We recently compiled a list of the 12 Best Booming Stocks to Invest in Now. In this article, we are going to take a look at where BrightSpring Health Services, Inc. (NASDAQ:BTSG) stands against other best booming stocks to invest in now.
The U.S. stock market closed on a downbeat on Friday, January 31, as investors grappled with the announcement that President Donald Trump’s new tariffs on major trading partners would take effect the following day. The Dow Jones Industrial Average tumbled 0.75%, to close at 44,544.66 and the S&P 500 shed 0.50% to close at 6,040.53, while the Nasdaq Composite slipped 0.28% to 19,627.44. However, the day marked the end of a tumultuous January for traders with the three major averages still managing to post monthly gains. The S&P 500 rose 2.7%, the Nasdaq advanced 1.6%, and the Dow surged 4.7%.
Economic data released on Friday also influenced market sentiment. The December data for the personal consumption expenditures (PCE) price index, which is the preferred inflation gauge of the Federal Reserve, showed an increase of 0.3% from November and a 2.6% annual rate. While this yearly advance was in line with economists’ expectations, it marked an acceleration from the prior month’s annual rate of 2.4% and raised concerns that inflation remains sticky.
Tom Hainlin, a senior investment strategist at U.S. Bank Asset Management Group, noted that the market’s initial reaction to the tariff news was to sell, much like the reaction to the DeepSeek AI developments earlier in the week. Trump will be imposing a 25% tariff on Canada and Mexico, alongside a 10% duty on China. However, Hainlin explained that there are no details about tariffs, whether they are temporary or permanent, or what the potential responses from Canada, Mexico, or China might be.
READ ALSO: 12 Most Promising Green Stocks According to Hedge Funds and 10 Worst Performing Energy Stocks in 2024.
In an interview with CNBC on January 22, Jamie Dimon, Chairman and CEO at JPMorgan Chase, discussed a range of economic and political issues, including market conditions, the impact of a strong dollar, and the broader economic policies of the United States. Dimon began by addressing that the current state of the U.S. stock market is elevated and stocks trading at a historic price-to-earnings ratio. Dimon believes that the stock prices must be justified by strong growth and there is a need for good outcomes to sustain these levels.
Dimon suggested that the strength of the dollar is an outcome of broader economic factors and that a strong dollar can have its benefits but it can also have negative effects, especially for international companies dealing with tariffs and trade tensions. However, Dimon downplayed the significance of the strong dollar, stating that it is less important than many people think and that the most crucial factor remains economic growth.
Dimon further discussed the challenges of implementing growth strategies, emphasizing that while many recognize the need for change, the real challenge lies in execution. He also addressed the geopolitical issues with Ukraine, Iran, Russia, North Korea, and China, expressing that these issues can affect the world in the long term. He noted that while tariffs are a significant topic of discussion, they are just a tool in a broader economics and national security strategy. Overall, Dimon is cautiously optimistic about the economy and highlighted concerns about government spending, potential inflation, and the global economic landscape.
While the market appears overvalued and faces significant headwinds, some stocks are performing exceptionally well and hold significant potential.
Our Methodology
To compile our list of the 12 best booming stocks to invest in now, we used Finviz and Yahoo stock screeners to identify the 30 largest companies whose stock prices have increased by at least 35% year-to-date as of January 30. We then used Insider Monkey’s Hedge Fund database to rank 12 stocks according to the largest number of hedge fund holders, as of Q3 2024. The list is sorted in ascending order of hedge fund sentiment.
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).
BrightSpring Health Services, Inc. (NASDAQ:BTSG)
Number of Hedge Fund Holdings: 29
Year-to-Date Performance as of January 30: 42.34%
BrightSpring Health Services, Inc. (NASDAQ:BTSG) is a leading provider of home and community-based healthcare solutions. The company offers services in behavioral health, home health care, and pharmacy services and caters to individuals with disabilities, chronic conditions, and specialized medical needs. BrightSpring Health Services, Inc. (NASDAQ:BTSG) has a vast network in the United States and partners with healthcare organizations and insurers to deliver high-quality, cost-effective care.
On January 20, BrightSpring Health Services, Inc. (NASDAQ:BTSG) entered into a definitive agreement to divest its Community Living business, ResCare Community Living, to Sevita for $835 million in cash. The divestiture of the Community Living business allows the company to concentrate on its core Provider Services, which include Home Health and Hospice, Personal Care, Rehabilitation Services, and Primary Care. The divestiture will generate after-tax proceeds of approximately $715 million, which will be primarily used for debt reduction and is expected to strengthen the company’s balance sheet and reduce interest expenses. The improved financial health is a key factor driving investor confidence and contributing to the stock’s upward trajectory.
Furthermore, BrightSpring Health Services, Inc. (NASDAQ:BTSG) has reported preliminary 2024 financial results that surpass previous guidance, with Net Revenue expected to range between $11.20 billion and $11.30 billion, compared to the consensus estimate of $11.17 billion.
Overall BTSG ranks 9th on our list of the best booming stocks to invest in now. While we acknowledge the potential of BTSG 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 BTSG 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.
