In this article, we will look at the 11 Best Strong Buy Growth Stocks to Buy According to Hedge Funds.
On January 16, Cathie Wood, Ark Invest CEO and CIO, appeared on CNBC’s ‘Squawk Box’ to talk about the 2026 outlook and the latest market trends.
She stated that one of the significant things the last few years have taught her is that while inflation is clearly coming down, it is stuck in the reported numbers. A lot of people, according to her, are wondering why this trend is still persisting with the market near record high valuations, and that makes for a setup for a correction. Looking at other periods in history, as in the 90s and early 2000s, we had very strong markets as the multiples moved down. Therefore, last year taught her that we must assume that valuations are going to compress, and she does assume that for the bottom-up analysis for every company.
READ ALSO: 12 Best Stocks to Buy in 2026 for Beginners AND 13 Best Long Term Growth Stocks to Buy According to Hedge Funds.
Wood further expressed excitement over the inflation outlook, thanks to oil prices, housing prices, and productivity gains, with unit labor costs coming down dramatically. While they were up 1.2% on a year-over-year basis, they were negative in the last quarter reported. Therefore, there are several deflationary pressures. She also cited technology in this backdrop, stating that her focus is exclusively on technologically-enabled innovation, and that each of the five major platforms is very deflationary in its impact. Wood thus believes that prices are going to be on the low side of inflation expectations.
With these trends in view, let’s look at the best strong buy growth stocks to buy according to hedge funds.
Our Methodology
We used stock screeners to find companies that satisfied the following criteria:
- EPS Diluted Growth (YoY) above 20%.
- EPS Diluted Growth (FWD, 1-year estimate) above 20%.
- Analyst Consensus Rating of Strong Buy.
We then selected the top 11 stocks with the highest number of hedge fund holders, as of Q3 2025. We sourced the hedge fund sentiment data from Insider Monkey’s database. The list is sorted in ascending order of hedge fund holders.
Note: All data was recorded on January 16.
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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
11 Best Strong Buy Growth Stocks to Buy According to Hedge Funds
11. Krystal Biotech, Inc. (NASDAQ:KRYS)
Number of Hedge Fund Holders: 26
Krystal Biotech, Inc. (NASDAQ:KRYS) is one of the best strong buy growth stocks to buy according to hedge funds. On January 12, Citi lifted the price target on Krystal Biotech, Inc. (NASDAQ:KRYS) to $336 from $320 and maintained a Buy rating on the shares. The rating update came after Krystal Biotech, Inc. (NASDAQ:KRYS) announced selected preliminary unaudited 2025 financial results on January 11, including fourth quarter and full year 2025 VYJUVEK® net product revenue.
For fiscal Q4 2025, the company announced that it expects net product revenue for VYJUVEK to be between $106 million and $107 million, based on preliminary unaudited financial information. VYJUVEK’s net revenue for the full year 2025 is anticipated to be between the range of $388 million and $389 million. Krystal Biotech, Inc. (NASDAQ:KRYS) further reported that cash, cash equivalents, and investments are around $955 million as of December 31, 2025.
The company clarified that the preliminary unaudited results are based on the initial analysis of operations conducted by the management for the year ended December 31, 2025, and are subject to adjustment. Krystal Biotech, Inc. (NASDAQ:KRYS) is set to report its full financial results for fiscal Q4 and full year 2025 in February 2026.
Krystal Biotech, Inc. (NASDAQ:KRYS) is a biotechnology company that develops and commercializes pharmaceutical products and offers the product VYJUVEK, which is a topical gel that treats wounds in adult and pediatric patients (from birth) with dystrophic epidermolysis bullosa (DEB).
10. Sportradar Group AG (NASDAQ:SRAD)
Number of Hedge Fund Holders: 31
Sportradar Group AG (NASDAQ:SRAD) is one of the best strong buy growth stocks to buy according to hedge funds. Wells Fargo cut the price target on Sportradar Group AG (NASDAQ:SRAD) to $26 from $30 on January 15 and maintained an Overweight rating on the stock. The firm told investors that it is slightly tweaking estimates on the company as it takes a more conservative approach to forward-year variable contract upside and IMG benefit.
Sportradar Group AG (NASDAQ:SRAD) also received a rating update from Truist Financial on January 13, which reiterated a Buy rating on the stock and set a price target of $20.35. In another development, Citizens cut the price target on Sportradar Group AG (NASDAQ:SRAD) to $34 from $36 on January 5 and maintained an Outperform rating on the shares.
The firm told investors that the past two years have highlighted the ongoing volatility in the sector, brought about by competition, regulation, and game outcomes. Despite that, the current valuations appear overly punitive, according to Citizens. It added that with average multiples depressed compared to historical averages, companies meeting or exceeding quarterly estimates with cash flow improvements are likely to drive upside.
Sportradar Group AG (NASDAQ:SRAD) provides sports betting and entertainment products and services, with its products including Betting Technology & Solutions and Sports Content, Technology & Services.
