In this article, we discuss the 10 best rebound stocks to invest in now.
The United States economy is in a constant state of flux. In recent weeks, moderated growth, evolving monetary policies, and significant trade developments have impacted the overall outlook for the economy. The Organisation for Economic Co-operation and Development (OECD) anticipates a deceleration in US economic growth, projecting a decrease from 2.6% in 2024 to 1.6% in 2025. This slowdown is expected to be mitigated by monetary policy easing, with policy interest rates projected to decline by an additional 1.5 percentage points by the end of 2025, aligning rates toward neutral levels. Contrastingly, Goldman Sachs offers a more optimistic outlook, forecasting a 2.5% growth in US GDP for 2025, surpassing the consensus estimate of 1.9%. Chief US Economist David Mericle emphasizes the diminishing recession fears, noting that inflation is trending back toward 2%, and the labor market has rebalanced but remains strong. However, potential policy changes, including increased tariffs and reduced immigration, could influence this trajectory.
Read more about these developments by accessing 10 Best AI Data Center Stocks and 10 Buzzing AI Stocks According to Goldman Sachs.
Recent trade policies have introduced uncertainties into the economic landscape. President Trump’s announcement of 25% tariffs on imports from Mexico and Canada, and 10% on Chinese imports, has led to swift retaliatory measures and heightened fears of a global trade war. Major stock indices, including Germany’s DAX, France’s CAC, and the UK’s FTSE 100, experienced declines. In the US, the Dow Jones, S&P 500, and Nasdaq futures indicated drops as well. Analysts express concerns that these tariffs could increase consumer prices, affect corporate profits, and potentially lead to recessions in both Mexico and Canada. Financial institutions such as JPMorgan, Deutsche Bank, and Goldman Sachs are revising their economic forecasts, considering potential court injunctions against the tariffs, and evaluating broader economic impacts, including inflation hikes and growth decreases.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.
To make our list of the best rebound stocks to invest in now, we ranked the most valuable stocks with a market cap greater than $300 million that are down 30% or more year-to-date. Out of these, we picked the top ten stocks with the highest number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A financial analyst looking at a monitor displaying the stocks of the public company.
Best Rebound Stocks To Invest In Now
10. Septerna, Inc. (NASDAQ:SEPN)
Number of Hedge Fund Holders: N/A
Year-To-Date Decline in Share Price: 34.8%
Septerna, Inc. (NASDAQ:SEPN) is a clinical-stage biotechnology company that discovers and develops G protein-coupled receptor (GPCR) oral small molecule product candidates for the treatment of endocrinology, immunology and inflammation, and metabolic diseases. In November last year, investment advisory JPMorgan initiated coverage of the stock with an Overweight rating and a price target of $38, citing the company’s platform for GPCR drug design. Notwithstanding manifold newly actionable GPCR targets, we see Septerna executing a highly attractive pipeline strategy, focused on validated targets in large established indications where an oral option offers a clear benefit to patients, the bank said in a note.
9. Quantum Computing Inc. (NASDAQ:QUBT)
Number of Hedge Fund Holders: 2
Year-To-Date Decline in Share Price: 41.8%
Quantum Computing Inc. (NASDAQ:QUBT) is an integrated photonics company that offers accessible and affordable quantum machines. In late January, the company announced that it had received a fifth purchase order for its thin film lithium niobate photonic chip foundry from a research group based in Canada to support its research efforts on quantum photonics. William McGann, the CEO of the company, said that his firm was excited to partner with the research group. Quantum Computing has also recently announced collaborations with a leading European technical university and a Canadian PIC design house.
8. Falcon’s Beyond Global, Inc. (NASDAQ:FBYD)
Number of Hedge Fund Holders: 4
Year-To-Date Decline in Share Price: 40.5%
Falcon’s Beyond Global, Inc. (NASDAQ:FBYD) operates as an entertainment company in the United States, Saudi Arabia, Caribbean, Hong Kong, and internationally. The firm generated consolidated revenues of $2.1 million for the third quarter of 2024. It reported a consolidated net income of $39.3 million for the quarter, marking an increase of $35 million compared to the same period in 2023. This significant growth was primarily driven by a $40.6 million gain from the change in fair value of earnout liabilities, a $17.9 million decrease in losses from operations, and a $1.5 million increase in gains from equity method investments. Adjusted EBITDA improved by $4.6 million, resulting in a loss of $1.6 million for the quarter, compared to a loss of $6.2 million in the same period of the previous year.
7. Apogee Enterprises, Inc. (NASDAQ:APOG)
Number of Hedge Fund Holders: 16
Year-To-Date Decline in Share Price: 30.2%
Apogee Enterprises, Inc. (NASDAQ:APOG) provides architectural products and services for enclosing buildings, and glass and acrylic products used for preservation, protection, and enhanced viewing in the United States, Canada, and Brazil. The firm recently announced its financial results for the third quarter of fiscal year 2025. It reported net sales of $341.3 million, marking a slight increase of 0.5% compared to the same quarter in the previous year. Operating income was $28.6 million, resulting in an operating margin of 8.4%. Net earnings for the quarter were $21 million, translating to diluted earnings per share (EPS) of $0.96.
6. Owens & Minor, Inc. (NYSE:OMI)
Number of Hedge Fund Holders: 20
Year-To-Date Decline in Share Price: 31.6%
Owens & Minor, Inc. (NYSE:OMI) operates as a healthcare solutions company worldwide. The stock has nosedived in the past few days after the company announced that it would incur a non-cash goodwill impairment charge in the Apria business of $310 million — or $4 net loss per share — in its 2024 Q4 financial results. The healthcare products and services company has attributed the charge to a decline in its stock price, rising interest rates, and anticipated changes in pricing of a capitated contract. The company also released preliminary Q4 results, projecting revenue of $2.67 billion to $2.7 billion.
5. Agilysys, Inc. (NASDAQ:AGYS)
Number of Hedge Fund Holders: 20
Year-To-Date Decline in Share Price: 34.1%
Agilysys, Inc. (NASDAQ:AGYS) operates as a developer and marketer of software-enabled solutions and services to the hospitality industry in North America, Europe, the Asia-Pacific, and India. The firm recently announced results for the third quarter of fiscal year 2025. It achieved a record revenue of $69.6 million, marking a 14.9% increase compared to the same quarter in the previous year. Subscription revenue experienced significant growth, rising by 45.1% year-over-year and accounting for 63.8% of total recurring revenue. Adjusted EPS was reported at $0.38, surpassing analysts’ expectations of $0.34. Despite the positive earnings, Agilysys revised its full fiscal year 2025 revenue guidance to approximately $273 million, down from the previous range of $280 million to $285 million. This adjustment was attributed to challenges in one-time revenue streams, including slower point-of-sale bookings and the completion of significant development projects.
4. Establishment Labs Holdings Inc. (NASDAQ:ESTA)
Number of Hedge Fund Holders: 24
Year-To-Date Decline in Share Price: 33.2%
Establishment Labs Holdings Inc. (NASDAQ:ESTA) is a medical technology company that manufactures and markets medical devices for aesthetic and reconstructive plastic surgery. In November last year, the company reported its financial results for the third quarter of 2024. It achieved total revenue of $40.2 million, a 4.5% increase from $38.5 million in the same period of 2023. Gross profit was $25.7 million, representing 63.9% of revenue, compared to $26.1 million, or 67.7% of revenue, in the third quarter of 2023. The decline in gross margin was primarily due to geographic sales mix and unfavorable foreign currency exchange rates. Total operating expenses decreased by $8.2 million to $38.9 million, down from $47.1 million in the same quarter of the previous year.
3. Edison International (NYSE:EIX)
Number of Hedge Fund Holders: 29
Year-To-Date Decline in Share Price: 34.8%
Edison International (NYSE:EIX) engages in the generation and distribution of electric power. In mid-January, Ladenburg Thalmann analysts upgraded the stock to Neutral from Sell with a $56.50 price target, saying the shares now factored in a worst-case scenario. With Edison trading at a 34% P/E discount we believe the stock reflects reasonable worst-case outcomes associated with the current California wildfires, Ladenburg analysts Paul Fremont and Dylan Lipner said. The note further noted that it was too early to discern what the outcomes would be with respect to the impact of the fires on the California Wildfire Insurance Fund solvency and/or the future earnings of Edison International, adding that an initial assessment of SoCal Edison’s role in the start of the fires will likely not occur until summer 2025 at the earliest.
2. e.l.f. Beauty, Inc. (NYSE:ELF)
Number of Hedge Fund Holders: 40
Year-To-Date Decline in Share Price: 31.2%
e.l.f. Beauty, Inc. (NYSE:ELF) provides cosmetic and skin care products. Morgan Stanley recently upgraded the stock to Overweight from Equal Weight, with a corresponding hike of 10% in the target price to $153. Analysts Dara Mohsenian and Eric Serotta laid out several key factors contributing to the upgrade including the upside potential in revenue in the second half of this year, recent scanner data that shows factors that contributed to a pullback in the stock re-accelerating, easier comparison data, and negatives that were previously a concern now easing. Morgan Stanley also views potential tariffs as a wildcard but manageable versus what is currently priced into the stock price.
1. Dyne Therapeutics, Inc. (NASDAQ:DYN)
Number of Hedge Fund Holders: 40
Year-To-Date Decline in Share Price: 34.9%
Dyne Therapeutics, Inc. (NASDAQ:DYN) is a clinical-stage muscle disease company that operates as a biotechnology company that focuses on advancing therapeutics for genetically driven muscle diseases in the United States. The firm recently announced that the US Food and Drug Administration had issued a fast-track designation for DYNE-101, an experimental therapy for a rare muscle disorder called myotonic dystrophy type 1 (DM1). Fast-track designation allows for an accelerated timeline in the development and review of drugs targeted at serious conditions with unmet medical needs. The drug is currently undergoing a global Phase 1/2 trial for DM1. Dyne expects to seek the FDA’s accelerated approval for the product in H1 2026.
While we acknowledge the potential of Dyne Therapeutics, Inc. (NASDAQ:DYN) as an investment, our conviction lies in the belief that some stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a stock that is more promising than Dyne Therapeutics, Inc. (NASDAQ:DYN) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
