We recently published a list of Top 10 Stocks to Buy According to XN Exponent Advisors LLC. In this article, we are going to take a look at where GE Aerospace (NYSE:GE) stands against other top stocks to buy according to XN Exponent Advisors LLC.
Established in 2018 by Gaurav Kapadia, XN Exponent Advisors LLC is based in New York and manages approximately $2.53 billion in 13F securities according to its latest filing for the fourth quarter of 2024. With just 13 clients, the hedge fund maintains a concentrated portfolio, with its top ten holdings accounting for 69.02% of its total assets. XN employs a global investment strategy that spans both public and private markets, focusing on generating high risk-adjusted returns. The firm targets sectors where it has deep expertise while deliberately avoiding balance sheet-heavy industries such as financials, healthcare, energy, and materials.
The firm primarily invests in North America and Western Europe but remains open to opportunities in other regions that align with its strategic goals. XN’s investment approach is built around a long/short strategy, where it seeks to capitalize on market inefficiencies by purchasing undervalued assets and shorting overvalued ones. This method hinges on the firm’s ability to assess market opportunities accurately, though there is no guarantee of success. Market disruptions pose a significant risk, as they can result in substantial losses and may force XN to close out client positions to mitigate damage.
A key feature of XN’s approach is its flexibility. Unlike traditional investment firms bound by rigid diversification or leverage policies, XN can trade across a wide range of securities, issuers, countries, and sectors to align with its investment objectives. This adaptability enables the firm to respond quickly to shifting market conditions, reallocating client assets as necessary. While this strategy offers significant potential for high returns, it also carries inherent risks, particularly in volatile market environments. However, XN’s focus on specialized knowledge and strategic positioning aims to maximize opportunities while managing downside exposure.
Founder and Chief Executive Officer of XN, Gaurav Kapadia has nearly two decades of experience in public and private markets and has built a reputation as a visionary investor and business leader. Before launching XN, a firm whose name reflects the power of long-term compounding, Kapadia was the Co-Founder and Co-Managing Partner of Soroban Capital Partners, a globally recognized investment firm. Prior to that, he served as a Partner at TPG-Axon Capital, working in both New York and London. His extensive expertise in finance and investing is rooted in his academic background; he earned a Bachelor of Science in Economics from the Wharton School at the University of Pennsylvania in 1999.
Beyond his financial career, Kapadia is deeply committed to philanthropy and civic engagement, particularly in the arts, humanities, education, and social equity. In September 2023, the Mellon Foundation announced his election to its Board of Trustees, recognizing his dedication to supporting cultural and educational initiatives. He has been a strong proponent of the transformative power of art and the humanities, emphasizing their role in fostering positive societal change. Under the leadership of Mellon Foundation President Elizabeth Alexander, Kapadia expressed his excitement to contribute to the organization’s mission, citing its precision and ambitious vision as key reasons for his involvement.
Kapadia also serves on the Boards of Trustees for several influential institutions, including The Whitney Museum of American Art, The Trust for Governors Island, Uncommon Schools, and The Institute for Constitutional Advocacy and Protection at Georgetown University Law Center. His advocacy for education, civic engagement, and equality underscores his commitment to creating meaningful opportunities for underserved communities. Through his leadership in both finance and philanthropy, Kapadia continues to bridge the worlds of business and social impact, demonstrating how strategic investments—whether in financial markets or cultural institutions—can drive long-term positive change.
Our Methodology
The stocks discussed below were picked from XN Exponent Advisors LLC’s Q4 2024 13F filings. They are compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from 1009 hedge funds tracked by Insider Monkey in the fourth quarter of 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).
A research laboratory full of pharmaceutical bottles and measuring tools.
GE Aerospace (NYSE:GE)
Number of Hedge Fund Holders as of Q4: 101
XN Exponent Advisors LLC’s Equity Stake: $186.20 Million
GE Aerospace (NYSE:GE), headquartered in Evendale, Ohio, is a leading aircraft engine supplier and the legal successor to the original General Electric Company. On January 23, 2025, GE Aerospace released its fourth-quarter and full-year 2024 financial results, highlighting significant growth in key performance metrics. The company reported a 46% increase in total orders for the quarter, reaching $15.5 billion, while total revenue grew by 14% to $10.8 billion. Profit margins also expanded, with a GAAP margin of 21.2% and an EPS increase of 62% to $1.75. Cash from operating activities rose 5% to $1.3 billion, demonstrating strong financial momentum.
For the full year 2024, GE Aerospace (NYSE:GE) recorded total orders of $50.3 billion, marking a 32% year-over-year increase. Revenue reached $38.7 billion, reflecting 9% growth, while the company maintained a profit margin of 19.7%. Despite a 27% decline in EPS to $6.09, cash from operating activities remained strong at $5.8 billion. CEO H. Lawrence Culp, Jr. emphasized the company’s solid financial performance, highlighting the role of strong market demand and operational efficiency in driving order growth and free cash flow. He also noted the company’s transition into an independent entity and its strategic focus on innovation and efficiency through FLIGHT DECK, a proprietary lean operating model designed to enhance productivity and accelerate output.
Looking ahead to 2025, GE Aerospace (NYSE:GE) anticipates continued strong performance, projecting double-digit revenue and EPS growth, along with over 100% free cash flow conversion. The company is addressing supply chain challenges through targeted improvements, which have already resulted in a 26% growth in material input across key supplier sites. Additionally, the company returned over $6 billion to shareholders in 2024 and announced a $7 billion share repurchase plan for 2025, alongside a proposed 30% dividend increase. With these strategic initiatives, GE Aerospace (NYSE:GE) remains focused on driving long-term growth and strengthening its leadership in the aviation industry, presenting an excellent stock opportunity for investors looking for long-term value and stability in the aviation sector.
Aristotle Atlantic Core Equity Strategy stated the following regarding GE Aerospace (NYSE:GE) in its Q4 2024 investor letter:
“GE Aerospace (NYSE:GE) designs and produces commercial and defense aircraft engines, integrated engine components, electric power, and mechanical aircraft systems. The industry has high entry barriers and is concentrated among few players. Despite its cyclical nature, the demand for travel is driven by global middle-class growth. Boeing and Airbus have long order books, ensuring steady demand for engines and spare parts. The company also benefits from high-margin services for existing aircraft fleets, with services accounting for 70% of its commercial engine business. GE Aerospace serves customers worldwide.
We see GE Aerospace making significant strides in its commercial engine business, which is expected to boost future services revenue growth. Over the past five years, the company has undergone substantial restructuring and simplification, including divesting its healthcare and energy businesses. The company now operates in three segments: Commercial Engines & Services (CES), Defense & Propulsion Technologies (DPT) and Insurance. Long-term revenue guidance is for high single-digit growth, and management has a goal of $10 billion in annual operating profit by 2028, with an expected 20% annual earnings growth. Following years of restructuring, we see GE Aerospace now positioned to return capital to shareholders through dividends and share repurchases.”
Overall, GE ranks 3rd on our list of top stocks to buy according to XN Exponent Advisors LLC. While we acknowledge the potential for GE 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. If you are looking for an AI stock that is more promising than GE 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.
