflation, the Fed has to raise interest rates. Raising interest rates makes alternative investment vehicles more attractive than the stock market, reduces consumer spending, and raises the cost of capital for doing business. The latter two implications aren't great for the economy, which then adds to the already weak market sentiment.
Amid the AI-led rally, markets roared to life with the tech heavy NASDAQ index setting a new record for first half returns this year. This was fueled by optimism surrounding A.I. as investors bet heavily on the tech sector. Then, the second half remained muted with uncertainty surrounding the future of the Fed's interest rate cycle.
This uncertainty seemed to be a thing of the past in November as between November 6th, 2023, and December 4th, the Dow Jones Industrial Average (DJIA) gained 6.18%, the S&P 500 soared by 4.67%, and the the NASDAQ Composite by 4.93%. Wall Street was fueled by euphoria emanating from weaker inflation readings and robust economic growth that made the Fed's 'soft landing' expectation for the economy appear nearly certain.
At the same time, even as the Fed's future direction is becoming clear, the economy is starting to noticeably slow down. The start of each month is marked by data releases from the Commerce and Labor Department, and the latest data set is the manufacturers’ shipments, inventories, and orders data from the Census Bureau. It shows that month over month, new orders for manufactured goods fell by 3.6% in October, which accelerated over the 2.3% drop in September. Within this data set, orders for costly transportation equipment that often requires debt financing dropped by 14.7%. Crucially, the shift in investor sentiment about Fed rate cuts appears to be fluctuating as well. This is because investor expectations as measured by the CME FedWatch Tool fell from roughly 60% expecting a 25 basis point cut in March 2024 to 51.9% during the business day on December 4th. Seems like ahead of the jobs report, investors are still recalling earlier trauma where the slightest hint of a hot economy spurred the Fed into action and dented indexes.
So what do the analysts say about the market's future? Well, those working for Stifel aren't that optimistic. They believe that there are no interest rate cuts on the horizon during H1 2024, an assumption that makes them predict modest performance for at least the S&P 500. According to their analysis, the S&P 500 index should touch a peak of 4,650 points in mid 2024. Compared to its latest reading of 4,569, this prices in a rather modest upside which if realized would leave most people better off by putting their money in banks instead (just as the high interest rates are designed to do).
Amidst this turmoil, we decided to take a look at which stocks fell this year but have continued to attract hedge fund attention and interest. The logic behind it is that smart money often plans long term, and while the share prices might be down now, perhaps there are some broader catalysts that the funds have picked up on. The top stocks in this list of the best falling stocks to buy are DISH Network Corporation (NASDAQ:DISH), Travere Therapeutics, Inc. (NASDAQ:TVTX), and Farfetch Limited (NYSE:FTCH).
A close-up of a chart of company stock prices rising, reflecting its market capitalization.
Our Methodology
To make our list of the best falling stocks to buy, we first narrowed down to 30 stocks with a market capitalization greater than $300 million and the biggest year to date losses. Then, they were ranked by the number of hedge funds that had bought their shares during Q3 2023 and the top best falling stocks to buy are as follows.
15. IGM Biosciences, Inc. (NASDAQ:IGMS)
Year To Date Share Price Losses: 65.25%
Number of Hedge Fund Investors In Q3 2023: 17
IGM Biosciences, Inc. (NASDAQ:IGMS) is a biotechnology company headquartered in Mountain View, California. It is developing treatments for cancer, inflammatory diseases, and other ailments. It marks a strong start to our list of the best falling stocks, as the shares are rated Strong Buy on average and analysts have set an average share price target of $20.60.
During Q3 2023, 17 out of the 910 hedge funds part of Insider Monkey's database had bought and owned a stake in IGM Biosciences, Inc. (NASDAQ:IGMS). Julian Baker and Felix Baker's Baker Bros. Advisors owned the largest stake in the firm, which was worth $26.3 million.
Along with Travere Therapeutics, Inc. (NASDAQ:TVTX), DISH Network Corporation (NASDAQ:DISH), and Farfetch Limited (NYSE:FTCH), IGM Biosciences, Inc. (NASDAQ:IGMS) is a falling stock that hedge funds are buying.
14. AMC Entertainment Holdings, Inc. (NYSE:AMC)
Year To Date Share Price Losses: 75.52%
Number of Hedge Fund Investors In Q3 2023: 18
AMC Entertainment Holdings, Inc. (NYSE:AMC) is an American entertainment and theater operator headquartered in Leawood, Kansas. The third quarter wasn't favorable to its stock, as one of America's biggest pension funds reduced its holdings by a sharp 77%.
During the same quarter, 18 out of the 910 hedge funds profiled by Insider Monkey had held a stake in the firm. AMC Entertainment Holdings, Inc. (NYSE:AMC)'s biggest hedge fund investor is Paul Marshall and Ian Wace's Marshall Wace LLP due to its $28.1 million investment.
13. NextEra Energy Partners, LP (NYSE:NEP)
Year To Date Share Price Losses: 65.81%
Number of Hedge Fund Investors In Q3 2023: 19
NextEra Energy Partners, LP (NYSE:NEP) is a pureplay American energy utility that is headquartered in Juno Beach, Florida. More than 90% of its shares are held by institutional investors, which leaves the stock vulnerable to sharp drops but also lends it some credibility.
As this year's third quarter ended, 19 among the 910 hedge funds tracked by Insider Monkey were NextEra Energy Partners, LP (NYSE:NEP)'s investors.
12. ECARX Holdings Inc. (NASDAQ:ECX)
Year To Date Share Price Losses: 68.20%
Number of Hedge Fund Investors In Q3 2023: 19
ECARX Holdings Inc. (NASDAQ:ECX) is a British firm that sells technology based automotive products. The firm scored a win in November when a Chinese car that uses its digital co*ckpit solution entered mass production to potentially unlock future revenue.
Insider Monkey dug through 910 hedge fund portfolios for their September quarter of 2023 shareholdings and found that 19 had invested in ECARX Holdings Inc. (NASDAQ:ECX).
11. Lumen Technologies, Inc. (NYSE:LUMN)
Year To Date Share Price Losses: 70.95%
Number of Hedge Fund Investors In Q3 2023: 19
Lumen Technologies, Inc. (NYSE:LUMN) is an American telecommunications company that serves both corporate and residential customers. Analysts have rated the stock as Hold on average and Lumen Technologies, Inc. (NYSE:LUMN) has beaten analyst EPS estimates in three of its four latest quarters.
As of Q3 2023 end, 19 out of the 910 hedge funds profiled by Insider Monkey had held a stake in Lumen Technologies, Inc. (NYSE:LUMN).
10. CommScope Holding Company, Inc. (NASDAQ:COMM)
Year To Date Share Price Losses: 74.53%
Number of Hedge Fund Investors In Q3 2023: 20
CommScope Holding Company, Inc. (NASDAQ:COMM) is a communications products provider headquartered in Claremont California. The firm had a disappointing third quarter as its revenue dropped by 32.8% annually amidst a broader slowdown in the telecom sector.
Insider Monkey dug through 910 hedge fund portfolios for this year's September quarter to find that 20 were the firm's shareholders. Bob Peck and Andy Raab's FPR Partners was the largest CommScope Holding Company, Inc. (NASDAQ:COMM) shareholder among these courtesy of its $71.1 million stake.
9. Banc of California, Inc. (NASDAQ:PACW)
Year To Date Share Price Losses: 67.9%
Number of Hedge Fund Investors In Q3 2023: 21
Banc of California, Inc. (NASDAQ:PACW) is a small Californian regional bank headquartered in Los Angeles, California. November 2023 was a pivotal month for the firm as it completed a merger that expanded its presence to more than 70 branches in California.
By the end of this year's third quarter 21 out of the 910 hedge funds surveyed by Insider Monkey had invested in its predecessor, Banc of California, Inc. (NYSE:BANC). Amy Minella's Cardinal Capital owned the biggest stake among these which was worth $18.8 million.
8. Silk Road Medical, Inc (NASDAQ:SILK)
Year To Date Share Price Losses: 80.10%
Number of Hedge Fund Investors In Q3 2023: 21
Silk Road Medical, Inc (NASDAQ:SILK) is a medical device company that sells products used in the cardiovascular system. The shares were under a lot of strain in October 2023 as Citi downgraded the stock to Sell from Buy, and B. Riley and Stifel downgraded it to Neutral. The average share price target is $11.57.
As September 2023 ended, 21 out of the 910 hedge funds profiled by Insider Monkey were the firm's shareholders. Silk Road Medical, Inc (NASDAQ:SILK)'s largest investor in our database is Paul Marshall and Ian Wace's Marshall Wace LLP as it owns 977,961 shares that are worth $14.6 million.
7. Hawaiian Electric Industries, Inc. (NYSE:HE)
Year To Date Share Price Losses: 67.98%
Number of Hedge Fund Investors In Q3 2023: 23
Hawaiian Electric Industries, Inc. (NYSE:HE) is a Hawaii based business conglomerate known primarily for its utility business in the state. Its stock tanked in August 2023 to a 13 year low after it was hit with lawsuits alleging that its equipment might have led to the deadly Maui wildfires.
Insider Monkey's third quarter of 2023 survey covering 910 hedge funds revealed that 23 had invested in Hawaiian Electric Industries, Inc. (NYSE:HE). Cliff Asness' AQR Capital Management was its biggest investor since it owned $75.3 million worth of shares.
6. NovoCure Limited (NASDAQ:NVCR)
Year To Date Share Price Losses: 80.8%
Number of Hedge Fund Investors In Q3 2023: 24
NovoCure Limited (NASDAQ:NVCR) is a small medical device company that is specifically targeting cancer. The shares are rated Buy on average and analysts have set an average share price target of $47.88.
24 out of the 910 hedge funds part of Insider Monkey's Q3 2023 database had bought and owned the firm's shares. NovoCure Limited (NASDAQ:NVCR)'s largest hedge fund investor out of these is David Kroin's Deep Track Capital courtesy of its $40.3 million investment.
DISH Network Corporation (NASDAQ:DISH), NovoCure Limited (NASDAQ:NVCR), Travere Therapeutics, Inc. (NASDAQ:TVTX), and Farfetch Limited (NYSE:FTCH) are some falling stocks that hedge funds continue to buy.
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Disclosure: None.15 Best Falling Stocks To Buy Now is originally published on Insider Monkey.
