In this article, we will take a look at 11 High Profit Margin Stocks to Buy According to Hedge Funds.
US equities fell on March 19, with oil prices falling as Wall Street awaited the latest news on the Iran conflict. The drop came after crude futures rose as high as 10% to $119 per barrel as Iran and Israel conducted attacks on critical oil and gas infrastructure. The intensification of hostilities fueled fears of more serious repercussions from the conflict than anticipated. Meanwhile, markets had been wrestling with rising inflation estimates from the Federal Reserve, which lowered expectations for interest rate cuts.
Given that markets seem to be dismissing any rate cuts this year, analysts at Macquarie suspect the Fed’s next move will be in the opposite direction. In notes released before and after the Fed meeting, the firm stated that it believes inflationary pressures are growing and will compel the Fed to raise interest rates sometime next year. Regarding this, the firm stated the following:
“We see the next move as a hike. However, with more mixed signals from the labor market and the potential for consumer headwinds near-term from higher oil, we have now pushed out this timing to 1H27.”
With that backdrop, let’s explore our list of high profit margin stocks to buy according to hedge funds.
Our Methodology
For this list, we used stock screeners to compile a list of companies with a net profit margin above 25%, signaling strong operational efficiency and pricing power. These stocks are also popular among analysts and elite 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 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
11. Trip.com Group Limited (NASDAQ:TCOM)
Trip.com Group Limited (NASDAQ:TCOM) ranks among the best high profit margin stocks to buy. On February 26, Barclays reduced its price target for Trip.com Group Limited (NASDAQ:TCOM) to $75 from $90 while retaining an Overweight rating on the company’s stock. The firm stated that both revenues and earnings came in somewhat higher than originally expected.
Trip.com Group Limited (NASDAQ:TCOM) beat analyst expectations with earnings per share of $4.97, compared to $4.77. In addition, the company generated $15.4 billion in revenue, which exceeded the predicted $14.86 billion. However, the slightly higher revenues were partially offset by marginally higher fourth-quarter expenses, while gross margins were stable at 81%.
Trip.com demonstrated particularly strong growth, with foreign reservations up 60% year-over-year in 2025 and 2026 to date, as well as in outbound travel. Management also issued a positive first-quarter outlook, citing sustained momentum experienced quarter-to-date, particularly with regard to Chinese New Year travel demand.
Global travel service company Trip.com Group Limited (NASDAQ:TCOM) provides end-to-end solutions for the corporate travel, lodging, tour, and transportation sectors.