10 Most Promising Mid-Cap Stocks According to Hedge Funds

4. KBR, Inc. (NYSE:KBR)

Number of Hedge Fund Holders: 56

Market Capitalization as of October 10, 2024: $9.08 Billion

KBR, Inc. (NYSE:KBR) ranks fourth on our list of the most promising stocks to buy according to hedge funds. The engineering company operates in the science and technology departments to solve today’s critical challenges such as energy transition, national security, cybersecurity, climate change, and space exploration. KBR, Inc. (NYSE:KBR) has two primary businesses, government solutions and sustainable technology solutions.

The company is committed to delivering sustainable and net-zero solutions to its customers. Its sustainable technology solutions segment operates through two divisions: sustainable services, which include consulting and integrated solutions, and sustainable technology, which includes petrochemicals, clean fuel technologies, modular solutions, and hydro-PRT. On the other hand, its government solutions segment provides long-term technology solutions in AI, data management, cybersecurity, defense modernization, advisory and consulting, nuclear energy, and asset management.

During the second quarter of 2024, the company announced an agreement to acquire LinQuest, an engineering and data analytics company. The acquisition will help the company accelerate its position in delivering high-end technological solutions. More recently, KBR, Inc. (NYSE:KBR) marked a milestone, after its proprietary ROSE technology was selected by Zhejiang Petroleum for its largest unit in China. In addition to that the company also bagged contracts in Brazil, established training centers in Iraq, extended support for programs in Australia, and expanded supply in Europe.

Overall, KBR, Inc. (NYSE:KBR) holds a unique position in the industry. Its footprint is continuously expanding and with its diversified offerings, it sure possesses an upward trajectory. At the end of Q2 2024, 56 hedge funds were bullish on KBR.

Cove Street Capital Small Cap Value Fund stated the following regarding KBR, Inc. (NYSE:KBR) in its Q2 2024 investor letter:

“On the plus side, KBR, Inc. (NYSE:KBR) has been a strong performer so far YTD on the back of an investor day in the second quarter that highlighted the success of the last four-year plan (2020-2023) before laying out ambitious but credible targets for the next 4 years (2024- 2027). Since 2020, KBR has pivoted their commercial business away from high-risk EPC projects to a more differentiated IP-first consulting approach that now sees 20% EBIT margins and contributes 40% of their overall profitability. KBR has cleaned up their balance sheet by settling convertible notes and warrants and now sits at a healthy 2x net leverage. With the upcoming ramp of a $20B government services contract with the U.S. army, the company is well positioned to generate cash and return value to shareholders.”