In this article, we will take a detailed look at the 11 Hyper-Growth Stocks Billionaires Are Loading Up On. For a quick overview of such stocks, read our article 5 Hyper-Growth Stocks Billionaires Are Loading Up On.
Growth stocks have rewarded investors over the past several years, thanks to the hyper growth and mind-numbing expansion of technology companies like Amazon.com Inc (NASDAQ:AMZN), NVIDIA Corp (NASDAQ:NVDA) and Apple Inc (NASDAQ:AAPL). Data from the CFA Institute showed that since the end of the financial crisis, growth stocks outperformed value stocks by 144% through June 2018. The study highlighted that this massive outperformance was not a “fluke” since most of the growth stocks studied were trading at decent valuation multiples during 2009 and they also saw earnings growth during the period which was analyzed in the study.
In theory, growth stocks tend to underperform during a high interest rate environment when investors turn to realistic valuations and move away from risky assets. But what happened last year was the opposite of this. That means Mr. Market really cares about AI and the impact it is creating. That’s why investors are still happy to buy technology stocks trading at higher multiples. Many analysts believe we are going through the beginning of the AI revolution and the AI products and services mega-cap technology companies like Amazon.com Inc (NASDAQ:AMZN), NVIDIA Corp (NASDAQ:NVDA) and Apple Inc (NASDAQ:AAPL) are making will have far-reaching consequences on human progress.
Can Growth Stocks Continue to Outperform in 2024?
Financial markets defied all expectations last year and avoided the much-feared recession. But will the AI-related euphoria and economic resilience help the stock market this year? UBS said in its 2024 market outlook report that it would be “historically unusual” if the US economy ends up avoiding recession after the rate hikes of 2022 and 2023. But the report said there is a reason for optimism this time as UBS expects no significant economic contraction in 2024 even though it sees a slowdown in growth.
Should You Invest in Quality Stocks with Higher Multiples?
In this environment, UBS recommended investors to pile into quality stocks. The firm said quality stocks can have higher valuations on a relative basis but it said quality stocks would be worth paying for this year.
“Quality stocks have historically outperformed in the late stages of the business cycle, including in periods of economic contraction, which should offer portfolio protection if the economy slows more than we expect. The quality tilt also aligns with our preference for US technology companies, which should be among the key beneficiaries of AI-related demand for both hardware and software. Quality stocks typically have higher valuations than the overall index, but we think that quality is worth paying for in 2024. Investors can find quality stocks within US tech; stable quality-income and high-quality cyclical stocks in Europe; and in select names in Asia.”
Israel Englander of Millennium Management
Methodology
In this backdrop, we decided to see which stocks with extreme revenue growth are on the radar of billionaire investors. For this article we first used a stock screener to identify stocks with EPS growth of over 30% over the past five years, sales growth of over 25% over the past five years and quarter-over-quarter sales growth of over 25% posted in the most recent quarters. From these stocks we selected 11 stocks with the highest number of billionaire investors. To find the number of billionaire investors for these stocks we used Insider Monkey’s proprietary database of billionaire investors and their stock holdings. Why care about billionaires and hedge fund managers? Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
11. Sunshine Biopharma Inc (NASDAQ:SBFM)
Number of Billionaire Investors: 1
Sunshine Biopharma Inc (NASDAQ:SBFM) ranks 11th in our list of the hyper-growth stocks billionaires are loading up on. In November Sunshine Biopharma Inc (NASDAQ:SBFM) posted third quarter results. GAAP EPS in the period came in at -$0.04. Revenue in the quarter totaled $5.96 million.
10. Agile Therapeutics Inc (NASDAQ:AGRX)
Number of Billionaire Investors: 1
Agile Therapeutics Inc (NASDAQ:AGRX) makes contraceptive products. Agile Therapeutics Inc (NASDAQ:AGRX) posted third quarter results in November. Total revenue in the third quarter came in at $6.7 million, an increase of 122% from the year-ago period. Adjusted EPS in the quarter came in at -$1.47, beating estimates by $0.37.
One billionaire in Insider Monkey’s database of billionaires had stakes in Agile Therapeutics Inc (NASDAQ:AGRX) as of the end of the third quarter of 2023. Billionaire Ken Griffin’s Citadel Investment Group is a shareholder in Agile Therapeutics Inc (NASDAQ:AGRX).
The company talked in detail about its financial performance during Q3 earnings call in November:
“In the past year, we’ve seen consistent quarter-over-quarter improvements across all of our key performance areas, and we believe there is room for additional growth both in the fourth quarter of 2023 as well as into the first quarter of 2024. I’ll now get into some of the details of our third quarter 2023 performance that supports our confidence in achieving our 2023 net revenue goal and generating positive cash flow from operations in the first quarter of 2024. Net revenue, third quarter 2023, net revenue was $6.7 million, which represents a 21% increase from the second quarter of 2023. The continued increase in net revenue was primarily driven by our ability to once again accelerate Twirla demand across both the retail and non-retail channels.
Twirla demand for the third quarter 2023 was 74,325 total cycles a 33% increase from the second quarter of 2023, a new single quarter record. Retail demand as reported by Symphony was 40,196 total cycles, a 13% increase from the second quarter of 2023, also a single quarter record. Non-retail demand was 34,129 total cycles, a 71% increase from the second quarter of 2023.”
Read the entire earnings call transcript here.
9. Spero Therapeutics Inc (NASDAQ:SPRO)
Number of Billionaire Investors: 2
Massachusetts-based Spero Therapeutics Inc (NASDAQ:SPRO) ranks ninth in our list of the hyper-growth stocks to buy according to billionaires.
During the third quarter, Spero Therapeutics Inc’s (NASDAQ:SPRO) revenue jumped about 1175% on a year over year basis.
Two billionaires in Insider Monkey’s billionaires database had stakes in Spero Therapeutics Inc (NASDAQ:SPRO). Billionaires Israel Englander and Jim Simons had stakes in Spero Therapeutics Inc (NASDAQ:SPRO) through their hedge funds.
The company’s management talked about important business updates and its cash position during Q3 earnings call in November 2023:
Spero is well capitalized with a strong financial position of $93.8 million in cash and cash equivalents as of September 30, 2023. This includes the $30 million milestone we announced on our last earnings call, which has now been received as part of the Tebipenem HBr License Agreement with GSK. We believe that our cash and cash equivalents will be sufficient to fund the company into the second half of 2025. We reported total third quarter revenues of $25.5 million compared with revenues of $2 million in the third quarter of 2022, a $23.5 million increase compared to the prior year period that was primarily a result of the $23.2 million of collaboration revenue related to the license agreement with GSK.
Current revenue was $2.1 million in the third quarter of 2023 compared to $0.9 million in the same period in 2022. Research and development expenses for the third quarter of 2023 were $16.4 million compared with $7.4 million in research and development expenses for the same period in 2022. This $9 million year-over-year increase was primarily due to higher direct costs related to the Tebipenem HBr and SPR720 programs. These included increased clinical activity related to our ongoing Phase 2a trial of SBR720, as well as startup clinical activities and increased preclinical activities related to the planned Phase 3 trial of Tebipenem HBr. General and administrative expenses for the third quarter of 2023 of $5.7 million were lower than the $6.6 million reported in the same period in 2022.
Read the entire earnings call transcript here.
8. Nutex Health Inc (NASDAQ:NUTX)
Number of Billionaire Investors: 2
Texas-based Nutex Health Inc (NASDAQ:NUTX) operates a network of micro-hospitals. During the third quarter of 2023 Nutex Health Inc’s (NASDAQ:NUTX) revenue came in at $62.7 million, a significant rise from $28.4 million posted in the third quarter of 2022.
Insider Monkey’s database of billionaires shows that two billionaires had stakes in Nutex Health Inc (NASDAQ:NUTX) as of the end of the third quarter of 2023.
7. Camber Energy Inc (NYSE:CEI)
Number of Billionaire Investors: 2
Energy and power solutions company Camber Energy Inc (NYSE:CEI) ranks seventh in our list of the hyper-growth stocks billionaires are buying. In November Camber Energy Inc (NYSE:CEI) posted third quarter results. Revenue jumped about 64.4% on a year over year basis to $10.13 million.
As of the end of the third quarter of 2023, two billionaires in Insider Monkey’s database had stakes in Camber Energy Inc (NYSE:CEI).
6. Freedom Holding Corp (NASDAQ:FRHC)
Number of Billionaire Investors: 3
Investment conglomerate Freedom Holding Corp (NASDAQ:FRHC) ranks sixth in our list of the best hyper-growth stocks to buy according to billionaire investors. During the third quarter of 2023, Freedom Holding Corp’s (NASDAQ:FRHC) revenue increased by about 141% year over year to $435 million. Net income in the period jumped about 134% year over year to $115 million. In addition to Amazon.com Inc (NASDAQ:AMZN), NVIDIA Corp (NASDAQ:NVDA) and Apple Inc (NASDAQ:AAPL), billionaires are also buying small companies like Freedom Holding.
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Disclosure. None. 11 Hyper-Growth Stocks Billionaires Are Loading Up On was initially published on Insider Monkey.
