We recently published a list of 10 Best Stocks That Will Always Grow. In this article, we are going to take a look at where – stands against other best stocks that will always grow.
The Looming Risk of a Recession in the US
Threats of an impending recession are looming over the stock market due to Trump’s tariffs and macroeconomic uncertainty. According to CNBC’s quarterly CFO Council Survey for Q1 2025, a majority of chief financial officers are of the opinion that the economy is likely to fall into a recession in H2 2025. The CFOs said that they were generally “pessimistic” about the overall state of the American economy, and expressed uncertainty about the stock market.
The survey also showed that 95% of the CFOs claimed that their ability to make business decisions is being affected by policy, and a significant number said that although the Trump administration is “delivering on promises,” the government’s dealing with such matters is proving disruptive, extreme, and too chaotic. This is causing considerable difficulty to businesses looking to effectively navigate the present challenges. Therefore, around 60% of the CFOs opined that they expect a recession to materialize in H2 2025; another 15% said that it may appear in 2026.
CNBC reported on April 16 that Fed Chair Jerome Powell announced the day before that the central bank may be caught at the crossroads of supporting economic growth and controlling inflation. He said that although he anticipates lower growth and increased inflation, it is uncertain where the Fed will need to focus its attention. In prepared remarks before the Economic Club of Chicago, he said:
“We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension. If that were to occur, we would consider how far the economy is from each goal, and the potentially different time horizons over which those respective gaps would be anticipated to close.”
Powell also did not give any indication of where interest rates could be headed, but remarked that:
“For the time being, we are well positioned to wait for greater clarity before considering any adjustments to our policy stance.”
READ ALSO: 15 Best Blue Chip Stocks to Buy According to Billionaires and 11 Best Retail Stocks to Buy Right Now.
Are the Stagflation Risks Real?
On April 17, Joyce Chang, JPMorgan chair of global research, appeared on CNBC’s ‘Closing Bell Overtime’ to talk about Powell’s latest comments and the looming risk of recession. She was of the opinion that the risk of the recession is hovering over the stock market even with Trump’s 90-day tariff delays at around 60%.
Chang said that PCE inflation is coming towards 4% over the next year, with growth flat at the end of the year. While a recession is not imminent, as some of the hard data is still looking relatively healthy, with higher inflation, flat growth, and still very high fiscal deficits, one has to highlight that the stagflation risks are very real. The uncertainty would continue and is highly unlikely to be over after 90 days.
Since current and future market conditions reflect volatility and uncertainty, let’s examine the 10 best stocks that might always grow, even in an economic downturn.
Our Methodology
We sifted through stock screeners, financial media reports, and ETFs to compile a list of 20 recession-proof stocks with a 10-year revenue growth rate of 8%-15% and chose the top 10 most popular among hedge funds as of Q4 2024. The list is ordered in ascending order of hedge fund sentiment. We sourced the hedge fund sentiment data from Insider Monkey’s database.
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).
A row of shelves in a retail pharmacy, demonstrating the variety of drugs and over-the-counter products.
CVS Health Corporation (NYSE:CVS)
Number of Hedge Fund Holders: 74
CVS Health Corporation (NYSE:CVS) is a health solutions company that operates in four segments: healthcare benefits, health services, pharmacy & consumer wellness, and corporate/other. Apart from being a prominent pharmacy chain, the company is one of the largest health insurers in the United States through its Aetna subsidiary’s operations, ranking it eighth on our list of the top stocks that will always grow.
On April 15, Morgan Stanley raised the firm’s price target on CVS Health Corporation (NYSE:CVS) to $80 from $68, keeping an Overweight rating on the shares. Baird also raised the company’s price target to $71 from $51 on the same day, keeping a Neutral rating on the shares.
The company recently conducted key management changes, which may be acting as a catalyst for the stock. Based on year-to-date results through February, CVS Health Corporation (NYSE:CVS) announced that it anticipates financial results to meet or exceed the guidance it previously issued for 2025. Its total revenue for fiscal Q4 2024 also increased to $97.7 billion, reflecting a 4.2% growth compared to the prior year and bringing optimism to its operations. The ongoing changes in the company’s management and operations are thus expected to bring it back on track.
Patient Capital Management also expressed bullish sentiments on the stock, saying that CVS Health Corporation (NYSE:CVS) has a diverse and attractive asset combination, including a pharmacy-benefits manager, healthcare benefits business, at-home primary care, and in-home evaluation business. It said the following in its Q4 2024 investor letter:
“CVS Health Corporation (NYSE:CVS) struggled throughout the year following a number of disappointments related to their Medicare Advantage business. While this had a negative impact on the near-term financials, the issues are well understood, and changes are already being made for the 2025 program. We see a clear pathway to improving margins throughout 2025 in all areas of the business. Furthermore, the company has upgraded their management team promoting David Joyner to CEO and hiring former UnitedHealth Group executive Steven Nelson to run the managed care business. On a longer-term basis, we continue to think CVS has an attractive combination of assets owning a healthcare benefits business (Aetna), a pharmacy-benefits manager (Caremark), an in-home evaluation business (Signify Health) and in-home primary care business (Oak Street Health) supporting the industry transition to a value-based care model. As the company works to implement the turnaround, the company has an attractive dividend yield of 5.8%.”
Overall, CVS ranks 8th on our list of the best stocks that will always grow. While we acknowledge the potential for CVS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than CVS but trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
