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 Summit Therapeutics Inc. (NASDAQ:SMMT) 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).
A laboratory employee in a sterile environment inspecting a microscope focused on a Clostridioides difficile infection sample.
Summit Therapeutics Inc. (NASDAQ:SMMT)
Number of Hedge Fund Holders: 25
Stock Price Return in the last twelve months: 306%
Summit Therapeutics Inc. (NASDAQ:SMMT) is a biopharmaceutical company focused on developing innovative medicines for infectious diseases and oncology. Its pipeline includes targeted therapies designed to address antibiotic-resistant bacterial infections and novel cancer treatments. The company collaborates with research institutions and industry partners to advance its drug candidates through clinical development. SMMT operates primarily in the United States and international markets, working to bring new treatment options to patients with unmet medical needs.
Summit Therapeutics Inc. (NASDAQ:SMMT) has made significant progress with its lead investigational asset – Ivonescimab – reaching several meaningful milestones in Q4 2024 and early 2025. The company announced a clinical trial collaboration with Pfizer to evaluate Ivonescimab in combination with multiple Pfizer antibody drug conjugates in unique solid tumor settings, with trials expected to start by mid-2025. SMMT completed enrollment in HARMONi, their global Phase III trial for EGFR mutated advanced non-small cell lung cancer patients, and received Fast Track designation, with top line data expected in mid-2025.
Summit Therapeutics Inc. (NASDAQ:SMMT) expanded its HARMONi-3 trial to include both squamous and non-squamous histologies, significantly increasing the addressable patient population by 2-3x. More than 2,300 patients have been treated with Ivonescimab in clinical trials since 2019, and the drug was featured in 14 publications across 7 tumor types and selected for 5 oral presentations at major medical conferences in 2024. Currently, between SMMT and its partner Akeso, 4 Phase III trials have completed enrollment, 2 are awaiting top line data, and 5 Phase III trials are ongoing across various cancer types. The company ended 2024 with a strong cash position of approximately $412 million and is debt-free, positioning it well to continue executing its clinical trials. With a stock price return of 306% in the last year, SMMT is one of the best multibagger stocks to buy in 2025.
Overall, SMMT ranks 6th on our list of best multibagger stocks to buy in 2025. While we acknowledge the potential of SMMT 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 SMMT 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.
