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 Joint Stock Company Kaspi.kz (NASDAQ:KSPI) 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).
Joint Stock Company Kaspi.kz (NASDAQ:KSPI)
3-Year CAGR as of February 11: 46.51%
Number of Hedge Fund Holders: 26
Joint Stock Company Kaspi.kz (NASDAQ:KSPI) provides payments, marketplace, and fintech solutions in Kazakhstan. Through its three platforms, it facilitates transactions between consumers and merchants, connects online and offline sellers with buyers, and offers financial products. These products include BNPL and merchant financing. Its services are accessible through its super app and include features like mobile commerce, travel booking, and various financial tools.
The company’s Fintech segment showed strong Q3 2024 performance, with revenue up 24% and net income increasing 15% year-over-year. This was driven by lower interest rates and the growing influence of AI. AI-powered risk assessment and credit scoring models are boosting loan origination while keeping the cost of risk stable. The loan portfolio grew 39% year-over-year. With continued AI advancements and lower funding costs, profitability is expected to improve.
Joint Stock Company Kaspi.kz (NASDAQ:KSPI) acquired 40,000,000 Class A and 173,246,220 Class B shares (65.41% of total outstanding shares) of Hepsiburada for about $1,127 million as January ended. Hepsiburada is a leading e-commerce platform in Turkey. Both companies will maintain separate brands and operations.
Overall, KSPI ranks 7th on our list of best young stocks to buy and hold for 10 years. While we acknowledge the growth potential of KSPI, 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 KSPI 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.
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