We recently published a list of 10 Best Extremely Profitable Stocks to Buy Now. In this article, we are going to take a look at where Futu Holdings Limited (NASDAQ:FUTU) stands against other best extremely profitable stocks to buy now.
Can the S&P Hit 7,000 By the End of 2025?
Ed Yardeni, president of Yardeni Research, appeared on CNBC on November 27 to share insights on the market’s anticipated performance in 2025. He emphasized the significance of staying invested despite existing risks and high valuations, noting that the economy has shown resilience and interest rates have stabilized.
Yardeni pointed out that many new investors are gravitating toward small and mid-cap sectors, which he considers a sound strategy due to their relative affordability. He also highlighted the S&P 493 stocks as being undervalued compared to the Magnificent Seven, asserting that the overall market outlook remains positive despite potential tariff fluctuations. He believes that tax cuts and deregulation could enhance corporate earnings.
Yardeni attributed much of the market’s potential growth to an ongoing productivity boom, which he described as still being in its early stages. He noted that productivity levels have improved significantly from nearly zero in 2015 to around 2% currently, with historical precedents suggesting that such booms can reach as high as 4%. This improvement is driven by advancements in technology, which he argues will continue to drive productivity gains.
READ ALSO: 10 Most Promising New Technology Stocks According to Hedge Funds and 10 Best Tech Stocks to Invest In On the Dip.
When discussing whether this boom is primarily driven by artificial intelligence (AI), Yardeni acknowledged AI’s importance but also pointed to other technological advancements in cloud computing, robotics, and automation as contributing factors.
He identified a shortage of skilled labor as a key driver of productivity growth and explained that technology has enhanced efficiency, allowing wages to rise faster than prices, thus stimulating economic activity. In his concluding remarks, Yardeni projected that the S&P 500 could reach 7,000 by the end of 2025 and potentially hit 10,000 by the end of the decade, reflecting his bullish outlook on market performance fueled by these economic dynamics.
A brokerage employee huddled with a group of retirees discussing retirement portfolios.
Our Methodology
To compile the list of the 10 best extremely profitable stocks to buy now, we used the Finviz stock screener, Yahoo Finance, and Seeking Alpha. Using the screener, we shortlisted stocks that have grown their revenue and net income by at least 25% over the past 5 years. After sorting our initial list by market cap, we cross-checked the revenue and net income growth rates from Seeking Alpha. We also considered the trailing twelve-month net income and selected stocks that had a trailing twelve-month net income of more than $500 million. Lastly, we ranked the stocks in ascending order based on the number of hedge fund holders in Q3 2024, sourced from Insider Monkey’s database.
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).
Futu Holdings Limited (NASDAQ:FUTU)
5 Year Revenue Growth: 62.46%
5 Year Net Income Growth: 94.49%
TTM Net Income: $548.6 Million
Number of Hedge Fund Holders: 29
Futu Holdings Limited (NASDAQ:FUTU) is a tech-driven online brokerage and wealth management platform based in Hong Kong. The company offers a platform called Futu NiuNiu, where users can buy and sell various financial products like stocks, options, and exchange-traded funds (ETFs) online.
The brokerage serves customers in key countries including the US, China, Hong Kong, Singapore, Australia, Japan, and more. It is one of the best extremely profitable stocks to buy now. Not only has Futu Holdings Limited (NASDAQ:FUTU) grown its top line and bottom line by 62% and 94% over the past 5 years, respectively, but its trailing twelve-month net income stands at $548.6 million.
As the overall economic conditions around the world are easing with Federal Reserves cutting interest rates, brokerage firms like Futu Holdings Limited (NASDAQ:FUTU) are rallying. The stock price of the company rallied more than 72% for two weeks from the day China Stimulus was announced.
While short-term price movements are encouraging, what’s more impressive is its third-quarter results for fiscal 2024. The company reported that its number of paying clients rose by 33.1% year-over-year, to reach 2.2 million. Whereas, its registered clients increased by 22.8% to reach 4.3 million. As a result, its total client assets surged by 48.1% to approximately HK$693.4 billion ($89 billion), with daily average client assets at HK$593.2 billion ($76.27 billion), up 23.4% from the previous year.
Futu’s CEO, Leaf Hua Li, noted that the company experienced robust growth in established markets like Hong Kong and Singapore, while Malaysia remained the top contributor to new paying clients. He emphasized the effectiveness of their marketing strategies and product offerings in attracting clients.
Overall, FUTU ranks 7th on our list of best extremely profitable stocks to buy now. While we acknowledge the potential of FUTU to grow, 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 FUTU 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.