We recently published a list of 12 Best Young Stocks To Buy and Hold For 10 Years. In this article, we are going to take a look at where Brightspring Health Services, Inc. (NASDAQ:BTSG) stands against other best young stocks to buy and hold for 10 years.
On January 29, Martín Escobari, the co-president and head of global growth equity at General Atlantic, joined CNBC’s ‘Fast Money’ to discuss the dealmaking and IPO outlook for 2025. He stated that they have been without an IPO market for three and a half years, the longest drought this century. The second longest was 18 months starting in March 2000 after the dotcom bubble. Martín Escobari mentioned that about 3000 companies are waiting to go public, which will create opportunities for growth equity due to pricing for private companies ready to go public but unable to access capital. Historically, he noted that three things are needed for the IPO market to open: at least 18 months of positive market performance, two years remaining, a low and relatively stable VIX, and a handful of IPOs to pop. He said that they bet that it will happen and the IPO market will be back roaring in 2025.
Regarding investor appetite, he expressed excitement about recent AI news and its impact. He noted that all of General Atlantic’s portfolio companies are using AI to cut costs and drive productivity, with a visible ROI. He believes that the next generation of AI is the application layer, with companies creating new services using AI models, proprietary data, and better software after five years of venture bets. He said that General Atlantic just made three major investments in AI and anticipates the next 2 or 3 years to be very exciting on the application layer. When asked about key metrics for companies going public, Escobari emphasized profitability as a key metric. He stated that they want companies going after vast markets, that are profitable, and whose profitability is defensible with a true competitive advantage, not just temporary profits from being a first mover. He believes investors want large markets and the defensibility of profits in addition to profits.
Methodology
We first used the Finviz stock screener to compile a list of the top stocks that went public in the last 3 years and had a 3-year compound annual growth rate of over 15%. We then selected the 12 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. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
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).
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Brightspring Health Services, Inc. (NASDAQ:BTSG)
3-Year CAGR as of February 11: 18.48%
Number of Hedge Fund Holders: 29
Brightspring Health Services, Inc. (NASDAQ:BTSG) provides home and community-based healthcare services in the US. Its platform delivers pharmacy and provider services, which include clinical and supportive care, to Medicare, Medicaid, and insured populations.
In Q3 2024, the company’s Pharmacy Solutions segment made $2.3 billion in revenue. This was a 35% jump compared to the same period in 2023. This growth comes from strong prescription volumes. The Infusion and Specialty business, within Pharmacy Solutions, saw revenue explode by 42% year-over-year. The home and community pharmacy business also performed well, with a 19% revenue increase. Overall, the Pharmacy Solutions segment processed 10.9 million prescriptions in Q3. This was a 15% increase year-over-year. Specialty prescriptions also saw a particularly large increase of 36%.
This performance was delivered by the company’s operational efficiency, effective sales and marketing, successful launches of new Limited Drug Distribution (LDD) therapies, and strategic acquisitions. Its LDD portfolio has grown to 123 therapies recently.
Overall, BTSG ranks 6th on our list of best young stocks to buy and hold for 10 years. While we acknowledge the growth potential of BTSG, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BTSG 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.
