We recently compiled a list of the 10 Hot New Stocks to Buy Now. In this article, we are going to take a look at where LandBridge Company LLC (NYSE:LB) stands against the other hot new stocks.

According to a report published by EY on January 15, the IPO activity in the United States remained strong in 2024 and is expected to continue at an accelerated pace in 2025. The market made a significant recovery last year. This recovery was both in terms of the number of IPOs and the proceeds raised when compared to 2023. While the number of IPOs increased 38% year-over-year, the proceeds rose 48% during the same time. The report further highlighted that around 20 deals raised more than $500 million, whereas, seven deals stood out by topping $1 billion. During the fourth quarter of 2024 alone, the proceeds almost doubled year-over-year, driven by a single deal that raised $1.7 billion, around 30% of the overall proceeds from Q4 2023.

READ NEXT: 12 Best Internet of Things Stocks To Buy According to Analysts and 10 Worst Performing Bank Stocks in 2024.

During the last year, 176 IPO deals led the total proceeds for the year to $33 billion. The healthcare technology and media and telecommunication sectors were the key leaders for the US IPO activity as these sectors accounted for around 61% and 49% of the overall proceeds. Moreover, companies with advancements in artificial intelligence technology were found to be significant attention gainers among investors. Looking ahead, the report predicts continued growth for the IPO market, with substantial success for companies with proven AI-driven results. In addition, cross-border IPOs also came under the spotlight as they accounted for around 64% of the deals conducted in Q4 2024, with two non-US companies making it to the top 10 largest deals of 2024.

Our Methodology

To curate the list of 10 hot new stocks to buy now we conducted our initial research using the Finviz stock screener. We searched for companies that went public in the last 2 years and then sorted the list by their past 6 months performance. Next, we cross-checked the past 6 months’ performance from Google and the analyst upside potential for each stock sourced from CNN. Lastly, we ranked the stocks based on the number of hedge fund holders as per Insider Monkey’s Q4 2024 database. Please note that the data was collected on February 18, 2025.

Why do we care about what hedge funds do? 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).

LandBridge Company LLC (NYSE:LB)

6-Months Performance: 97.78%

Analyst Upside Potential: 11.81%

Number of Hedge Fund Holders: 20

LandBridge Company LLC (NYSE:LB) manages land and resources in the Permian Basin, specifically the Delaware Basin, which is a hotspot for oil and gas activity. The company owns around 273,000 surface acres in Texas and New Mexico. Instead of focusing on drilling, the company leases its land to oil and gas companies and for other industrial operations34. This strategy allows them to have a diverse income stream, which reduces their dependency on fluctuating oil prices.

On January 28, Raymond James raised their price target on the company from $80 to $85, while maintaining an Outperform rating on the stock. The firm noted that while the recent quarter was satisfactory for midstream companies, it wasn’t exceptional. They noted that 2024 was a significant year for midstream suppliers, with continued growth anticipated into 2025.

During the fiscal third quarter of 2024, LandBridge Company LLC (NYSE:LB) experienced a 60% year-over-year increase in revenue and a 62% increase in adjusted EBITDA. The company has successfully shifted its revenue streams to reduce direct exposure to commodity price fluctuations. Non-oil and gas royalty revenue, which includes surface use royalties, revenues, and resource sales, now constitute 90% of overall revenues, up from 83% in the last quarter. It is one of the hot new stocks to buy now.

Ave Maria Focused Fund stated the following regarding LandBridge Company LLC (NYSE:LB) in its Q3 2024 investor letter:

“LandBridge Company LLC (NYSE:LB): LandBridge is a land management company that operates in the Permian Basin, where it owns ~220,000 acres. Similar to another Fund holding, Texas Pacific Land Corp., it receives royalties from oil and gas produced on its land. It also sells water for the fracking of oil and gas wells and receives payments for the surface use of its land. LandBridge is at the forefront of bringing data center operators to the Permian Basin, given the area’s abundance of land, water, and low-cost natural gas. Since the Fund purchased a position, LandBridge’s stock price is up 130% through the end of the third quarter.”

Overall LB ranks 6th on our list of the hot new stocks to buy now. While we acknowledge the potential of LB 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 LB 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 Complete List of 59 AI Companies Under $2 Billion in Market Cap.

Disclosure: None. This article is originally published at Insider Monkey.