We recently compiled a list of the 15 Best Growth Stocks to Buy for the Next 5 Years. In this article, we are going to take a look at where ADMA Biologics Inc. (NASDAQ:ADMA) stands against the other growth stocks.
Kevin Mahn, President & CIO at Hennion & Walsh Asset Management, recently appeared on CNBC on January 6 to discuss the current market momentum and emphasize the need for investors to be selective in 2025 to find growth opportunities. He highlighted that while the MAG7 have led the market recently, their leadership may not continue. Mahn referenced historical data, noting that since 1950, there have been nine instances where the market rallied by 20% or more, with the market rising in eight of those cases. However, he pointed out that gains in the following year averaged only 3.6%, indicating a need for careful selection. He also acknowledged recent market trends, including a decline in the S&P 500’s performance and a potential shift in investor sentiment following events like the Santa Claus Rally.
He predicted a path of lower interest rates, expecting 50 basis points of cuts this year instead of the previously anticipated 100 basis points. Mahn suggested that this environment would create favorable conditions for stocks and bonds but urged investors to diversify beyond mega-cap tech stocks into sectors like biotech and aerospace. Earlier on January 3 as well, Mahn noted that after two consecutive years of gains, a third year of strong performance appears unlikely. He remarked that it seems the Grinch got in the way of the Santa Claus rally this year.
He also addressed concerns from investors tempted to time the market or sell their holdings. He warned against trying to time the market, describing it as often futile. Instead, he advocated for rebalancing portfolios to align with long-term goals and risk tolerance. He suggested that the economic landscape is changing, with lower interest rates and stagnant economic growth expected moving forward. Mahn advised investors to take profits from sectors that previously led the market and consider reallocating those funds into different areas poised for future growth. He highlighted biotech as a promising sector, noting bipartisan agreement on the need to lower drug prices. This shift could lead large-cap pharmaceutical companies to seek new revenue sources, making smaller biotech firms attractive.
Methodology
We first sifted through online rankings, and internet lists to compile a list of the top growth stocks to buy for the next 5 years. We then selected the stocks with high 5-year revenue growth and high analysts’ upside potential. From those we picked 15 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q3 2024.
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).
An independent distributor in their pharmacy with a range of biopharmaceutical products on display.
ADMA Biologics Inc. (NASDAQ:ADMA)
Number of Hedge Fund Holders: 25
5-Year Revenue CAGR: 78.09%
Upside Potential as of January 15: 50.06%
ADMA Biologics Inc. (NASDAQ:ADMA) is a biopharmaceutical company that develops and commercializes specialty plasma-derived biologics. These are medicines created from human plasma that target specific medical conditions. Using its expertise in immunology, the company has brought three products to the market, providing innovative treatments for patients with infectious diseases and compromised immune systems.
The company achieved a revenue of $119.8 million in Q3 2024, a 78% year-over-year increase, driven by its commercialization efforts. This translated to a net income of $35.9 million, a substantial 1,300% surge compared to the year-ago period. These results led the company to raise its full-year guidance for revenue and net income. Mizuho Securities analyst Anthony Petrone recently maintained a Buy rating on ADMA Biologics Inc. (NASDAQ:ADMA), citing these earnings.
This growth is driven by ASCENIV, which is a treatment for primary immunodeficiency (PI) patients. The company has adjusted its production schedule to boost ASCENIV output for accelerated earnings growth. To support this trajectory, it has implemented several initiatives, including donor retention programs to enhance high-titer plasma collections and partnerships with third-party plasma collectors. ADMA Biologics Inc. (NASDAQ:ADMA) forecasts significant revenue opportunities for ASCENIV, projecting it to become a billion-dollar product by the 2030s.
Overall ADMA ranks 14th on our list of the best growth stocks to buy for the next 5 years. As we acknowledge the growth potential of ADMA as an investment, 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 ADMA 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.
Disclosure: None. This article is originally published at Insider Monkey.