In this article, we will discuss Aggressive Stock Portfolio: 12 Stocks Picked by Hedge Funds.
The broader market has dropped into correction territory, declining by over 10% from its peak in February and wiping $5 trillion in market value. Simultaneously, Reuters reported that the Nasdaq Composite is also undergoing a correction, reflecting a wider pullback in high-growth stocks. With unpredictable market trends, aggressive stock portfolios offer both positive and negative effects for growth investors. Investor confidence is highly dependent on trade pressures and inflation, with the Federal Reserve holding rates at 4.25-4.5% and predicting inflation to rise to 2.8%. Concurrently, trade tensions between the U.S. and China are worsening, while in India, the outflow of capital has surged. An estimated $29 billion of foreign investment has been pulled out of stocks in India since October. It is the biggest outflow in six months due to global investment volatility.
History proves that these market corrections, while having repercussions, also create some opportunities. As mentioned in Reuters, since 1929, the broader market has gone through 56 corrections, but only 22 turned into bear markets. These dips typically last 115 days and fall by 13.8%, much less than the 35.6% drops in bear markets. Gold prices went up 13% in 2025, driven by investors looking for stability, and U.S. Treasury yields have fallen as demand for safe assets increases. However, aggressive investors know that market swings can be a good time to buy growth stocks poised for a comeback.
For high-growth investors, it is challenging to maneuver this volatile market. Corrections of 7-10% are occurring more frequently now, yet major indices still find support, which indicates that market disruptions could be investment opportunities. Companies with strong market control, advantages in U.S.-based manufacturing, or innovative business models might be more efficient in these economic conditions. Similarly, sectors evolving through new tech, population shifts, or regulation shifts could offer significant gains for those staying poised in short-term ups and downs.
Sector rotation is becoming crucial in these market shifts, as Reuters reported that the ‘Magnificent Seven’ tech giants are facing challenges. The major EV company has dropped 33%, and the group is down 17% on average since February. This has shifted investors’ interest toward undervalued sectors with strong potential. Historically, aggressive stocks bounce back stronger after corrections as investors regain their risk appetite. Despite current disruptions, companies with solid base values, exposure to disruptive tech, and apt market strategies could see considerable gains as markets settle down.
While uncertain market conditions persist, history shows that downturns often lead to significant recoveries. Investors who plan smartly during these shifts might see gains as money flows between markets and policies evolve.
With these factors in mind, let’s look at the Aggressive Stock Portfolio: 12 Stocks Picked by Hedge Funds.
A senior executive looking up at a large boardroom filled with the stocks their company manages.
Our Methodology
To compile our list of the Aggressive Stock Portfolio: 12 Stocks Picked by Hedge Funds, we began by screening stocks with a minimum of 20% revenue growth over the past three years and strong EPS performance. From this pool, we identified the top 12 stocks with the highest revenue growth and strong hedge fund interest. Finally, we ranked these stocks in ascending order based on hedge fund sentiment as of Q4 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
12. Powell Industries, Inc. (NASDAQ:POWL)
3-Year Average Revenue Growth: 31.08%
Number of Hedge Fund Holders: 27
Powell Industries, Inc. (NASDAQ:POWL) creates, produces, and services custom electrical equipment for oil and gas, utilities, industrial, and commercial markets. It provides power control systems, switchgear, motor control centers, and field services for critical infrastructure in the U.S. and globally.
The company’s Q1 FY 2025 results were impressive, as revenue jumped 24% to $241 million year-over-year. Meanwhile, the oil and gas revenue grew by 14%, and utility and commercial segments increased by 26% and 80%, respectively. Net income shot up 44% to $35 million, or $2.86 per diluted share, with an EPS of $13.17 for the year. Driven by a key LNG project, new orders rose 36% to $269 million, while the company’s backlog hit $1.3 billion, up $48 million from last year.
Powell Industries, Inc. (NASDAQ:POWL) is progressing toward advances by growing its capacity. The company is currently upgrading facilities in Houston by adding a new electrical product factory, set to finish in mid-2025. While research and development costs are up 26%, Powell opened a satellite engineering office to grow the workforce and support long-term growth.
For 2025, Powell predicts strong results driven by demand in oil, gas, LNG, and data centers, while the utility sector remains crucial as electricity needs grow. With its solid backlog and market position, the company stands out as a top stock in our stock portfolio. The robust revenue and earnings of Powell Industries, Inc. (NASDAQ:POWL) have caught hedge funds’ attention.
11. Asbury Automotive Group, Inc. (NYSE:ABG)
3-Year Average Revenue Growth: 20.44%
Number of Hedge Fund Holders: 32
Asbury Automotive Group, Inc. (NYSE:ABG) administers car dealerships across the U.S., selling new and used vehicles. Its services also include fixing and repairing and offering financial products like extended warranties and leases. The company manages both its dealership network and Total Care Auto (TCA) division, serving retail customers, other dealers, and wholesale buyers.
Asbury Automotive Group, Inc. (NYSE:ABG) posted strong finances for Q4 2024, with revenue hitting $4.5 billion, an 18% increase from last year. The company made a record $750 million in gross profit, climbing 11% due to its Parts & Service segment growing 19% to $340 million. Yet gross margins dropped by 101 basis points to 16.6%, but net income was boosted to $129 million ($6.54 per share), compared to $56 million ($2.70 per share) in Q4 2023. Still, adjusted net income dipped 2% to $143 million. For the full year, revenue peaked at an all-time high of $17.2 billion, up 16%, though adjusted EBITDA dropped 13% to $982 million.
A significant move was when Asbury Automotive Group, Inc. (NYSE:ABG) bought back $74 million of its stock in Q4, showing faith in its financial sector. The company started to utilize new digital tools to boost online car sales, improve customer experience, and make operations efficient. Moreover, Asbury completed key acquisitions in growing markets, expanding its presence in the Southeast of the U.S., which may be significant for future revenue growth.
Looking forward, Asbury Automotive Group, Inc. (NYSE:ABG) expects used vehicle margins to face pressure driven by an increase in new car incentives. The company predicts inventory challenges in 2025 but stays focused on cutting costs and ranks among the stocks for our stock portfolio. It also plans to invest more in its digital sales platform and streamline operations to maintain profits. Simultaneously, Asbury is looking to buy more dealerships while sticking to its careful expenditure plan.
10. InterDigital, Inc. (NASDAQ:IDCC)
3-Year Average Revenue Growth: 26.86%
Number of Hedge Fund Holders: 34
InterDigital, Inc. (NASDAQ:IDCC) is an R&D company focused on wireless communications, AI, and video tech globally. It produces and licenses key technologies for 5G, 6G, IoT, and consumer electronics that enable connectivity across multiple industries. As the company’s patented innovations are used in phones, tablets, smart homes, self-driving cars, and cloud services, it has established itself as a key player in digital infrastructure.
InterDigital, Inc. (NASDAQ:IDCC) had an excellent performance in 2024, with revenue jumping 60% to $869 million, year-over-year, all thanks to licensing deals with Oppo, ZTE, and Google. In Q4, revenue rose 140% to $253 million, including $136 million in catch-up revenue. Full-year earnings per share grew 62% to $14.97 from $9.23 in 2023, demonstrating firm revenue growth and a better adjusted EBITDA margin of 63%.
InterDigital, Inc. (NASDAQ:IDCC) had significant growth in 2024, signing 14 new licensing agreements that brought the company’s total contract value above $3.3 billion since 2021. Moreover, InterDigital reduced its dependence on smartphones and diversified its consumer electronics and IoT, which make up over 30% of the company’s revenue. Its patent portfolio grew beyond 33,000, with 5,000 new global filings simultaneously protecting its tech, taking legal action against Disney+ and other streaming platforms for patent infringement.
For 2025, InterDigital, Inc. (NASDAQ:IDCC) expects revenue between $660 million and $760 million. Its main strategy is to focus on licensing smartphone makers who aren’t yet customers and breaking into emerging markets like video streaming. The company boosted cash flow by boosting dividends by 33% to $0.60 per share and authorized $230 million in share buybacks. With impressive revenue growth, expanding licensing deals, and an efficient market strategy, InterDigital, Inc. (NASDAQ:IDCC) stands out as a top pick for a stock portfolio with solid finances and long-term potential.
