Donald Trump’s victory in the recent presidential election is expected to encourage companies that have been hesitant to pursue IPOs in 2025, capitalizing on the positive market reaction and anticipated deregulation. Following the election, the Russell 2000 Index rose to near a three-year high, while the S&P 500 reached record levels, creating a favorable environment for risk-taking among investors. Nearly $40 billion has been raised through IPOs this year, marking a 64% increase from 2023, although still below pre-pandemic averages. The pro-cryptocurrency stance of Trump may also influence the market, with expectations of increased activity in crypto-related IPOs if regulatory conditions improve. While an immediate surge in IPOs is unlikely due to a limited number of companies ready to file, there is optimism for a larger set of IPOs next year as companies seek to raise capital and insiders look for liquidity.
Generally, there’s also a noticeable disconnect between the tech IPO market and the broader IPO landscape, with many firms opting to remain private longer due to the growth of private credit as an alternative funding source. However, optimism exists that public markets will regain attractiveness as valuations rise and investor demand for public offerings increases. On October 24, Ashley MacNeill of Vista Equity Partners appeared on CNBC to shed light on the then-current stagnant state of the IPO market. We covered this in detail in our 10 Best IPO Stocks To Buy Heading into 2025 article, here’s an excerpt from it:
“MacNeill emphasized that for the IPO asset class to function effectively, 3 key conditions must align: a stable macroeconomic environment, investor willingness to deploy capital, and companies’ ability to communicate their earnings forecasts…
Despite the prevailing sentiment of a strong economy and record highs in the stock market, the IPO market remains stagnant. MacNeill suggested that this disconnect may stem from a bifurcation between the tech IPO market and the broader IPO market… MacNeill noted that this trend has contributed to the delay in the IPO market’s return to normalcy. However, she remains optimistic about the evolution of IPOs, suggesting that public markets will regain their appeal as high valuations and investor demand for public offerings increase.”
Additionally, expectations for M&A activity are on the rise, fueled by renewed investor eagerness. Mitch Berlin, vice chair of strategy and transactions at EY Americas, joined CNBC’s ‘The Exchange’ on November 22 to discuss what he sees for M&A activity in 2025. He noted that while there is a general sense of optimism, it is essential to differentiate between private equity and corporate growth. Berlin anticipates a 16% increase in private equity activity and an 8% increase in corporate transactions, driven largely by pent-up demand and significant capital reserves available for investment. This growth is also influenced by maturing assets that private equity firms are eager to leverage.
Looking ahead, Berlin speculated on potential headlines for early 2025, predicting larger deals primarily within the tech sector, fueled by advancements in AI. He also highlighted the continued importance of oil and gas in M&A, albeit from a value rather than volume perspective. Life sciences companies are expected to utilize their cash-rich balance sheets to make strategic acquisitions aimed at replenishing their research and development pipelines. Furthermore, he expressed optimism that regulatory hurdles from the Federal Trade Commission (FTC) and Department of Justice (DOJ) would become less of a barrier, allowing for smoother deal approvals.
Addressing concerns about interest rates, Berlin reassured that the current environment would not hinder deal-making. He expects interest rates to decrease further in 2025, which could stimulate more activity. Many deals are being funded through cash on hand, and private credit continues to be a significant source of financing, with three-quarters of deals this year being supported by such credit.
Berlin’s insights reflect a robust outlook for both private equity and corporate M&A activity as firms adapt to changing market conditions. As firms adapt to the changing market, investors should stay alert for new opportunities. With an anticipated strong IPO market in 2025, this context sets the stage for our upcoming list of the 10 best up-and-coming stocks to buy according to analysts.
Methodology
We used the Finviz stock screener to compile an initial list of 30 stocks that went public in the last 5 years. We then selected the 10 stocks with high analysts’ upside potential and that were also the most popular among elite hedge funds. The stocks are ranked in ascending order of analysts’ upside potential.
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).
10 Best Up and Coming Stocks To Buy According to Analysts
10. Archer Aviation Inc. (NYSE:ACHR)
Average Upside Potential as of November 26: 38.79%
Number of Hedge Fund Holders: 24
Archer Aviation Inc. (NYSE:ACHR) is an urban air mobility company focused on developing electric vertical takeoff and landing (eVTOL) aircraft designed for efficient and sustainable air transportation in urban environments. It’s working on manufacturing and certifying its aircraft, with plans to launch air taxi services in several cities by 2026.
The Federal Aviation Administration (FAA) has made significant strides in regulating electric air taxis, paving the way for their commercial launch in the US by 2025. This development signifies a major leap forward for urban air mobility. Archer Aviation Inc. (NYSE: ACHR) is at the forefront of this revolution, actively collaborating with the FAA to certify its Midnight aircraft, an advanced eVTOL aircraft. The company has completed the initial certification phases and is now focused on meeting the rigorous safety standards set by the FAA. Additionally, the company is working with international regulators to expand its global reach.
A strategic partnership with Falcon Aviation and Etihad will facilitate the recruitment and training of pilots, the establishment of maintenance protocols, and the organization of initial regional piloted flight exhibitions, anticipated to launch in 2025. Additionally, the company has agreed with Japan Airlines and Sumitomo Corporation’s joint venture, Soracle, to introduce eVTOL technology to the Japanese market. This collaboration aims to bring Midnight aircraft to congested cities like Tokyo, offering a more efficient and sustainable mode of transportation.
With strong industry partnerships and a relentless commitment to innovation, the future of electric air taxis appears promising. As a result, Archer Aviation Inc. (NYSE:ACHR) emerges as a compelling investment opportunity.
9. Renew Energy Global (NASDAQ:RNW)
Average Upside Potential as of November 26: 48.64%
Number of Hedge Fund Holders: 16
Renew Energy Global (NASDAQ:RNW) generates power from renewable energy sources, primarily focusing on wind and solar energy. It develops, builds, and operates large-scale energy projects that provide clean electricity to commercial and industrial customers, primarily in India. It provides decarbonization solutions through a mix of green hydrogen, data-driven solutions, storage, manufacturing, and carbon markets.
The company recently partnered with Microsoft to significantly boost its green energy efforts. This partnership involves a 437.6 MW green attribute sale contract, which is supposed to generate substantial clean electricity. This collaboration marks a significant milestone in India’s renewable energy landscape, contributing to the country’s ambitious climate goals.
Renew Energy Global (NASDAQ:RNW) reported strong financial performance for the second quarter of 2025, driven by cost optimization and operational efficiency. The company achieved $318.89 million in quarterly revenue, although this was a 7.48% year-over-year decline. Its strong financial performance, coupled with its strategic focus on growth, positions the company for continued success.
8. Concentrix Corp. (NASDAQ:CNXC)
Average Upside Potential as of November 26: 58.16%
Number of Hedge Fund Holders: 21
Concentrix Corp. (NASDAQ:CNXC) is a global provider of customer experience solutions that help businesses improve their interactions with customers. It offers a range of services, including customer support through various channels like voice, chat, and email, as well as technology-driven solutions for process optimization and analytics. It’s a team of technologists and engineers who build and integrate technology solutions and the infrastructure that powers them.
The company’s offerings in process automation and data analytics set it apart from competitors. Its extensive global reach and diverse customer base provide a strong foundation for sustained growth. To further strengthen its position, it’s investing in technology and GenAI. The company’s AI advancements in knowledge management, customer support, and automation are expected to drive efficiency and cost savings. The recent patent for its AI platform, GILES, which automates coding and testing processes, highlights its commitment to innovation.
Concentrix Corp. (NASDAQ:CNXC) reported solid financial results for the third quarter of 2024, ending in August. The company is actively transforming its business by focusing on higher-value, long-term contracts and leveraging technology to drive efficiency. However, it faces challenges such as lower transaction volumes in certain segments and margin pressure from dual costs and upfront investments. Despite these challenges, the company remains optimistic about its long-term growth prospects, driven by its strong market position, strategic investments, and ability to adapt to changing industry dynamics.
FPA Queens Road Small Cap Value Fund stated the following regarding Concentrix Corporation (NASDAQ:CNXC) in its Q3 2024 investor letter:
“Concentrix Corporation (NASDAQ:CNXC) is one of two top customer experience (CX) vendors globally. The company began by managing call centers but has since evolved into a high-tech business process outsourcer (BPO) that also designs and runs customer-facing websites and apps, integrates the data, and optimizes a client’s customer interactions. The company was spun out from TD Synnex, another of the Fund’s core holdings, and we have always been impressed with CNXC’s innovation and growth. CX is a relatively new business model, and Concentrix has been rolling up smaller competitors. In March, 2023 they bought WebHelp, a leading European CX player, for $4.8B in cash and stock. 22 We believe the WebHelp acquisition will help consolidate an industry where Concentrix and Teleperformance are the largest players.
The market is currently concerned about the potential of artificial intelligence to disrupt Concentrix’ core call center business – all CX companies’ shares are down badly over the last two years.23 On Sep. 25, 2024 CNXC stock got hit again when they released fiscal 2024 Q3 results and took down revenue guidance – fiscal 2024 organic revenue is now expected to come in between -.5% and 1.5%. 24 Concentrix has a debt to EBITDA ratio of 3x from the Webhelp deal which will be a problem if earnings deteriorate quickly. But Concentrix now trades at less than five times adjusted EPS and is highly cash generative. We think, but don’t know, that Concentrix’ domain knowledge and integration into customers’ work flows make for meaningful switching costs and that clients will be reluctant to let AI manage the relationships with their customers. We have held on to Concentrix shares but have not added to the position.”
7. Weatherford International (NASDAQ:WFRD)
Average Upside Potential as of November 26: 65.04%
Number of Hedge Fund Holders: 43
Weatherford International (NASDAQ:WFRD) is an oilfield services company that provides equipment and services for the oil and natural gas industry. It specializes in various aspects of well operations, including drilling, evaluation, completion, production, and intervention. Its offerings include technologies such as artificial lift systems, cementing products, and drilling tools.
This company has a history of successful acquisitions, which are a part of its strategy to enhance its technology offerings and expand its capabilities within the energy services sector. Most recently, it acquired Datagration Solutions, a company specializing in data integration, analytics, and machine learning. This move will enhance Weatherford International’s (NASDAQ:WFRD) digital capabilities, enabling it to offer more advanced solutions for oil and gas production and asset optimization.
By integrating Datagration’s technology with Weatherford International’s (NASDAQ:WFRD) existing digital platforms, the company aims to improve operational efficiency, enhance decision-making, and accelerate digital transformation across the energy industry. Furthermore, this acquisition will contribute to improved sustainability efforts by allowing for more accurate tracking and management of emissions.
Yacktman Asset Management made the following comment about Weatherford International plc (NASDAQ:WFRD) in its Q3 2022 investor letter:
“Weatherford International plc (NASDAQ:WFRD) shares rallied due to solid revenue growth and margin expansion. After many years of restructuring, the company’s results are improving significantly, which we think offers continued upside to the shares.”
6. Zeta Global Holdings Corp. (NYSE:ZETA)
Average Upside Potential as of November 26: 100.00%
Number of Hedge Fund Holders: 31
Zeta Global Holdings Corp. (NYSE:ZETA) offers a data-driven cloud platform designed for consumer intelligence and marketing automation. It provides businesses with tools to analyze vast amounts of data to predict consumer behavior and optimize marketing strategies. Globally, it is recognized as a next-gen banking technology company. Its platform enables financial institutions to launch extensible and compliant banking asset and liability products, across cards, loans, and deposits.
The company’s third quarter was marked by significant financial growth and technological advancements. It raised over $900 million in capital, including an undrawn loan facility. Its annual Zeta Live event saw record-breaking in-person attendance. Overall, there was a strong 41.97% increase in revenue to $268.30 million, as compared to the year-ago period. Primary reasons behind this improvement include the launch of a new intelligent mobile product and the next generation of GenAI.
Its annual Zeta Live conference showcased the launch of its AI-powered intelligent mobile solution and the expansion of its AI agent lineup. The intelligent mobile solution enables marketers to leverage AI for personalized cross-channel campaigns and persistent identity across touchpoints. The expanded AI agent lineup offers powerful, first-of-its-kind capabilities for marketers.
5. Legend Biotech Corp. (NASDAQ:LEGN)
Average Upside Potential as of November 26: 102.81%
Number of Hedge Fund Holders: 31
Legend Biotech Corp. (NASDAQ:LEGN) is a clinical-stage biopharmaceutical company engaged in the discovery and development of cell therapies for oncology and other indications. Its lead product candidate, LCAR-B38M, is designed to treat multiple myeloma, a type of blood cancer.
In the third quarter of 2024, the company reported strong financial performance, driven by the significant growth of its flagship drug, CARVYKTI. CARVYKTI is the brand name for the chimeric antigen receptor T-cell (CAR-T) therapy known as LCAR-B38M, which is designed to target B-cell maturation antigen (BCMA) for the treatment of multiple myeloma, as mentioned earlier.
Net trade sales of CARVYKTI surged 87.6% year-over-year to approximately $286 million. This growth was fueled by increased demand and expanded patient access. The company’s overall quarterly revenue improved by 66.86%, generating an amount of $160.21 million. Despite the positive momentum, the company reported a net loss of $125 million, primarily due to increased spending on research and development.
CARVYKTI demonstrated significant efficacy in treating multiple myeloma patients, with a 45% reduction in the risk of death compared to standard therapies. The company also received approval for CARVYKTI production in Belgium, enhancing its global manufacturing capabilities.
Legend Biotech Corp. (NASDAQ:LEGN) is eagerly anticipating the upcoming data update for the CARTITUDE-1 and IMAgINE-1 trials, which will provide further insights into the efficacy and safety of CARVYKTI in different patient populations. The strong demand for CARVYKTI and the potential for expanded indications offer significant growth opportunities. Hence, the company is well-positioned to capitalize on the growing demand for innovative cancer therapies.
TimesSquare Capital Management U.S. Focus Growth Strategy stated the following regarding Legend Biotech Corporation (NASDAQ:LEGN) in its Q2 2024 investor letter:
“Pulling back by -27% was Legend Biotech Corporation (NASDAQ:LEGN), a biotechnology developer of cell therapies to treat blood cancers such as multiple myeloma and leukemia. Recently both the European Union and the FDA approved the use of Legend’s Carvykti treatment of multiple myeloma. Some investors may have been concerned about possible supply delays as Legend ramps up production. Though with a long-standing agreement with Johnson & Johnson and a new partnership with Novartis for increasing production capacity, we see a long runway of growth ahead. Later in the quarter, there were concerns surrounding potential negative impacts from Congress’s draft BIOSECURE Act, which would bar certain Chinese-controlled biotechnology companies from U.S. government contracts. Our initial view is that Legend may not fall under the scope of the Act, though in our discussions with Legend’s management they seem ready to take steps to avoid possible negative outcomes from the Act. However, with that potential risk we removed the position from our concentrated strategy.”
4. Enovix Corp. (NASDAQ:ENVX)
Average Upside Potential as of November 26: 115.98%
Number of Hedge Fund Holders: 14
Enovix Corp. (NASDAQ:ENVX) is a leader in advanced silicon-anode lithium-ion battery development and production. It focuses on creating batteries that are safer, more efficient, and longer-lasting compared to traditional lithium-ion batteries. Its innovative battery technology is aimed at various industries, including wearables, smartphones, laptops, electric vehicles, and medical devices.
In the third quarter of 2024, the company made significant progress. It opened a new manufacturing facility in Malaysia, Fab2, to boost production. This facility is already shipping battery cells to customers. Additionally, it recently announced a development agreement with one of the top 5 smartphone manufacturers in China. This collaboration aims to develop a customized 100% active silicon anode battery, designed to power smartphones launching in late 2025.
This partnership marks a significant milestone for the company, solidifying its position in the smartphone market and demonstrating the growing demand for high-energy-density batteries. By leveraging its innovative technology, it aims to deliver batteries that can significantly enhance the performance and battery life of smartphones.
Financially, the company saw impressive growth. Revenue for the quarter reached $4.32 million, a substantial increase of 2,058.50% compared to the same period last year. Looking ahead, the company expects revenue to continue growing, with a projected range of $8.0 million to $10.0 million for the fourth quarter.
Its cutting-edge technology and commitment to innovation have positioned the company as a key player in the battery industry. With a focus on delivering high-performance batteries for various applications, including IoT devices, mobile devices, computing devices, and electric vehicles, Enovix Corp. (NASDAQ:ENVX) is poised to shape the future of battery technology.
Massif Capital Real Assets Strategy stated the following regarding Enovix Corporation (NASDAQ:ENVX) in its Q2 2024 investor letter:
“Enovix Corporation (NASDAQ:ENVX): Enovix is perhaps a bit of an outlier in our portfolio given that it is a battery manufacturer selling into consumer goods markets, but it fits nicely in what we believe to be the Massif Capital analytical sweet spot, businesses where science/technology, geopolitics/geoeconomics and energy/materials overlap. While some would argue that Enovix is inappropriate for a liquid real asset portfolio, the traditional definition of real asset businesses is dated.
Traditionally, real asset businesses are those that own and operate real estate, infrastructure, and natural resource assets. While this definition is workable, and most of the companies we invest in fall into one of these categories, it does not consider the ever-growing role of applied physical sciences in specific manufacturing fields, nor does it take into account the growing importance of material sciences and the changing nature of energy in general. Enovix is a material sciences business aiming to transform an ever-growing list of unique, highly refined materials into energy storage devices. They create value by understanding materials’ physical and electrochemical properties better than others…” (Click here to read the full text)
3. PACS Group Inc. (NYSE:PACS)
Average Upside Potential as of November 26: 141.84%
Number of Hedge Fund Holders: 32
PACS Group Inc. (NYSE:PACS) is a healthcare company that operates skilled nursing facilities and assisted living services across the US. It focuses on providing post-acute care, including rehabilitation and long-term care. It makes money by leasing facilities and receiving payments from insurance companies based on the number of residents and services provided.
It has expanded its operations into Pennsylvania recently. It acquired 8 skilled nursing facilities located in the western part of the state, including Pittsburgh, Bedford, Bethel Park, Monroeville, and McMurray. These facilities collectively offer 1,199 skilled nursing beds. This acquisition marks a significant milestone for the company, as it expands its footprint into a new state and strengthens its position as a national provider of post-acute care services. PACS Group Inc. (NYSE:PACS) has a strong track record of improving occupancy rates to 94% or higher within 18 months of taking over a facility.
Financially, the company has shown impressive growth. It generated a revenue of $981.85 million in Q3 2024 alone. The SNF industry is expected to consolidate, and PACS Group Inc. (NYSE:PACS) is well-positioned to benefit from this trend. Its facilities are located in urban areas, which helps to mitigate potential staffing challenges. Additionally, the growing number of elderly people and the increasing prevalence of dementia are driving demand for SNFs.
2. Structure Therapeutics Inc. (NASDAQ:GPCR)
Average Upside Potential as of November 26: 145.35%
Number of Hedge Fund Holders: 40
Structure Therapeutics Inc. (NASDAQ:GPCR) is a clinical-stage biopharmaceutical company focused on developing innovative therapies for metabolic diseases and obesity. It’s advancing its lead product candidate, GSBR-1290, an oral small molecule GLP-1 receptor agonist, for the treatment of obesity and type 2 diabetes. It is currently undergoing clinical trials.
The company recently reported strong financial results for the third quarter of 2024. It has a significant amount of cash, around $915 million, which is expected to fund their operations and clinical trials until at least 2027.
A key development is the progress of GSBR-1290. The company is conducting two Phase 2 clinical trials, ACCESS and ACCESS II, to evaluate the effectiveness and optimal dosing of GSBR-1290 in people with obesity. The first patients have already been enrolled in the ACCESS trial, and the company plans to start higher dose groups in the ACCESS II trial by the end of the year. Results from these trials are expected in late 2025.
While Structure Therapeutics Inc. (NASDAQ:GPCR) has other drug programs in development, GSBR-1290 is currently their most advanced and promising candidate. The company’s strong financial position and the progress of GSBR-1290 suggest that it’s well-positioned for future success in the biotech industry.
Baron Health Care Fund stated the following regarding Structure Therapeutics Inc. (NASDAQ:GPCR) in its fourth quarter 2023 investor letter:
“Structure Therapeutics Inc. (NASDAQ:GPCR) is a biotechnology company dedicated to making oral small molecule medicines to target the obesity and diabetes market. Recent share weakness has been due to two large pharmaceutical acquisitions in the space: Roche’s purchase of Carmot and AstraZeneca’s in-licensing of Eccogene’s GLP-1 asset. These developments were followed by updates from Structure that implied it had a promising asset, but it might be inferior to Eli Lilly’s first-in-class product. Shares fell as analysts reduced the probability of success surrounding potential peak sales. We think it is too early to reach a final conclusion on the company’s oral small molecule GLP-1, as these data sets are limited in total sample size, and there are compelling arguments for both sides. Given how quickly this space changes and our smaller position sizing due to the aforementioned dynamics, we are monitoring our position and making decisions based on our evolving analysis.
We initiated a small position in Structure Therapeutics Inc., a clinical-stage biotechnology company. Structure is developing an oral small molecule GLP-1 with once daily dosing. We think the GLP-1 class of obesity/diabetes drugs has the potential to be the largest drug class ever and that parts of the market will be particularly well suited to oral medications. Some people find oral medications more convenient than injectables, and oral small molecule drugs are cheaper and easier to manufacture than injectables, which could allow for lower pricing and greater access, particularly in international markets. Structure’s drug is still in its early phase of development, but there is reason to think that it could be successful. The drug was designed through the company’s structure-based drug discovery platform and was designed to selectively activate the G-protein signaling pathway, which should lead to a better efficacy/safety profile. In late September, Structure announced promising results from a Phase 1 multiple ascending dose study in non-diabetic overweight/obese individuals. Although there were only a few patients in the study, the drug impressively demonstrated reductions in mean body weight of up to 4.9% placebo-adjusted after 28 days, which would suggest a best-in-class profile. Then, in December, Structure announced results from its Phase 2a study, including a diabetic cohort and a non-diabetic overweight/obese cohort. The interim data from the obesity cohort continued to look competitive with 4.7% placebo-adjusted weight loss after 56 days. The diabetes data was somewhat underwhelming, with a 1.0% placebo-adjusted HbA1c reduction and 3.3% to 3.5% placebo-adjusted weight loss over 84 days (in comparison, Lilly’s orforglipron showed a 1.5% to 1.7% HbA1c reduction and 4.1% to 6.3% placebo-adjusted weight loss in a similar study). Structure is planning to study additional doses and titration regimens to optimize the drug’s profile in diabetes. Overall, we would characterize the early data as supportive of an active GLP-1 drug that has the potential to be among the leaders in the category. At this point we have a small position in the stock while we await more data to evaluate the competitiveness of Structure’s drug.”
1. Day One Biopharmaceuticals Inc. (NASDAQ:DAWN)
Average Upside Potential as of November 26: 190.39%
Number of Hedge Fund Holders: 34
Day One Biopharmaceuticals Inc. (NASDAQ:DAWN) is a clinical-stage biopharmaceutical company that develops targeted therapies for patients with genomically defined cancers. It focuses on creating treatments for specific cancer types, including its lead product candidate, tovorafenib, which is an oral medication under the brand name OJEMDA. It is a treatment for pediatric low-grade glioma (pLGG), a type of brain or spinal cord tumor that affects children.
A major milestone for the company was the FDA approval of OJEMDA in April 2024. This approval is significant as it offers a new and effective treatment option for pLGG, a disease that has historically lacked targeted therapies. OJEMDA has shown promising results in clinical trials, demonstrating its ability to improve the quality of life for young patients with pLGG. Driven by these factors, the company was able to generate $93.76 million in Q3 2024.
The company achieved $20.1 million in net product revenue for OJEMDA in the third quarter of 2024, a significant increase over the previous quarter. This growth is attributed to increased prescriptions, high patient persistence, expanding prescriber base, and favorable payer coverage. With the continued momentum of OJEMDA and the advancement of its pipeline, Day One Biopharmaceuticals Inc. (NASDAQ:DAWN) is well-positioned for future growth and value creation for its shareholders.
While we acknowledge the growth potential of Day One Biopharmaceuticals Inc. (NASDAQ:DAWN), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than DAWN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
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