In this article, we discuss the 13 Best Diversified Stocks to Buy According to Hedge Funds.
For investors seeking stability and growth across multiple industries, diversified and conglomerate stocks have become a key focus. When asked by Forbes about the global landscape and its impact on investment strategies, experts, including Onuekwusi, Kasim Zafar, and EQ Investors, highlighted how geopolitical tensions, including U.S.-China rivalry and unrest in the Middle East, continue to instill uncertainty in the market. Accordingly, diversification has become increasingly relevant within portfolio creation, as it allows investors to reduce the effect of market volatility and unexpected events on their portfolios.
For achieving broad diversification at low cost, Exchange-traded funds (ETFs) have emerged as a practical tool. For instance, Vanguard’s S&P 500 ETF replicates the performance of the entire S&P 500 with minimal fees. As of the close of day on September 23, 2025, the S&P 500 stood at 6,693.75, the Nasdaq Composite rested at 22,788.98, and the Dow Jones Industrial Average hit 46,381.54, all reaching record highs.
A real-life example of a successful diversification strategy is Berkshire Hathaway Inc., which now commands a market value of $1.07 trillion and demonstrates the potential strength of multi-industry portfolios. Going forward, investors may be pushed toward creating resilient portfolios by blending ETFs, individual diversified stocks, and alternative asset classes that balance growth, security, and long-term wealth creation.
Against this backdrop, let’s jump to our list of the 13 Best Diversified Stocks to Buy According to Hedge Funds.
Our Methodology
To curate our list of the 13 Best Diversified Stocks to Buy According to Hedge Funds, we used the Finviz screener to extract a list of companies with multiple product lines and revenue streams. Next, we ranked these stocks according to their hedge fund sentiment data, which was taken from Insider Monkey’s hedge fund database that tracks nearly 1,000 hedge funds. Our list of the 13 Best Diversified Stocks to Buy According to Hedge Funds is presented in ascending order based on the number of hedge funds holding stakes in each stock as of Q2 2025.
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).
13. DMC Global Inc. (NASDAQ:BOOM)
Number of Hedge Fund Holders: 14
DMC Global Inc. (NASDAQ:BOOM) is one of the 13 Best Diversified Stocks to Buy According to Hedge Funds.
On September 16, 2025, Stifel reiterated its ‘Hold’ rating on DMC Global Inc. (NASDAQ:BOOM) with a $8.50 price target. The investment firm cited the company’s strong second-quarter performance and solid liquidity despite ongoing constraints in U.S. land activity.
Furthermore, Stifel highlighted the Arcadia segment’s cost-reduction initiatives and focus on core commercial markets as key growth drivers for the company’s strong earnings. Additionally, the investment firm sees better-than-expected results from DynaEnergetics as another key contributor to the company’s earnings beat.
Looking ahead, Stifel believes that DMC Global Inc. (NASDAQ:BOOM)’s performance in the upcoming quarters may be on the lower end due to commodity prices. Still, the company’s ability to consistently exceed forecasts supports its valuation and the maintained price target.
With its Arcadia, DynaEnergetics, and NobelClad segments, DMC Global Inc. (NASDAQ:BOOM) offers engineered products and solutions across construction, energy, industrial processing, and transportation markets globally. It is one of the Best Diversified Stocks.
12. Deluxe Corporation (NYSE:DLX)
Number of Hedge Fund Holders: 17
With significant upside potential, Deluxe Corporation (NYSE:DLX) secures a spot on our list of the 13 Best Diversified Stocks to Buy According to Hedge Funds.
On September 12, 2025, Deluxe Corporation (NYSE:DLX)’s William Zint, who is the Chief Financial Officer, purchased 175 shares of the company’s stock at $19.13 per share. The purchase totals $3,347 under a pre-arranged trading plan.
This insider purchase reflects confidence in Deluxe Corporation (NYSE:DLX)’s ongoing operations and strategic initiatives. It is one of the Best Diversified Stocks.
Deluxe Corporation (NYSE:DLX) delivers technology-enabled solutions across Merchant Services, B2B Payments, Data Solutions, and Print segments. It serves small- and medium-sized businesses and financial institutions.
11. TETRA Technologies, Inc. (NYSE:TTI)
Number of Hedge Fund Holders: 25
TETRA Technologies, Inc. (NYSE:TTI) is one of the 13 Best Diversified Stocks to Buy According to Hedge Funds.
On September 19, 2025, Stifel reiterated its ‘Buy’ rating on TETRA Technologies, Inc. (NYSE:TTI). The investment firm cited the company’s growth potential in completion fluids, water management, and related energy services. Furthermore, TTI’s strong sales prospects for the PureFlow product line were also cited.
The investment firm also noted that the upcoming Analyst Day in New York could provide updates on TETRA Technologies, Inc. (NYSE:TTI)’s desalination projects, bromine and lithium opportunities, and deepwater fluid initiatives. Moreover, the bullish stance follows the company’s strong second-quarter 2025 earnings, which surpassed expectations with EPS of $0.09 versus $0.08 and revenue of $174 million against forecasts of $173.65 million.
With its Completion Fluids & Products and Water & Flowback Services segments, TETRA Technologies, Inc. (NYSE:TTI) provides energy services and solutions. It serves the oil and gas industry across the U.S., Latin America, Europe, Asia, the Middle East, and Africa. It is one of the Best Diversified Stocks.
10. MDU Resources Group, Inc. (NYSE:MDU)
Number of Hedge Fund Holders: 29
With significant upside potential, MDU Resources Group, Inc. (NYSE:MDU) secures a spot on our list of the 13 Best Diversified Stocks to Buy According to Hedge Funds.
On September 19, 2025, Jefferies upgraded MDU Resources Group, Inc. (NYSE:MDU) from ‘Hold’ to ‘Buy’, raising its price target from $18 to $20. The investment firm cited the company’s attractive valuation and growth potential.
Even after factoring potential benefits from the Bakken East Pipeline project, MDU Resources Group, Inc. (NYSE:MDU) is seen as undervalued relative to its core business, the investment firm notes. Jefferies also highlighted the company’s healthy dividend yield of 3.48% and consistent earnings growth of 6-8% annually. The analyst also noted that the path for the company’s regulated energy delivery operations is clear as uncertainty following the spin-off subsides. Looking ahead, an upcoming pipeline announcement is seen as a potential catalyst for the stock to be re-rated by the market, the brokerage noted.
With its Electric, Natural Gas Distribution, and Pipeline segments, MDU Resources Group, Inc. (NYSE:MDU) provides regulated energy delivery services across the U.S. It is one of the Best Diversified Stocks.
9. Otter Tail Corporation (NASDAQ:OTTR)
Number of Hedge Fund Holders: 31
Otter Tail Corporation (NASDAQ:OTTR) is one of the 13 Best Diversified Stocks to Buy According to Hedge Funds.
On August 29, 2025, Moody’s lowered the credit rating of Otter Tail Corporation (NASDAQ:OTTR)’s utility subsidiary, Otter Tail Power Company. The credit rating firm cited the company’s higher spending on projects and increased borrowing. Yet the outlook remains stable. This follows the company’s strong second-quarter results that beat expectations.
Otter Tail Corporation (NASDAQ:OTTR) reported diluted EPS of $1.85 versus a forecast of $1.72 and revenue of $333.04 million versus a forecast of $325.8 million. Following the earnings release, the company’s share price rose 6.14% to $76.22, driven by a solid cash position and an increase in its 2025 earnings guidance. Looking ahead, Otter Tail Corporation remains on an upward trajectory with a focus on renewable energy projects and strategic investments in manufacturing.
With Electric, Manufacturing, and Plastics segments, Otter Tail Corporation (NASDAQ:OTTR) engages in electric utility, manufacturing, and plastic pipe businesses. It is one of the Best Diversified Stocks.
8. Valmont Industries, Inc. (NYSE:VMI)
Number of Hedge Fund Holders: 35
With significant upside potential, Valmont Industries, Inc. (NYSE:VMI) secures a spot on our list of the 13 Best Diversified Stocks to Buy According to Hedge Funds.
On September 11, 2025, Valmont Industries, Inc. (NYSE:VMI) reached an all-time high of $384.84, marking a 31.42% return over the past year. This surge is driven by the strong investor confidence in the company’s diversified manufacturing operations serving infrastructure and agriculture markets.
The company’s steady cash flows and a 47-year record of consistent dividend payments further boost investor sentiment. The optimism also stems from Valmont Industries, Inc. (NYSE:VMI)’s strategic initiatives, including targeted capital investments and efficient cost management, allowing the company to capitalize on favorable market conditions.
With its Infrastructure and Agriculture segments, Valmont Industries, Inc. (NYSE:VMI) manufactures products and provides services for infrastructure and agriculture markets in the U.S., Australia, Brazil, and other international markets. It is one of the Best Diversified Stocks.
7. Emerson Electric Co. (NYSE:EMR)
Number of Hedge Fund Holders: 67
Emerson Electric Co. (NYSE:EMR) is one of the 13 Best Diversified Stocks to Buy According to Hedge Funds.
On September 23, 2025, Emerson Electric Co. (NYSE:EMR) launched Guardian Virtual Advisory, an AI-powered software solution. The software is designed to optimize industrial automation systems and improve operational efficiency, allowing users to input natural language questions and receive immediate answers along with relevant reference materials. It currently supports DeltaV distributed control systems and is planned for the AMS and Ovation platforms.
Utilizing over two decades of data from Emerson Electric Co. (NYSE:EMR)’s Guardian Digital Platform, the solution addresses inefficiencies in industrial operations. The software solution targets a market that is estimated by Frost & Sullivan to experience over $1 trillion in global operational losses.
With its Final Control, Measurement & Analytical, Discrete Automation, Safety & Productivity, Control Systems & Software, and Test & Measurement segments, Emerson Electric Co. (NYSE:EMR) delivers technology and software solutions for industrial automation. It is one of the Best Diversified Stocks.
6. Honeywell International Inc. (NASDAQ:HON)
Number of Hedge Fund Holders: 67
Honeywell International Inc. (NASDAQ:HON) is one of the 13 Best Diversified Stocks to Buy According to Hedge Funds.
On September 17, 2025, UBS reiterated its ‘Buy’ rating on Honeywell International Inc. (NASDAQ:HON) with a $268 price target. This comes as the company undertakes a major transformation aimed at emerging as a pure-play building and industrial automation company.
The investment firm cited Honeywell International Inc. (NASDAQ:HON)’s Solstice spin-off, alongside the projected Aerospace spin-off around the same time next year. The anticipated aerospace spin-off is expected to generate over $20 billion in revenue for the remaining company and support 5%+ growth through the business cycle.
Furthermore, UBS noted margin expansion opportunities within the company’s Industrial Automation business, as the restructuring could help Honeywell International Inc. (NASDAQ:HON) close its long-standing performance gap with industrial peers.
Operating across the U.S., Europe, and other international markets, Honeywell International Inc. (NASDAQ:HON) develops aerospace technologies, industrial and building automation, and energy and sustainable solutions. It is one of the Best Diversified Stocks.
5. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 95
With significant upside potential, Johnson & Johnson (NYSE:JNJ) secures a spot on our list of the 13 Best Diversified Stocks to Buy According to Hedge Funds.
On September 23, 2025, Johnson & Johnson (NYSE:JNJ) announced that it will withdraw the LINC Reflux Management System from markets outside the U.S. by the end of March 2026 for commercial reasons. The LINC Reflux Management System is a device used to treat chronic gastroesophageal reflux disease. Meanwhile, the flexible ring of magnets placed around the muscles at the base of the esophagus to prevent acid reflux will remain available in the U.S.
Amid this development, Guggenheim raised its price target on Johnson & Johnson (NYSE:JNJ) from $167 to $206. The investment firm cited the company’s strong top-line growth in 2025 despite Stelara’s loss of exclusivity. Furthermore, Guggenheim believes that the company’s recently launched bladder cancer drugs Inlexzo (TAR-200) and TAR-210 can generate over $6 billion in sales at peak.
Johnson & Johnson (NYSE:JNJ) is focused on research and development, manufacturing, and sales of a broad range of healthcare products globally. It operates across pharmaceuticals, medical devices, and consumer health markets. It is one of the Best Diversified Stocks.
4. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders: 111
The Walt Disney Company (NYSE:DIS) is one of the 13 Best Diversified Stocks to Buy According to Hedge Funds.
On September 23, 2025, Needham reiterated its ‘Buy’ rating on The Walt Disney Company (NYSE:DIS) with a $125 price target. The investment firm cited strategic changes to Disney’s broadcast operations. Furthermore, the firm recommended that the company simulcast all ABC content on Hulu, in addition to its ABC app, to better preserve advertising revenue and reach.
Furthermore, Needham suggested that The Walt Disney Company (NYSE:DIS) should shut down ABC instead of selling it. This way, the company could minimize value destruction and bring greater investor focus to its faster-growing business segments. This could also drive valuation multiple expansion and unlock about 10% more value to shareholders. Lastly, the investment firm highlighted generative AI’s impact on time frames, making regulatory delays and distractions more costly. Thus, eliminating regulatory risks becomes more valuable.
Operating across the Americas, Europe, and the Asia Pacific, The Walt Disney Company (NYSE:DIS) functions as a diversified entertainment and media conglomerate. It offers content creation, distribution, parks, consumer products, and streaming services through multiple platforms globally. It is one of the Best Diversified Stocks.
3. Danaher Corporation (NYSE:DHR)
Number of Hedge Fund Holders: 115
With significant upside potential, Danaher Corporation (NYSE:DHR) secures a spot on our list of the 13 Best Diversified Stocks to Buy According to Hedge Funds.
On September 20, 2025, Rosen Law Firm announced that it is investigating potential breaches of fiduciary duty by Danaher Corporation (NYSE:DHR)’s directors and officers. Accordingly, the law firm encouraged shareholders to consider legal options.
This notice follows a new share repurchase program authorized by Danaher Corporation (NYSE:DHR)’s board on September 9, allowing the buyback of up to 35 million shares of common stock with no expiration date. The program supplements existing repurchase authorization.
Furthermore, Danaher Corporation (NYSE:DHR)’s management may execute purchases through open market trades, Rule 10b5-1 plans, or other methods based on market conditions. The company’s board also made amendments to its bylaws to revise procedures for shareholder proposals and director nominations.
Operating through its Biotechnology, Life Sciences, and Diagnostics segments, Danaher Corporation (NYSE:DHR) designs, manufactures, and markets professional, medical, research, and industrial products and services in the U.S. It is one of the Best Diversified Stocks.
2. Berkshire Hathaway Inc. (NYSE:BRK-B)
Berkshire Hathaway Inc. (NYSE:BRK-B) is one of the 13 Best Diversified Stocks to Buy According to Hedge Funds.
On September 21, 2025, Berkshire Hathaway Inc. (NYSE:BRK-B) ended its 17-year stake in BYD, an investment that grew more than 20 times since its 2008 entry. The company’s management expressed gratitude, while BYD adviser Altavilla dismissed speculation of mistrust, stressing that the sale reflected Berkshire’s disciplined approach to investing. Meanwhile, Li Yunfei, BYD’s general manager of branding and public relations, thanked Berkshire for its investment and support over the past 17 years.
Previously, on August 18, 2025, TD Cowen reduced its price target on Berkshire Hathaway Inc. (NYSE:BRK-B) from $485 to $479, maintaining a ‘Hold’ rating, underscoring cautious sentiment around the stock.
Through its subsidiaries, Berkshire Hathaway Inc. (NYSE:BRK-B) runs insurance, freight rail transportation, and utility businesses.
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 335
Amazon.com, Inc. (NASDAQ:AMZN) is one of the 13 Best Diversified Stocks to Buy According to Hedge Funds.
On September 23, 2025, Amazon.com, Inc. (NASDAQ:AMZN) decided to shutter all 19 of its Fresh supermarkets in the U.K., following a review of its physical grocery operations. However, five of those stores will be converted into Whole Foods locations. The company will shift its focus to same-day online delivery for perishable items beginning next year.
Meanwhile, on the same day, Amazon.com, Inc. (NASDAQ:AMZN) filed a lawsuit in Brooklyn federal court against the New York Public Employment Relations Board. The company argues that a new state labor law unconstitutionally usurps federal authority over union organizing and workplace disputes.
Amazon.com, Inc. (NASDAQ:AMZN) offers consumer products, advertising, and subscription services through online and physical stores. It operates through North America, International, and Amazon Web Services (AWS) segments. It is one of the Best Diversified Stocks.
While we acknowledge the potential of AMZN to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than AMZN and that has 100x upside potential, check out our report about this cheapest AI stock.
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