13 Stocks to Buy with Exponential Growth

Published on October 14, 2023 at 1:15 pm by Fahad Saleem in Hedge Funds, News

In this article, we will take a look at the 13 stocks to buy with exponential growth. To see more such companies, go directly to 5 Stocks to Buy with Exponential Growth.

Optimism was prevailing in the US stock market on October 11 as investors were hopeful that the Federal Reserve won’t take a hawkish stance for the rest of the year amid rising bond yields that are already tightening the credit conditions in the country. However, latest meeting minutes revealed that the Fed would be open to at least one more interest rate hike. While investors believe the market could end the year on a positive note, 2024 won’t be easy. A detailed market outlook report by Allianz says that the real effects of the Fed’s tightening would be visible next year. The report said that the United States will see GDP growth of just 1.1% in 2024, the slowest rate since 2009. In 2025, the country is expected to see GDP growth rate of 1.7%. The report said:

“Cumulative real wage increases in 2024-25 will not be enough to offset 2022 losses, which should keep wage-price spiral worries under control. Profitability is being squeezed while companies’ cash buffers reduce fast. The most fragile are feeling the pinch of higher interest rates and lower funding availability; more and more corporates, notably in Europe, will need to prepare for the wall of post-Covid debt repayments coming in late 2024-25. The normalization in credit risk is on track as expected and should remain so as we would need to see growth figures almost double to see a stabilization in insolvencies on both sides of the Atlantic. The rise in business insolvencies is broad-based across sectors and countries – with few exceptions in emerging markets (e.g. Russia, China).”

Photo by Ruben Sukatendel on Unsplash

Methodology

For this article we first used a stock screener to identify companies that have posted over 25% sales growth over the past five years and over 30% sales growth on a quarter-over-quarter basis in the most recent quarter. From the resultant dataset we picked the stocks with the highest sales growth over the past five years. We then further filtered this dataset and picked 13 stocks with the highest number of hedge fund investors. Therefore, the stocks listed in this article are the best stocks to buy with exponential growth according to smart money investors.

Stocks to Buy with Exponential Growth

13. Roivant Sciences Ltd. (NASDAQ:ROIV)

Average Sales Growth Over the Past 5 Years: 571%

Commercial-stage biopharma company Roivant Sciences Ltd. (NASDAQ:ROIV) ranks 13th in our list of the stocks to buy with exponential growth according to hedge funds. As of the end of the second quarter of 2023, 46 hedge funds out of the 910 funds tracked by Insider Monkey reported having stakes in Roivant Sciences Ltd. (NASDAQ:ROIV). The biggest stakeholder of Roivant Sciences Ltd. (NASDAQ:ROIV) was Daniel Gold’s QVT Financial which owns a $1.24 billion stake in the company.

In August Roivant Sciences Ltd. (NASDAQ:ROIV) posted fiscal first quarter results. Revenue in the period jumped about 400% year over year.

12. Axonics, Inc. (NASDAQ:AXNX)

Average Sales Growth Over the Past 5 Years: 625%

Axonics, Inc. (NASDAQ:AXNX) is a medical device company that sells products related to the treatment of bladder and bowel dysfunction. Its sacral neuromodulation (SNM) systems are used to treat patients with overactive bladder (OAB).

As of the end of the second quarter of 2023, 31 hedge funds tracked by Insider Monkey had stakes in Axonics, Inc. (NASDAQ:AXNX). The biggest stakeholder of Axonics, Inc. (NASDAQ:AXNX) was Alec Litowitz and Ross Laser’s Magnetar Capital which owns a $49 million stake in the company.

Baron Discovery Fund made the following comment about Axonics, Inc. (NASDAQ:AXNX) in its Q1 2023 investor letter:

“Axonics, Inc. (NASDAQ:AXNX) offers a novel implantable sacral neuromodulation device for the treatment of urinary and bowel dysfunction. Through an acquisition, it also offers Bulkamid, a unique injectable product to treat stress urinary incontinence (SUI) in women. Shares declined somewhat during the quarter. There wasn’t any particular negative catalyst. We retain conviction as Axonics’ product is unique and its current revenue run rate of $650 million to $700 million, represents less than 1% penetration of its addressable market (45,000 current procedures versus a market with close to 7 million addressable patients). Axonics thinks the implantable neuromodulation market can double in three to five years. Bulkamid has a current addressable market of $125 million, representing the 125,000 implantable sling procedures done every year in the U.S. However, with 29 million women affected by SUI, the market could be worth many multiples of that level, particularly as Bulkamid is a 15 minute in-office procedure with almost no side effects. We believe that this is realistic, given that the product’s current run rate already represents about half of the currently addressable market.”

11. TG Therapeutics, Inc. (NASDAQ:TGTX)

Average Sales Growth Over the Past 5 Years: 848%

TG Therapeutics, Inc. (NASDAQ:TGTX) shares have gained about 38% year to date through October 11. In August TG Therapeutics, Inc. (NASDAQ:TGTX) jumped after it was revealed that the company’s CEO Michael Weiss bought company shares worth $1 million. Analysts are excited about TG Therapeutics, Inc. (NASDAQ:TGTX)’s drug for multiple sclerosis, Briumvi. TG Therapeutics, Inc. (NASDAQ:TGTX) talked in detail about the drug, its guidance and future plans in Q2 earnings call:

“All told, we ended the second quarter with approximately $145 million in cash. And when accounting for the $140 million upfront payment, I have a current pro forma cash balance of approximately $285 million. We believe our current capital when coupled with modest Briumvi revenue assumptions, will take us out into the foreseeable future without the need to raise incremental capital. Turning to some of the other key financial metrics for the quarter. First, as Adam previously reported, we are pleased to announce $16 million in Briumvi net sales in our first full quarter since launch, representing 100% growth over the first quarter of 2023 and $23.8 million in cumulative net sales since launch. As for our broader financial results, our net loss for the second quarter of 2023 excluding noncash items, was approximately $35.1 million, roughly in line with the first quarter of 2023, where we saw a net loss of $32.4 million when excluding noncash items.”

Read the full earnings call transcript here.

Out of the 910 hedge funds tracked by Insider Monkey, 26 hedge funds reported owning a stake in TG Therapeutics, Inc. (NASDAQ:TGTX). The biggest stakeholder of TG Therapeutics, Inc. (NASDAQ:TGTX) during this period was Abhishek Trehan’s Darwin Global Management which owns a $230 million stake in TG Therapeutics, Inc. (NASDAQ:TGTX).

10. Li Auto Inc. (NASDAQ:LI)

Average Sales Growth Over the Past 5 Years: 873%

Chinese EV company Li Auto Inc. (NASDAQ:LI) ranks 10th in our list of the best stocks with exponential growth to buy according to hedge funds. Li Auto Inc. (NASDAQ:LI) has gained about 77% year to date through October 11. In September, Li Auto Inc. (NASDAQ:LI) delivered 36,060 cars, a whopping 212.7% year-over-year increase and a new monthly record.

A total of 25 hedge funds out of the 910 hedge funds tracked by Insider Monkey reported having stakes in Li Auto Inc. (NASDAQ:LI). The biggest stakeholder of Li Auto Inc. (NASDAQ:LI) during this period was John Overdeck and David Siegel’s Two Sigma Advisors which had a $129 million stake in Li Auto Inc. (NASDAQ:LI).

In its latest earnings call, Li Auto Inc. (NASDAQ:LI) talked about its guidance and the use of AI in is operations.

“For Q4, with increased production capacity, we’ll be able to reach or surpass the 40,000 per month mark. And another important point to note is we’re very confident that we will be able to challenge the leadership position of Mercedes, BMW and Audi in China, meaning that we’ll exceed their sales in China and become the top selling luxury brand in China. Second question on Mind GPT, in terms of technology, we released our internal big model Mind GPT. And we have built — since built a full stack in-house development capability of large language models.

And the R&D really falls into four areas: first is data; and second is, big model training algorithms; and third is assessment and security; and lastly, application deliveries. On the training algorithm front, we’ve stated in line with mainstream algorithms in the industry, including the foundational model training, which utilizes 1.3 billion tokens, and to command, fine tuning and reinforce learning. And in order to make sure that the Mind GPT model can have accurate knowledge and be able to personalize based on the users, we’ve also introduced search and recommendation algorithms, which are also built in-house. Mind GPT is now in version one, which uses 16 billion parameters, and based on the foundation model, we can better suit the user scenarios of our users and to make Li Xiang Tong Xue more interactive with our users.”

On the product front, the big model-based Mind GPT is really going to — is going to power our first-generation multimodal human machine interface operating system. And it can allow…. [read the full earnings call transcript here].

9. Rivian Automotive, Inc. (NASDAQ:RIVN)

Average Sales Growth Over the Past 5 Years: 971%

EV company Rivian Automotive, Inc. (NASDAQ:RIVN) has seen a 16% rise in its stock year to date through October 11.

As of the end of the second quarter of 2023, 37 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Rivian Automotive, Inc. (NASDAQ:RIVN). The most significant stakeholder of Rivian Automotive, Inc. (NASDAQ:RIVN) was Daniel Sundheim’s D1 Capital Partners which owns a $232 million stake in the company.

Baron Fifth Avenue Growth Fund made the following comment about Rivian Automotive, Inc. (NASDAQ:RIVN) in its second quarter 2023 investor letter:

“During the second quarter, we also added to our position in EV manufacturer Rivian Automotive, Inc. (NASDAQ:RIVN). After a complex period since the company’s IPO, in which Rivian tried to ramp multiple vehicles simultaneously while struggling to overcome unprecedented supply-chain bottlenecks, the company seems to have turned the corner. Production is now starting to scale up, which should help the company improve its plant utilization and subsequently help gross margins. The company is making notable progress in cost improvements by renegotiating with its suppliers, utilizing its larger scale to get better pricing, as well as, incorporating various technological advancements that would improve its cost structure while also improving the vehicles’ performance (for example it’s Enduro drive unit which is progressing ahead of plan).”

8. Revance Therapeutics, Inc. (NASDAQ:RVNC)

Average Sales Growth Over the Past 5 Years: 1064%

Revance Therapeutics, Inc. (NASDAQ:RVNC) is one of the stocks with exponential growth. In August Revance Therapeutics, Inc. (NASDAQ:RVNC) jumped after the company said the FDA expanded the label for its lead product, Daxxify, to include adult patients with the neck disorder cervical dystonia.

As of the end of the second quarter of 2023, 27 hedge funds out of the 910 hedge funds tracked by Insider Monkey reported owning stakes in Revance Therapeutics, Inc. (NASDAQ:RVNC). The biggest stakeholder of Revance Therapeutics, Inc. (NASDAQ:RVNC) during this period was William Leland Edwards’s Palo Alto Investors which owns a $133 million stake in the company.

Baron Discovery Fund made the following comment about Revance Therapeutics, Inc. (NASDAQ:RVNC) in its second quarter 2023 investor letter:

“Shares of Revance Therapeutics, Inc. (NASDAQ:RVNC), an aesthetics-forward biotechnology company, declined in the quarter. Revance sells facial injectables and in December 2022 started a soft launch preview program for Daxxify, the company’s longer-acting competitor to Botox. Daxxify lasts for six months on average compared to Botox’s three to four months. Shares rose sharply in the prior quarter on strong early orders of Daxxify, and shares gave back some gains likely due to profit-taking. Revance is now expanding the launch and training additional injectors. Early feedback has been positive regarding Daxxify’s longer duration, faster onset-of-action, and natural aesthetic result. Shares are in a news vacuum as investors parse this qualitative feedback and await a better understanding of practice ordering patterns and more concrete revenue growth. We think Daxxify’s longer[1]lasting injectable is a key selling point, and we expect to see meaningful uptake in the back half of 2023 and beyond. Ultimately, we see Daxxify and the already-launched RHA fillers capturing significant share in the fast-growing $4 billion-plus facial injectables market and supporting a double of the current valuation.”

7. Zai Lab Limited (NASDAQ:ZLAB)

Average Sales Growth Over the Past 5 Years: 2090%

China-based Zai Lab Limited (NASDAQ:ZLAB) makes treatments for oncology, infectious diseases and neuroscience. Zai Lab Limited (NASDAQ:ZLAB) distributes four drugs in China. These drugs are also approved in the US. These include niraparib for ovarian cancer, ripretinib, Optune and antibiotic omadacycline.

As of the end of the second quarter of 2023, 23 hedge funds tracked by Insider Monkey had stakes in Zai Lab Limited (NASDAQ:ZLAB). The biggest stakeholder of Zai Lab Limited (NASDAQ:ZLAB) was Andreas Halvorsen’s Viking Global which owns a $73 million stake in the company.

6. Aurinia Pharmaceuticals Inc. (NASDAQ:AUPH)

Average Sales Growth Over the Past 5 Years: 3164%

Aurinia Pharmaceuticals Inc. (NASDAQ:AUPH) ranks 6th in our list of the best stocks with exponential growth according to hedge funds. In September Aurinia Pharmaceuticals Inc. (NASDAQ:AUPH) reached an agreement with major shareholder and investment management firm, MKT Capital Ltd. As part of the agreement Aurinia Pharmaceuticals Inc. (NASDAQ:AUPH) appointed Dr. Robert Foster as a new board member.

Insider Monkey’s database of 910 hedge funds shows that 24 hedge funds reported owning stakes in Aurinia Pharmaceuticals Inc. (NASDAQ:AUPH). The biggest stakeholder of Aurinia Pharmaceuticals Inc. (NASDAQ:AUPH) during this period was Steven Boyd’s Armistice Capital which owns a $45 million stake in the company.

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