In this article, we will take a look at the 13 best consulting stocks to buy now. To see more such companies, go directly to 5 Best Consulting Stocks to Buy Now.
Consulting firms have been at the forefront of the economic boom over the past several years. As business activity thrived and entrepreneurship became mainstream, small and large businesses turned to consulting firms to seek their advice on financial management, accounting, optimizing their business and finding path to growth. As a result consulting companies continued to post impressive growth, and became famous for hiring top graduates from some of the most prestigious business schools.
But major consulting companies are feeling the heat of the changing economic environment. The Wall Street Journal reported in April that consulting giants McKinsey and Bain were having to delay the onboarding of new hires from top business schools. Bain reportedly told some new hires that if they agree to wait until April next year, the company would pay them “$40,000 to work for a nonprofit or $30,000 to learn a new language or participate in an educational program.”
But the consulting industry is much bigger than the Big Four. Despite the short-term headwinds, the overlook outlook for the consulting sector is upbeat and there are many consulting stocks which an average investors could invest in to benefit from this trend. According to some estimates, as of 2021, the market size of global management consulting was somewhere between $700 billion to $900 billion. According to estimates from Mordor Intelligence, the management consultancy services industry is expected to grow at a CAGR of 5.55% through 2028. The industry spans several sectors, including HR, Telecom, Healthcare, Hotel, Real Estate and IT.
Information technology and software remain the biggest growth areas in the consulting industry, driven by a worldwide shift of business from on-premise resources to Cloud, automation, web applications and AI. Major consulting companies like International Business Machines Corp. (NYSE:IBM), Gartner Inc. (NYSE:IT) and Accenture Plc (NYSE:ACN) are expected to tap into the huge opportunities recently unlocked by generative AI. It was recently reported that PwC would invest $1 billion over the next three years in the generative AI space. The company reportedly plans to use the technology in its tax, audit and consulting services. Companies like PwC will also advise businesses on how to implement and integrate AI with their businesses to reduce costs and maximize results.
Our Methodology
For this article we scanned Insider Monkey’s database of 943 hedge funds and picked 13 consulting companies with the highest number of hedge fund investors. Some notable names in the list are International Business Machines Corp. (NYSE:IBM), Gartner Inc. (NYSE:IT) and Accenture Plc (NYSE:ACN).
Number of Hedge Fund Holders: 13
Insider Monkey’s database of 943 hedge funds shows that 13 hedge funds had stakes in The Hackett Group, Inc. (NASDAQ:HCKT). The biggest stakeholder of The Hackett Group, Inc. (NASDAQ:HCKT) during this period was Trigran Investments of Douglas T. Granat which owns a $36 million stake in the company.
The Hackett Group, Inc. (NASDAQ:HCKT) posted its Q4 results back in February. Adjusted EPS in the quarter totaled $0.36, beating estimates by $0.03. Revenue in the quarter came in at $70.1 million, beating analyst consensus estimate by $2.39 million.
Number of Hedge Fund Holders: 16
CRA International, Inc. (NASDAQ:CRAI), commonly known as Charles River Associates, is one of the best consulting stocks to buy according to hedge funds.
As of the end of the fourth quarter of 2022, 16 hedge funds tracked by Insider Monkey had stakes in CRA International, Inc. (NASDAQ:CRAI). The biggest stakeholder of CRA International, Inc. (NASDAQ:CRAI) was Pertento Partners of Ian Trundle which owns a $21 million stake in the company.
Number of Hedge Fund Holders: 16
Hedge fund sentiment for Huron Consulting Group (NASDAQ:HURN) ticked up in the fourth quarter, as 16 hedge funds tracked by Insider Monkey reported owning stakes in the firm at the end of the period, up from 12 hedge funds in the previous quarter. The most notable hedge fund stakeholder of Huron Consulting Group (NASDAQ:HURN) was Driehaus Capital of Richard Driehaus which owns a $16.4 million stake in the company.
Earlier this month Huron Consulting Group (NASDAQ:HURN) posted strong Q1 results. Adjusted EPS in the period came in at $0.87 beating estimates by $0.21. Revenue in the quarter totaled $317.9 million, surpassing estimates by $18.25 million.
A total of six hedge funds tracked by Insider Monkey had stakes in Huron Consulting Group (NASDAQ:HURN) at the end of the fourth quarter.
Number of Hedge Fund Holders: 18
California-based engineering and scientific consulting firm Exponent, Inc. (NASDAQ:EXPO) ranks 10th in our list of the best consulting stocks to buy now. In April Exponent, Inc. (NASDAQ:EXPO) posted strong first quarter results. GAAP EPS in the period came in at $0.56, in line with the estimates. Revenue jumped about 9.2% year over year to $140.31 million, beating estimates by $13.14 million. Exponent, Inc. (NASDAQ:EXPO) said its full-year 2023 guidance remains unchanged.
In February, Exponent, Inc. (NASDAQ:EXPO) increased its quarterly dividend by 8.3%. Out of the 943 hedge funds in Insider Monkey’s database, 18 hedge funds reported having stakes in Exponent, Inc. (NASDAQ:EXPO).
Number of Hedge Fund Holders: 21
Franklin Covey Co. (NYSE:FC) provides consulting and coaching services to businesses.
During its fiscal second-quarter earnings call with analysts, Franklin Covey Co. (NYSE:FC) talked about some latest client wins, including a customer related to tech consultancy. Franklin Covey Co. (NYSE:FC)’s CEO Paul Walker said:
"I’d like to briefly touch on a few recent client wins that illustrate the type of positive momentum we’re seeing across the majority of our client base right now. First is the recent new client win with a large organization is engaging us on a major sales transformation initiative that will touch more than 5,000 of their sales professionals around the world. This is a five year All Access Pass contract. A second is a large multinational information technology consultancy, whose All Access Pass actually expired six months ago, resulting in a non-renewal at that time, as the client wrestled with what was an uncertain economy and what that might mean for their business. However, in the second quarter just ended we won this client back for a new three-year contract with significant subscription services attached. A third is the large transportation company that expanded their All Access Pass seats from 1,500 to 9,000 in the second quarter, so that we can now help them address the entirety of their leadership population globally."
Number of Hedge Fund Holders: 35
Cognizant Technology Solutions Corp. (NASDAQ:CTSH) provides IT-related consulting services. Earlier this month Cognizant Technology Solutions Corp. (NASDAQ:CTSH) posted its first-quarter results. Adjusted EPS in the period came in at $1.11, beating estimates by $0.06.
Revenue in the period came in at $4.8 billion beating estimates by $70 million.
Insider Monkey’s database of 943 hedge funds shows that 35 hedge funds had stakes in Cognizant Technology Solutions Corp. (NASDAQ:CTSH) as of the end of the fourth quarter of 2022. The biggest stakeholder of Cognizant Technology Solutions Corp. (NASDAQ:CTSH) was Pzena Investment Management of Richard S. Pzena which owns a $993 million stake in the company.
Number of Hedge Fund Holders: 36
Booz Allen Hamilton Holding Corporation (NYSE:BAH) provides consulting services, engineering, digital and analytics solutions to the government and private sector. Earlier this month, Morgan Stanley published a list of 20 defensive stocks with stable earnings. Booz Allen Hamilton Holding Corporation (NYSE:BAH) made it to the list.
As of the end of the last quarter of 2022, 36 hedge funds had stakes in Booz Allen Hamilton Holding Corporation (NYSE:BAH). The biggest hedge fund stakeholder of Booz Allen Hamilton Holding Corporation (NYSE:BAH) during this period was John Overdeck and David Siegel’s Two Sigma Advisors which owns a $30.3 million stake in the company.
Number of Hedge Fund Holders: 37
Hewlett Packard Enterprise Company (NYSE:HPE) is one of the biggest technology enterprise and consulting firms in the world. Recently Bernstein shared a list of its top 12 stock picks. Hewlett Packard Enterprise Company (NYSE:HPE) was one of these stocks. The investment firm believes Hewlett Packard Enterprise Company (NYSE:HPE) is cheap and has no risk of becoming a “value trap.”
As of the end of the fourth quarter of 2022, 37 hedge funds tracked by Insider Monkey had stakes in Hewlett Packard Enterprise Company (NYSE:HPE). The total value of these stakes was $1.3 billion. The most significant stakeholder of Hewlett Packard Enterprise Company (NYSE:HPE) during this period was Pzena Investment Management of Richard S. Pzena which owns a $469 million stake in the company.
In addition to International Business Machines Corp. (NYSE:IBM), Gartner Inc. (NYSE:IT) and Accenture Plc (NYSE:ACN), HPE is one of the best consulting stocks according to hedge funds.
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Disclosure: None. 13 Best Consulting Stocks to Buy Now is originally published on Insider Monkey.
