Long/short hedge funds are generally value investors. When they buy, they want to pay less than what a stock is worth. This doesn’t mean that hedge funds don’t invest in growth stocks with high PE ratios. Last summer, David Einhorn bought more than 800 thousand shares of Apple (AAPL), arguing that the stock’s PE ratio is extremely low compared to its growth prospects. Einhorn paid less than $250 per Apple share. There are several growth stocks that hedge funds think are undervalued.
We compiled the list of top 30 growth stocks where there are at least 70 hedge funds invested in the stock. The data source for Wall Street Analysts’ growth projections is Thomson Financial. Here are the top 30 stocks with the highest expected annual growth rates over the next 5 years that hedge funds are crazy about: