We recently published a list of 16 Best 52-Week Low Stocks To Buy Now According to Short Sellers. In this article, we are going to take a look at where FTI Consulting Inc. (NYSE:FCN) stands against other best 52-week low stocks to buy now according to short sellers.
The US stock market reached new all-time highs in late February 2025, as inflation remained near the 2% target while a potential end in the Ukraine conflict sparked some optimism for the long term. Besides the creation of multi-billion-dollar demand for potential rebuilding efforts of the country, including agriculture, residential, and infrastructure, the return of American business to Ukraine and Russia is a big win for most corporations, many of which could experience up to double-digit uplift in revenue and earnings growth due to up to 200 million customer market. More importantly, this outlook is favorable for energy security, stimulates volumes, and might push energy prices lower, which in turn allows for higher profitability.
Despite the aforementioned tailwinds, the US stock market gains are still largely driven by the Magnificent 8 companies, which trade at record-high valuations and have contributed to an unprecedented rise in the stock market concentration. These companies are anticipated to have tremendous growth opportunities arising from AI and data center megatrends, on top of existing rapidly growing niches like cloud computing, media streaming, SaaS, and others. Only time will tell whether the current valuations are fair; what is certain is that many industries have been struggling since 2022, as inflationary pressures followed by high interest rates and an increasingly tough labor market dominated by layoffs and scarcity of entry-level positions have put tremendous pressure on US consumers. The high financing costs have led to diminishing Capex appetite in many industries, leading to struggle in several market segments – perfectly illustrated by underperforming consumer discretionary and industrial sectors since 2022.
On top of harsh macro conditions in the last 3 years, the new “Trump 2.0” regime and his administration can be a threat for the healthcare sector. Trump is a notorious critic of the health insurance business and might create headwinds for it through attempts of deregulation and efforts to cut the government financing of healthcare programs. As a result, the healthcare sector relative to the overall market is at record lows comparable to the 2008 depression. All in all, despite apparent optimism in the market, there are pockets of underperformance and many companies trading near their 52-week low, which may present compelling opportunities to acquire good companies at attractive prices.
Our Methodology
We screened 30-40 stocks with at least $1 billion in market cap that are near their 52-week lows. Then we sorted them by open short interest as a percentage of outstanding shares and included the top 16 with the lowest open short interest in the article. Our belief is that a low open short interest implies a lack of bearish views on the business from leading hedge funds, which represents a bullish signal from a contrarian perspective.
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 363.5% since May 2014, beating its benchmark by 208 percentage points (see more details here).
An international conference room with a team of corporate finance and restructuring consultants.
FTI Consulting Inc. (NYSE:FCN)
Short Interest as % of Shares Outstanding: 1.09%
FTI Consulting Inc. (NYSE:FCN) is a global business advisory firm specializing in corporate finance, economic consulting, forensic investigations, litigation support, and strategic communications. Serving corporations, law firms, and government agencies, FCN helps clients navigate complex financial, legal, and reputational challenges. With deep industry expertise and data-driven insights, the firm provides solutions for crisis management, regulatory compliance, and business transformation.
FTI Consulting Inc. (NYSE:FCN) started to report problems in Q3 2024, as it experienced its first quarter-over-quarter revenue decline in recent periods, with revenue pressures stemming from both market-related challenges, particularly in Asia businesses, and internal factors such as delays in assignments in North American business and simultaneous conclusion of large client engagements in the strategy business. The outlook further deteriorated in 4Q due to a major challenge with several senior departures in the US competition part of the Compass Lexecon subsidiary, with expectations that additional less tenured people may also depart, creating substantial headwinds for 2025. This evolution has led to muted guidance for 2025. Despite significant challenges, the company is seeing steady demand for restructuring and expects a pickup in M&A, transformation, and strategy-related businesses. Management also assumes a pickup in demand for disputes and investigations-related businesses in FLC. Historically, FTI Consulting Inc. (NYSE:FCN) has massively outperformed the market in the last 5 years and it is of no surprise that hedge funds are reluctant to short this company despite the ongoing difficulties – short interest is only 1.09% of total shares outstanding. With the stock price down 30% since the October peak, this may be an attractive opportunity for bulls from a contrarian perspective.
Overall, FCN ranks 1st on our list of best 52-week low stocks to buy now according to short sellers. While we acknowledge the potential of FCN 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 timeframe. If you are looking for an AI stock that is more promising than FCN 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.