We recently compiled a list of the 10 Best ASX Stocks to Buy According to Hedge Funds.In this article, we are going to take a look at where Mesoblast Limited (NASDAQ:MESO) stands against other best ASX stocks to buy according to hedge funds.
According to a report by the Australian Bureau of Statistics (ABS) published on December 4, 2024, the Australian economy grew by 0.3% in the September quarter of 2024, which marked the twelfth consecutive quarter of growth. This growth, however, was the lowest rate since the December quarter of 2020 after the COVID-19 pandemic. The report also noted that in nominal terms, GDP rose by 0.4%.
In terms of trade, a key indicator of the economy’s international competitiveness fell by 2.5% in the quarter. This decline was primarily due to a 2.6% drop in export prices and was the third consecutive quarterly fall. The weakening in global bulk commodity demand, particularly from China, significantly affected the prices of metallurgical coal and iron ore. Import prices also fell slightly by 0.1%, aligning with lower global oil prices.
However, public investment surged by 6.3% after three-quarters of decline, with government investment rising, driven by increased imports of defense equipment and investments in hospital and road projects. State and local public corporations also contributed to the rise, with increased activity on major road and renewable energy projects.
According to Morgan Stanley’s 2025 Outlook and Implications for Australian Investors, the outlook for Australian equities is optimistic, though it is expected to lag behind major developed markets, particularly the United States. Morgan Stanley has raised its year-end 2025 price target for the ASX 200 to 8500, reflecting a base case multiple of 17.0x and a forecasted 10% earnings per share growth over the next 12 months. Within the Australian market, Morgan Stanley favors sectors that are poised for strong performance, such as healthcare, technology, and consumer discretionary. These sectors are expected to benefit from secular growth trends and favorable macroeconomic conditions.
In the energy sector, Morgan Stanley anticipates lower crude oil prices in 2025 due to rising supply from both OPEC and non-OPEC producers, outpacing slowing demand growth. This could impact energy-related stocks and investments. Regarding metals, copper remains the top pick, driven by declining inventories and demand recovery at lower price levels. For gold, the outlook is more cautious, with limited upside expected despite potential tailwinds from rate cuts. According to the report, physical demand for gold is beginning to soften, which may dampen its appeal as a safe-haven asset.
The Australian economy continues its growth streak and sectors such as healthcare, technology, and consumer discretionary are positioned for strong performance.
Why Mesoblast Limited (MESO) Is the Best ASX Stock to Buy According to Hedge Funds?
A biotechnologist in a lab suit studying a syringe with a mesenchymal lineage cells inside.
Our Methodology
To compile our list of the 10 best ASX stocks to buy according to hedge funds, we used Finviz and Yahoo stock screeners to identify companies that are dual-listed in the United States and Australia. We then used Insider Monkey’s Hedge Fund database to rank 10 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).
Mesoblast Limited (NASDAQ:MESO) is an Australian biopharmaceutical company focused on developing allogeneic cellular medicines for inflammatory diseases. The company’s proprietary mesenchymal lineage cell therapy technology targets conditions such as chronic heart failure, chronic low back pain, and acute graft versus host disease. Mesoblast Limited (NASDAQ:MESO) collaborates with healthcare providers and research institutions to conduct clinical trials and bring their therapies to patients in need.
Mesoblast Limited’s (NASDAQ:MESO) flagship product, Remestemcel-L (Ryoncil), recently secured FDA approval for the treatment of steroid-refractory acute graft-versus-host disease (SR-aGVHD) in patients as young as two months old. With this FDA approval, Mesoblast Limited (NASDAQ:MESO) is entering a pivotal phase of commercialization. The company has been actively preparing for the product launch by building a specialized commercial team, engaging with key opinion leaders in the medical field, and forging partnerships with bone marrow transplant centers. These efforts are designed to facilitate a swift and effective market entry.
In addition to its initial approval, Mesoblast Limited (NASDAQ:MESO) is actively exploring further therapeutic applications for Remestemcel-L. A phase 3 study in adult patients with SR-aGVHD is set to commence shortly following the pediatric approval. Moreover, the company is evaluating Remestemcel-L’s potential for treating inflammatory bowel disease (IBD), a widespread condition affecting millions globally.
Overall MESO ranks 7th on our list of the best ASX stocks to buy according to hedge funds. While we acknowledge the potential of MESO 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 MESO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
