In this article, we will take a detailed look at the17 High Growth Non-Tech Stocks That Are Profitable. For a quick overview of such stocks, read our article 5 High Growth Non-Tech Stocks That Are Profitable.
Technology stocks, especially the Magnificent Seven group of stocks, absolutely rocked in 2023 thanks to the AI-fueled rally. While the enthusiasm around AI is just getting started, many analysts believe in 2024 the broader market gains enjoyed by tech stocks last year will expand to other sectors while mega-cap tech stocks will take a back seat. Delano Saporu, Founder and CEO of New Street Advisors Group, while talking to CNBC earlier this month said that Magnificent Seven stocks are expected to take a breather in 2024 while market gains will broaden out to other sectors.
Recently, Jim Cramer also talked about his forecasts for 2024 and said that there is a market rotation going on right now in which money managers are taking profits by selling major technology stocks like Apple Inc (NASDAQ:AAPL), Amazon.com Inc (NASDAQ:AMZN) and NVIDIA Corp (NASDAQ:NVDA) and investing this money into other sectors like financials, healthcare and small-cap companies which remained on the back burner in 2023.
David Katz, chief investment officer at Matrix Asset Advisors, also thinks that Magnificent Seven stocks are not expected to always outperform and investors should look beyond these stocks in 2024. Discussing his portfolio performance on CNBC, Katz said over the past two years Magnificent Seven stocks on average are up just about 8%. He said that for 2024 he’s expecting the laggards of 2023 to “catch up.”
In this backdrop, it’s important to take a look at some of the top non-tech stocks that have been posting high revenue growth over the past few months and years.
For this article we first used a stock screener to identify profitable non-tech companies with about 20%+ quarter-over-quarter revenue growth recently and over 20% revenue growth over the past five years. From these companies we selected 17 companies with the highest number of hedge fund investors.
With 38 hedge funds having stakes in it, Indian banking company HDFC Bank Ltd (NYSE:HDB) ranks 16th in our list of the best high-growth non-tech stocks to buy according to smart money investors.
Recently, UBS published its list of top global stock picks for 2024. HDFC Bank Ltd (NYSE:HDB) made it to the list. UBS said lower rates and “resilient earnings” are expected to help global equities in 2024.
Texas-based Tidewater Inc (NYSE:TDW) is one of the best high-growth non-tech stocks to buy according to smart money investors.
As of the end of the third quarter of 2023, 39 hedge funds out of the 910 funds tracked by Insider Monkey reported having stakes in Tidewater Inc (NYSE:TDW). The most significant stakeholder of Tidewater Inc (NYSE:TDW) during this period was Dmitry Balyasny’s Balyasny Asset Management which owns an $82 million stake in Tidewater Inc (NYSE:TDW).
Many analysts believe small- and mid-cap stocks like TDW are headed for a rebound in 2024 while mega-cap tech stocks like Apple Inc (NASDAQ:AAPL), Amazon.com Inc (NASDAQ:AMZN) and NVIDIA Corp (NASDAQ:NVDA) will take a breather.
Third Avenue Small-Cap Value Fund made the following comment about Tidewater Inc. (NYSE:TDW) in its Q3 2023 investor letter:
“Finally, long-time holding, offshore oil services company, Tidewater Inc. (NYSE:TDW) rose 31% in the quarter, as more investors and operators recognized the importance of investing in fossil fuels to sustain long-term economic growth and national security. In a challenging environment for most asset classes, Energy was a considerable outperformer this past quarter, illustrating the potency of the investor pivot.”
Entertainment company Live Nation Entertainment Inc (NYSE:LYV) shares have gained about 23% over the past six months. In December, Live Nation Entertainment Inc (NYSE:LYV) received several upgrades and bullish comments from Wall Street firms. Among the Wall Street firms bullish on the stock is Morgan Stanley, whose analyst Cameron Mansson-Perrone said the stock’s valuation is attractive. The analyst said Live Nation Entertainment Inc (NYSE:LYV) has lagged the market by 2,000 basis points since the end of 2021 despite return on capital improvements.
A total of 40 hedge funds out of the 910 funds in Insider Monkey’s database had stakes in Live Nation Entertainment Inc (NYSE:LYV) as of the end of the September quarter.
Baron Discovery Fund made the following comment about Live Nation Entertainment, Inc. (NYSE:LYV) in its Q3 2023 investor letter:
“Liberty Media Corporation-Liberty Live is a tracking stock created on 8/4/2023 representing Liberty Media Corporation’s holdings in Live Nation Entertainment, Inc. (NYSE:LYV) shares. Those holdings were previously attributed to Liberty SiriusXM and reattributed to a the newly created Liberty Live Group vehicle to reduce the complexity of the Liberty SiriusXM structure and make way for its potential combination with the underlying SiriusXM business. We believe the separation created some selling pressure on Liberty Live, creating an attractive discount of over 40% to the underlying value of its Live Nation holdings, and we took advantage of that discount to build a position. The Liberty Live Group is a small-cap vehicle through which we can own the underlying Live Nation business, which we have tracked and liked for years. Live Nation has significant competitive advantages in the live entertainment industry due to its unique combination of concert promotion, ticketing, venue management, and sponsorship businesses, which create a market share flywheel and margin structure that is difficult for competitors in any one of these underlying sub-segments to replicate independently. In addition to the upside we see in Live Nation, we think Liberty Live Group could eventually transition from a tracking stock to an asset-backed vehicle, which would pave the way for a structure consolidation with Live Nation and allow us to capture the current wide NAV discount.”
Insurance company Renaissancere Holdings Ltd (NYSE:RNR) ranks 13th in our list of the best high-growth non-tech stocks to buy according to smart money investors. In November Renaissancere Holdings Ltd (NYSE:RNR) posted third quarter results. Adjusted EPS in the period came in at $8.33, beating estimates by $2.21. Revenue in the quarter increased by about 42.6% year over year to $1.84 million, beating estimates by $40 million.
As of the end of the third quarter of 2023, 41 hedge funds tracked by Insider Monkey had stakes in Renaissancere Holdings Ltd (NYSE:RNR).
TimesSquare Capital U.S. Mid Cap Growth Strategy made the following comment about RenaissanceRe Holdings Ltd. (NYSE:RNR) in its Q3 2023 investor letter:
“In Financials, we prefer well-placed insurance companies and niche businesses while tending to avoid banks which face credit deterioration and rising deposit costs. RenaissanceRe Holdings Ltd. (NYSE:RNR), a provider of reinsurance and insurance products, surged ahead by 6%. Its second quarter numbers were solid across underwriting, property catastrophe premiums, investment income, and fee income. While there was an impact from severe storms during the quarter, RenRe’s losses were modest.”
In December, Goldman Sachs published a list of high-growth stocks that it believes have attractive valuations. Royal Caribbean Cruises Ltd (NYSE:RCL) made it to this list.
A total of 41 hedge funds out of the 910 funds tracked by Insider Monkey were long Royal Caribbean Cruises Ltd (NYSE:RCL) as of the end of the September quarter. The most significant stake in Royal Caribbean Cruises Ltd (NYSE:RCL) is owned by D. E. Shaw’s D E Shaw which owns a $443 million stake.
Ariel Fund made the following comment about Royal Caribbean Cruises Ltd. (NYSE:RCL) in its Q2 2023 investor letter:
“Several stocks in the portfolio had strong returns over the period. Global cruise vacation company, Royal Caribbean Cruises Ltd. (NYSE:RCL), was one of the top 3 performers in the S&P 500 during the quarter. Shares surged following a significant top- and bottom-line earnings beat, as stronger than anticipated consumer demand is driving a record WAVE season. Forward booking trends are also ahead of historical ranges at record pricing. These factors combined with further improvement in onboard spend and solid cost containment led management to increase RCL’s full-year 2023 guidance. We believe the revised revenue and earnings outlook lays the foundation for RCL to exceed its’ three-year strategic imperative, the Trifecta Program.”
Insulin delivery systems company Insulet Corporation (NASDAQ:PODD) 11th in our list of the best high-growth non-tech stocks to invest in according to hedge funds. In November Insulet Corporation (NASDAQ:PODD) posted strong third quarter results. Adjusted EPS in the quarter came in at $0.71, beating estimates by $0.30. Revenue in the period jumped 27% year over year to $432.7 million, beating estimates by $18.5 million.
Carillon Scout Mid Cap Fund made the following comment about Insulet Corporation (NASDAQ:PODD) in its Q3 2023 investor letter:
“Insulet Corporation (NASDAQ:PODD), the diabetes management device company, was the second largest detractor to portfolio performance. The company was hit by negative sentiment regarding GLP-1 agonists and their potential to reduce the number of type 2 diabetics on insulin therapy. Type 1 diabetes has become increasingly prevalent, which could offset the lower outlook for cases of type 2 diabetes, but the market ignored this development.”
Healthcare company Lantheus Holdings Inc (NASDAQ:LNTH) ranks 10th in our list of the best high-growth non-tech stocks to invest in according to hedge funds. During the third quarter, Lantheus Holdings Inc’s (NASDAQ:LNTH) revenue jumped 33.7% year over year to $319.9 million, surpassing estimates by $5.48 million.
A total of 44 hedge funds in Insider Monkey’s database had stakes in Lantheus Holdings Inc (NASDAQ:LNTH).
ClearBridge Small Cap Growth Strategy made the following comment about Lantheus Holdings, Inc. (NASDAQ:LNTH) in its Q3 2023 investor letter:
“We also made an investment in Lantheus Holdings, Inc. (NASDAQ:LNTH), which offers a portfolio of diagnostic health care products, primarily serving the complex nuclear imaging market. The company also has a pipeline of disruptive nuclear therapeutics (radiopharmaceuticals), creating a unique combination of strong profitability and cash flow generation with attractive growth opportunities in pipeline and existing products. The operational and logistical challenges of operating in nuclear medicine provide Lantheus a durable moat in this emerging therapeutic market.”
Management consulting company Everest Group Ltd (NYSE:EG) was one of the stocks in the list of high-growth stocks trading at attractive valuations published by Goldman Sachs’ U.S. Weekly Kickstart in December. Goldman Sachs said these stocks are suitable for those looking for high growth but are “wary” of valuations.
8. First Citizens BancShares Inc (Delaware) Class A (NASDAQ:FCNCA)
Number of Hedge Fund Investors:46
First Citizens BancShares Inc’s (Delaware) Class A (NASDAQ:FCNCA) revenue in the third quarter increased by a whopping 111% on a YoY basis. In October First Citizens BancShares Inc (Delaware) Class A (NASDAQ:FCNCA) upped its dividend by a massive 118%.
As of the end of the third quarter of 2023, 46 hedge funds tracked by Insider Monkey had stakes in First Citizens BancShares Inc (Delaware) Class A (NASDAQ:FCNCA).
Many analysts believe bank stocks are set to gain in 2024 while major tech stocks like Apple Inc (NASDAQ:AAPL), Amazon.com Inc (NASDAQ:AMZN) and NVIDIA Corp (NASDAQ:NVDA) will take a breather this year.
Gator Capital Management made the following comment about First Citizens BancShares, Inc. (NASDAQ:FCNCA) in its Q3 2023 investor letter:
“The Fund’s largest position is First Citizens BancShares, Inc. (NASDAQ:FCNCA) (“First Citizens” or “FCNCA”). We acquired our stake over the past three years. Initially, we owned and traded around a small position in CIT Group Inc. (“CIT”) during the summer of 2020. We felt CIT was undervalued and management was making progress in reducing risk during the Covid-19 pandemic. In late 2020, CIT agreed to be acquired by First Citizens. We added to our CIT stake the morning of the acquisition announcement because we thought the acquisition was so financially attractive that First Citizens’ shares would rally and pull CIT’s shares higher. Our CIT shares were exchanged for First Citizens shares when the merger completed. We held onto our First Citizens shares because we admired the management team, we felt the bank was undervalued, and we projected the bank would benefit from higher interest rates. Then, earlier this year, First Citizens was the winning bidder in the FDIC’s auction of the failed Silicon Valley Bank (“SVB”). We added significantly to the Fund’s First Citizens position on the following Monday morning because the deal was unbelievably favorable for First Citizens.
Interactive Brokers Group, Inc. (NASDAQ:IBKR) ranks 7th in our list of the best high-growth non-tech stocks to buy according to hedge funds.
As of the end of the third quarter of 2023, 46 hedge funds in Insider Monkey’s database of 910 hedge funds had stakes in Interactive Brokers Group, Inc. (NASDAQ:IBKR). The most notable hedge fund stakeholder of Interactive Brokers Group, Inc. (NASDAQ:IBKR) was William B. Gray’s Orbis Investment Management which owns a $705 million stake in Interactive Brokers Group, Inc. (NASDAQ:IBKR).
TimesSquare Capital U.S. Mid Cap Growth Strategy made the following comment about Interactive Brokers Group, Inc. (NASDAQ:IBKR) in its Q3 2023 investor letter:
“In Financials, we prefer well-placed insurance companies and niche businesses while tending to avoid banks which face credit deterioration and rising deposit costs. Interactive Brokers Group, Inc. (NASDAQ:IBKR) operates as an automated electronic broker worldwide. Their company’s second quarter net interest income came in better than expected while revenues were slightly ahead. Earnings, however, fell short of sell-side projections due to a one-time legal reserve. The market looked past this blemish as its stock price gained 4%.”
6. Heico Corp (NYSE:HEI)
Number of Hedge Fund Investors: 46
Aerospace and electronics company Heico Corp (NYSE:HEI) shares have gained about 10% over the past one year. In December Heico Corp (NYSE:HEI) posted its fourth quarter results, which shows a 53% YoY increase in revenues.
Out of the 910 hedge funds in Insider Monkey’s database of 910 hedge funds, 46 hedge funds had stakes in Heico Corp (NYSE:HEI).
