10 Best Spin Off Stocks to Buy According to Hedge Funds

1. GE HealthCare Technologies Inc. (NASDAQ:GEHC)

Number of Hedge Fund Holders: 50

GE Healthcare Technologies Inc. (NASDAQ:GEHC) is a healthcare firm that creates products and services for diagnosing, treating, and monitoring patients. Previously a part of General Electric, GE Healthcare spun out and began trading as an independent company on January 4, 2023.

On January 8, Jefferies analysts recently raised GE HealthCare Technologies Inc. (NASDAQ:GEHC)’s rating from Hold to Buy, citing a more bullish outlook for the firm. The analysts emphasized the company’s ability to acquire market share in diagnostic imaging and prenatal diagnostics, which they regarded as increasing and under-modeled for future development.

On January 28, GE HealthCare Technologies Inc. (NASDAQ:GEHC) revealed that it had acquired FDA 510(k) approval for its revised Voluson Expert Series ultrasound systems which use sophisticated imaging and specific probes to help women’s healthcare providers make better diagnostic and treatment decisions.

Oakmark Fund stated the following regarding GE HealthCare Technologies Inc. (NASDAQ:GEHC) in its Q4 2024 investor letter:

“GE HealthCare Technologies Inc. (NASDAQ:GEHC) is a leading global medical technology company that was spun off from General Electric in January 2023. As a standalone company, we expect GE HealthCare to benefit from increased focus, better aligned management and incentives, and an improved corporate culture. We believe these changes will help drive higher margins and organic growth. In addition, we think GE HealthCare is well-positioned to capitalize on technology trends as a greater portion of the value proposition comes from AI-enabled software and a shift toward precision care. A lack of appreciation for the company’s self-help potential coupled with short-term concerns around weak demand in China provided us with the opportunity to purchase shares at a low valuation relative to other high-quality medical technology companies and at the lowest price relative to the S&P 500 since the IPO.”

While we acknowledge the potential of GEHC, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than GEHC 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.

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