We recently published a list of 12 Best Multibagger Stocks to Buy in 2025. In this article, we are going to take a look at where CommScope Holding Company, Inc. (NASDAQ:COMM) stands against other best multibagger stocks to buy in 2025.
In the world of investing, the term “multibagger” refers to stocks that have the potential to deliver returns several times greater than the original investment. One key factor that can help identify potential multibaggers is momentum. Momentum investing focuses on capitalizing on the continuation of existing market trends. Investors using this strategy look for stocks that are experiencing upward price movements, often driven by strong earnings reports, positive news, industry tailwinds, or overall market sentiment. The idea is simple: “the trend is your friend,” and momentum can be a powerful force in identifying winners before they peak. The importance of momentum has been recognized by famous investors, but many of them emphasized the idea that it is crucial to catch momentum stocks early on. As Warren Buffett put it – “What the wise do in the beginning, fools do in the end”.
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The US market is close to entering a correction mode as the absolute magnitude of decline since the mid-February peak is approaching 10%. The current policies of the new US administration, such as tariffs, federal jobs cuts and cuts in some large-scale public projects, are causing havoc among investors as many are fearing a scenario in which the US economy enters stagflation – a period of high inflation among weak economic growth and unemployment. Some analysts have pointed out that sectors reliant on government contracts, such as infrastructure and defense, are already experiencing heightened volatility as a result of these policy shifts. In a recent interview with Maria Bartiromo on Fox News, the President himself refused to rule out a recession in the current year and claimed that the economy is in “a period of transition” and that tariffs might fuel inflation at some point. With consumer confidence showing early signs of weakening, as signaled by recent business surveys, some economists argue that the Federal Reserve may be forced to intervene sooner than expected to stabilize the markets. This idea was already supported by the President, who at some point expressed the opinion that interest rates in the US economy are higher than they should be.
The aforementioned developments have caused a market selloff, particularly in previously high-momentum stocks such as the Magnificent 8, which have benefited from the AI megatrend and were responsible for most of the market returns last year. Prior to that, many previously well-performing stocks, such as government contractors, had already lost their momentum following the election results, while some of the few well-performing healthcare stocks were hit by Medicare/Medicaid reimbursement threats. Likewise, the energy sector remained somewhat out of favor – despite volume tailwinds from Trump 2.0, the expectation of lower oil prices amid a weaker economy has put downward pressure on stock prices in the sector. The key takeaway for investors is that one should look for multibaggers that haven’t yet lost their momentum during the market dip in the last month. These are often lower-capitalization companies that are underfollowed by analysts and operate in high-growth markets.
Our Methodology
To compile our list of multibagger stocks, we used Finviz to filter the companies that have delivered at least 200% stock price return in the last twelve months. Then we compare the list with our proprietary database of hedge funds ownership as of Q4 2024 and include in the article the top 12 names with the highest number of hedge funds that own the stock.
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).
Aerial shot of a communications tower, emphasizing the company’s infrastructure networks.
CommScope Holding Company, Inc. (NASDAQ:COMM)
Number of Hedge Fund Holders: 32
Stock Price Return in the last twelve months: 248%
CommScope Holding Company, Inc. (NASDAQ:COMM) is a global network infrastructure provider that designs and manufactures communication solutions for wired and wireless networks. Its product portfolio includes fiber optic and copper cabling, antennas, broadband access solutions, and enterprise networking equipment. The company serves telecommunications providers, data centers, enterprises, and government entities, supporting broadband, 5G, and indoor and outdoor connectivity. COMM operates worldwide, delivering networking solutions that enable high-speed data transmission and communications infrastructure.
CommScope Holding Company, Inc. (NASDAQ:COMM) delivered strong Q4 results with core net sales of $1.17 billion, representing a 27% YoY increase, and core adjusted EBITDA of $240 million, showing a 69% YoY increase. The company achieved one of its highest core adjusted EBITDA margins since the ARRIS acquisition at 20.6%. For the full year 2024, COMM delivered net sales of $4.21 billion, though this represented an 8% decrease from the prior year. Looking ahead to 2025, the company projects core adjusted EBITDA in the range of $1.0 billion to $1.05 billion. The company significantly improved its financial position by completing a debt refinancing and selling its OWN and DAS businesses to Amphenol for $2.1 billion, using the proceeds to repay approximately $2 billion of debt.
The data center business of CommScope Holding Company, Inc. (NASDAQ:COMM) showed particularly strong performance, with the enterprise fiber business growing 73% in 2024 and representing 22% of CCS revenue. Third-party market analysis indicates 30-plus percent annual revenue growth expected over the next few years in the data center business. The company is investing in new capacity expansion that will deliver an additional $300 million of revenue at full capacity. In the ANS segment, meaningful shipments of FDX nodes to Comcast began in Q4, with expectations for significant ramp-up in 2025, marking the beginning of a multiyear upgrade cycle. With a stock price return of 248% in the last twelve months, COMM is one of the best multibagger stocks to buy in 2025.
Overall, COMM ranks 5th on our list of best multibagger stocks to buy in 2025. While we acknowledge the potential of COMM as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than COMM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.