15 Best Fundamental Stocks to Buy According to Hedge Funds

In this article, we will take a look at the 13 Best Fundamental Stocks to Buy According to Hedge Funds.

On June 27, U.S. stock index futures jumped, setting the S&P 500 and the Nasdaq on course to reach all-time highs as investors braced for a significant inflation report amid indications of a dovish Federal Reserve. This week’s barrage of economic data, which included a first-quarter GDP report that was weaker than anticipated and a multi-year high in unemployment claims, has bolstered the argument that the central bank should lower borrowing costs this year.

The Federal Reserve has been under pressure from President Trump to cut interest rates to reduce the cost of funding the country’s soaring national debt. However, during its recent meeting, the Federal Open Market Committee decided to maintain its target key interest rate between 4.25% and 4.5%.

Conversely, Fed Governor Michelle Bowman stated on June 23 that, provided inflation pressures remain low, she would support a rate drop at the next policy meeting in July.

“Should inflation pressures remain contained, I would support lowering the policy rate as soon as our next meeting in order to bring it closer to its neutral setting and to sustain a healthy labor market.”

Trump’s tariffs had raised concerns among economists that they might increase inflation, but thus far, the measures have had little effect. Simultaneously, the president has calmed down and allowed for negotiations with important trading partners.

With that in mind, we will now take a look at the 15 best fundamental stocks to buy according to hedge funds.

Our Methodology

For our list of the best fundamental stocks, we noted down equities that are known for their stable businesses, recognized product lines, and have a proven history of performing well during economic swings.  These companies recorded reliable revenue growth rates of more than over the past 5 years. We also used the number of hedge fund investors as a secondary metric to rank the stocks, as of Q1 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).

15. UBS Group AG (NYSE:UBS)

5-Year Revenue Growth Rate: 13.42%

Number of Hedge Fund Holders: 33

UBS Group AG (NYSE:UBS) ranks among the best fundamental stocks to buy according to hedge funds. RBC Capital retained its Outperform rating on UBS Group AG (NYSE:UBS), but reduced its price target for the Swiss banking behemoth from CHF31.50 to CHF29 on June 19. The move appears as a response to the current “Too Big To Fail” (TBTF) regulatory plan in Switzerland, which RBC Capital believes to be a “worst case” situation for the bank.

RBC Capital cites the proposal’s longer implementation period as a mitigating factor, indicating that UBS might absorb the regulatory changes without further reducing shareholder payouts. Although the new price target is still higher than UBS’s current share price, the firm’s valuation methodology was modified to account for what it refers to as a “harsher outcome” on deferred tax assets and software.

While acknowledging that it will “take time to have full visibility” on the situation, RBC Capital believes there is potential for a better result for UBS Group AG (NYSE:UBS) despite immediate regulatory challenges.

Global financial services company UBS Group AG (NYSE:UBS) offers a range of services, including investment banking and wealth management, to individuals, businesses, and institutions.