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 ABCTKO Group Holdings, Inc. (NYSE:TKO) 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 closeup of a digital newsroom, highlighting the complexity of the modern media landscape.
TKO Group Holdings, Inc. (NYSE:TKO)
Number of Hedge Fund Holders as of Q4: 54
XN Exponent Advisors LLC’s Equity Stake: $373.50 Million
TKO Group Holdings, Inc. (NYSE:TKO), a prominent American media conglomerate, was formed through the merger of World Wrestling Entertainment (WWE) and Zuffa, LLC, the parent company of the Ultimate Fighting Championship (UFC). Headquartered in Stamford, Connecticut, TKO specializes in producing and licensing a wide range of content, including live events, television programming, reality series, and digital media.
Expanding its influence beyond wrestling and mixed martial arts, TKO Group Holdings, Inc. (NYSE:TKO) is venturing into the boxing industry through a new partnership with Saudi Arabia. The company has signed a multiyear agreement with Turki Alalshikh, chairman of the Saudi General Entertainment Authority, and Sela, a subsidiary of the Saudi Public Investment Fund. Under this partnership, TKO will oversee the promotion’s daily operations, with UFC President Dana White and WWE President Nick Khan leading the initiative. The inaugural event is slated for 2026, with participating boxers gaining access to UFC Performance Institutes in Las Vegas, Mexico City, and Shanghai.
Financially, TKO Group Holdings, Inc. (NYSE:TKO) delivered a strong performance in 2024, reporting fourth-quarter revenue of $642.2 million and a net income of $47.5 million. For the full year, the company generated $2.804 billion in revenue, with an adjusted EBITDA of $1.25 billion. Looking ahead to 2025, TKO projects revenue between $2.93 billion and $3 billion, with an expected adjusted EBITDA ranging from $1.35 billion to $1.39 billion. This steady financial growth underscores the company’s ability to expand its market presence while maintaining profitability.
In addition to its expansion into boxing, TKO Group Holdings, Inc. (NYSE:TKO) has announced its first quarterly cash dividend since launching its capital return program. The company plans to distribute approximately $75 million, equating to $0.38 per share, to Class A common stockholders. The dividend will be paid on March 31, 2025, to shareholders of record as of March 14, 2025. With strong financial performance, strategic partnerships, and continuous growth in the global sports entertainment market, TKO remains a compelling investment opportunity for those looking to capitalize on the evolving landscape of combat sports.
In Q4 2024, XN Exponent Advisors LLC increased its stake in the company by 13%. From its previous holding of 2.3 million shares in Q3, the hedge fund held approximately 2.6 million shares of TKO Group Holdings, Inc. (NYSE:TKO) by the end of Q4, valued at over $373 million. Hedge fund interest in the company also increased, with 54 out of 1,009 funds tracked by Insider Monkey holding positions worth nearly $2.12 billion by the end of quarter Q4, up from 42 funds in Q3.
Overall, TKO ranks 1st on our list of top stocks to buy according to XN Exponent Advisors LLC. While we acknowledge the potential for TKO 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 TKO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires
Disclosure: None. This article is originally published at Insider Monkey.
