In this article, we discuss the 11 Best Rebound Stocks to Buy According to Hedge Funds.
Following ongoing market uncertainty over tariffs and inflation, U.S. equities climbed to record highs on August 12, 2025, injecting a dose of optimism. A cooler-than-expected inflation report came out, reigniting hopes of the Federal Reserve’s interest rate cut, which is expected to occur as soon as September. This sets the stage for a potential rebound in stocks that have suffered in 2025 so far.
An increase of 1.13% was noted for the S&P 500, which closed at 6,445.76. Meanwhile, the Nasdaq Composite climbed 1.39% to close at 21,681.90. Similarly, the Dow Jones Industrial Average rose by 483 points, with small-cap stocks, which are the biggest beneficiaries of lower borrowing costs, leading the charge. Interestingly, the Russell 2000 nearly tripled the S&P’s gains. While core CPI increased by 3.1% year-over-year, slightly exceeding expectations, investors remained focused on the overall CPI, which remained softer. Furthermore, the absence of major tariff-related price spikes fueled the optimism.
According to CME FedWatch data, the probability of rate cuts in September now stands at 94%. Looking beyond September, investors are now expecting cuts later in the year as well.
Thus, the improving macroeconomic dynamics could potentially act as a catalyst for quality rebound stocks, helping them recover losses and potentially deliver significant gains. With this backdrop in mind, let’s move on to our list of the 11 Best Rebound Stocks to Buy According to Hedge Funds.
A CEO in his office overlooking a sky-scraper skyline, symbolising the company’s ambition for growth in the market.
Methodology
To curate our list of the 11 Best Rebound Stocks to Buy According to Hedge Funds, we used the Finviz screener to extract a list of companies that are down on a year-to-date basis. Next, we ranked these stocks in ascending order based on the number of hedge funds holding stakes in each stock, as of Q1 2025. We assessed the hedge fund sentiment across the stocks using Insider Monkey’s hedge fund database, which tracks over 1,000 hedge funds.
Why are we interested in the stocks that hedge funds pile into? 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
11. KKR & Co. Inc. (NYSE:KKR)
Year-To-Date Decline in Share Price: 0.46%
Number of Hedge Fund Holders: 88
With a year-to-date decline in share price, along with strong hedge fund interest, KKR & Co. Inc. (NYSE:KKR) secures a place on our list of the 11 Best Rebound Stocks to Buy According to Hedge Funds.
Following the company’s second-quarter earnings release, Barclays raised its price target on KKR & Co. Inc. (NYSE:KKR) from $155 to $165 on August 1, 2025, maintaining an ‘Overweight’ rating. The company’s EPS beat boosted the analyst’s confidence. While the analyst acknowledged the company’s cautious second-half guidance, the long-term growth outlook remains strong.
Meanwhile, on August 4, 2025, KBW reiterated its ‘Buy’ rating on KKR & Co. Inc. (NYSE:KKR) with a $162 target. The analyst remains confident in the company’s growth trajectory, following strong Q2 results. Despite short-term uncertainties, analyst sentiment remains positive, thanks to the company’s diversified investment strategy.
Specializing in acquisitions, leveraged buyouts, and growth equity, KKR & Co. Inc. (NYSE:KKR) operates as a private equity and real estate investment firm. It is included in our list of the Best Rebound Stocks To Buy.
10. The Procter & Gamble Company (NYSE:PG)
Year-To-Date Decline in Share Price: 7.64%
Number of Hedge Fund Holders: 88
The Procter & Gamble Company (NYSE:PG) is included in our list of the 11 Best Rebound Stocks to Buy According to Hedge Funds.
Following the company’s fourth-quarter results, UBS reiterated its ‘Buy’ rating with a $180 price target on July 30, 2025. The Procter & Gamble Company (NYSE:PG)’s underlying sales growth guidance of 2.5%-4.5%, alongside EPS growth of 5%-7%, fueled the analyst’s optimism. This update comes despite a post-earnings pullback driven by one-time pressures, which include a Mexico joint venture exit and normalized incentive compensation.
Looking ahead, the analyst keeps its bullish stance due to improving U.S. local case volumes and long-term growth potential through sales force expansion, AI 360 CRM, pricing agility, and Perks 2.0. Meanwhile, on the same day, Truist Financial also maintained its ‘Buy’ rating on The Procter & Gamble Company (NYSE:PG). In contrast, Barclays maintained its ‘Hold’ rating on the company on July 29, reflecting a more cautious stance.
The Procter & Gamble Company (NYSE:PG) offers branded consumer packaged goods globally, serving beauty, grooming, health care, fabric & home care, and baby, feminine & family care segments. It is included in our list of the Best Rebound Stocks To Buy.
9. Exxon Mobil Corporation (NYSE:XOM)
Year-To-Date Decline in Share Price: 1.35%
Number of Hedge Fund Holders: 94
With a year-to-date decline in share price, along with strong hedge fund interest, Exxon Mobil Corporation (NYSE:XOM) secures a place on our list of the 11 Best Rebound Stocks to Buy According to Hedge Funds.
On August 8, 2025, Goldman Sachs maintained its ‘Neutral’ rating on Exxon Mobil Corporation (NYSE:XOM) with a $117 price target. The cautious stance is attributed to broader macroeconomic concerns. Uncertainty stems from under-pressure sectors such as paper and pulp, where North American volumes slid 6% excluding a Georgetown mill closure.
The investment firm believes the global economic uncertainties could impact energy demand, alongside other cyclical industries. At the same time, Goldman Sachs remains confident in Exxon Mobil Corporation (NYSE:XOM)’s fundamentals, recognizing its scale and resilience.
Operating through its Upstream, Energy Products, Chemical Products, and Specialty Products segments, Exxon Mobil Corporation (NYSE:XOM) is engaged in the exploration and production of crude oil and natural gas globally. It is included in our list of the Best Rebound Stocks To Buy.
