We recently compiled a list of the 10 Best High Volume Stocks To Buy According to Hedge Funds. In this article, we are going to take a look at where CrowdStrike Holdings, Inc. (NASDAQ:CRWD) stands against the other high volume stocks.
On September 18, the Federal Reserve implemented its first interest rate cut since the onset of the COVID-19 pandemic, reducing benchmark rates by half a percentage point to counter a potential labor market slowdown. This adjustment brings the federal funds rate to 4.75% to 5%. Aside from the emergency rate cuts during the pandemic, the last time the Federal Open Market Committee (FOMC) made a half-point reduction was during the 2008 global financial crisis. Following the decision, Fed Chairman Jerome Powell made the following remarks:
“We’re trying to achieve a situation where we restore price stability without the kind of painful increase in unemployment that has come sometimes with this inflation. That’s what we’re trying to do, and I think you could take today’s action as a sign of our strong commitment to achieve that goal.”
The post-meeting statement emphasized that the Federal Reserve has grown more confident in inflation moving sustainably toward the 2% target. It believes the risks to achieving its employment and inflation goals are now roughly balanced. Wall Street expects that the ensuing rate cuts will enable well-established, financially stable companies to boost spending and investments, potentially driving up their stock prices through the remainder of 2024 and into early 2025. Similarly, Wells Fargo analysts suggest that the global economy stands to benefit as many major central banks have already announced or are expected to announce rate cuts. However, not everyone is optimistic. Billionaire investor Ray Dalio highlighted that the U.S. economy continues to grapple with an “enormous amount of debt.” During an interview, he pointed out that the Federal Reserve faces the challenge of maintaining interest rates high enough to benefit creditors, while not raising them so much that they become burdensome for debtors. Dalio described this as a difficult “balancing act”.
On another front, the Conference Board’s consumer confidence index dropped to 98.7 in September, down from 105.6 in August, marking the largest one-month decline since August 2021. This was below the Dow Jones forecast of 104 and significantly lower than the pre-pandemic level of 132.6 recorded in February 2020. All five components of the index saw declines, with the most significant drop occurring among those aged 35-54 and earning less than $50,000. The last time the index fell this sharply was when inflation was starting its rise to a 40-year high. Commenting on the sentiment shift, Dana Peterson, chief economist at The Conference Board, noted:
“Consumers’ assessments of current business conditions turned negative while views of the current labor market situation softened further. Consumers were also more pessimistic about future labor market conditions and less positive about future business conditions and future income.”
Within a complex economic landscape marked by mixed signals across sectors, investor sentiment remains cautiously optimistic, with market participants closely watching economic indicators and Fed policies to identify future trends. With this in mind, we present a list of the 10 Best High Volume Stocks To Buy According to Hedge Funds.
Our Methodology
We used stock screeners to identify stocks that met specific criteria as of September 23. Our selection criteria was focused on stocks with notable market activity, including a 3-month average trading volume exceeding 5 million shares. We also considered companies with a quarterly revenue growth rate of over 15%. Additionally, we highlighted the number of hedge funds invested in each stock, as of Q2 2024.
At Insider Monkey, we are obsessed with 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).
Security personnel at their consoles, monitoring a global network of threats in real-time.
CrowdStrike Holdings, Inc. (NASDAQ:CRWD)
Avg Volume: 8.19 million
Quarterly Revenue Growth: 31.74%
Number of Hedge Fund Holders: 69
CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is a cybersecurity company offering a broad range of security solutions, including identity management, threat intelligence, and threat detection.
BMO Capital remains optimistic about CrowdStrike’s performance, maintaining an Outperform rating and a $315 price target following the company’s Fal.Con 2024 user and analyst event. Despite potential revisions to estimates and some market volatility, BMO expressed confidence in the company’s strong position within the cybersecurity industry.
In its second fiscal quarter, CrowdStrike Holdings, Inc. (NASDAQ:CRWD) exceeded expectations in annual recurring revenue (ARR), total revenue, and non-GAAP earnings per share. However, the company’s guidance for Q3 and fiscal year 2025 came in below consensus estimates, with management reaffirming their long-term ARR target of $10 billion by fiscal year 2031.
At the end of Q2 2024, 69 hedge funds held stakes in CrowdStrike Holdings, Inc. (NASDAQ:CRWD), with total investments reaching $3.01 billion. Citadel Investment Group was the largest shareholder, holding a position valued at $574.6 million as of June 30.
TimesSquare Capital Management U.S. Focus Growth Strategy stated the following regarding CrowdStrike Holdings, Inc. (NASDAQ:CRWD) in its Q2 2024 investor letter:
“Our cybersecurity holdings were also beneficial to the strategy this quarter. That included the 20% gain from CrowdStrike Holdings, Inc. (NASDAQ:CRWD), a cloud-based network security service provider that supports a range of devices, endpoints, and cloud environments. CrowdStrike’s revenues and earnings exceeded expectations, with 33% growth in annual recurring revenue. CrowdStrike continues to see growing momentum in emerging areas such as Cloud Security, Identity, and Security Information & Event Management where it is displacing legacy providers. That led CrowdStrike’s management to increase its guidance for revenues and earnings for the balance of its fiscal year.”
Overall CRWD ranks 7th on our list of the best high volume stocks to buy according to hedge funds. While we acknowledge the potential of CRWD as an investment, we believe that certain AI stocks hold promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than CRWD 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.
