5 Best Upside Stocks to Buy According to Hedge Funds

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In this article, we will list the 5 Best Upside Stocks to Buy According to Hedge Funds. Please visit 10 Best Upside Stocks to Buy According to Hedge Funds to see the extended list and the methodology behind it.

5. Resideo Technologies Inc. (NYSE:REZI)

Average Upside Potential: 53.48%

Number of Hedge Fund Holders: 51

Resideo Technologies Inc. (NYSE:REZI) is one of the best upside stocks to buy according to hedge funds. On June 16, Resideo Technologies announced the pricing of $400 million in senior notes due 2034, bearing an interest rate of 7.125%, in preparation for the planned spin-off of its ADI Global Distribution business. This offering is part of a broader financial strategy for ADI, which also includes the syndication of a $600 million senior secured term loan and a $500 million revolving credit facility.

5 Best Upside Stocks to Buy According to Hedge Funds

These steps are designed to capitalize ADI as an independent entity ahead of the spin-off, which is expected to occur between mid-Q3 and mid-Q4 of 2026. Proceeds from the notes and the term loan will be primarily used to make a distribution to Resideo and to cover transaction-related expenses. The note proceeds will be held in escrow until the spin-off is finalized, at which point the debt will be assumed by an ADI subsidiary and guaranteed by ADI and its relevant subsidiaries. If the spin-off conditions are not satisfied by the end of 2026, the notes will be subject to a mandatory redemption at their issue price.

This financing initiative marks a key milestone in the separation of the two businesses. Once the spin-off is complete, ADI will operate as an independent entity with its own credit structure, while Resideo Technologies Inc. (NYSE:REZI) maintains its focus on global technology-driven sensing and control solutions.

Resideo Technologies Inc. (NYSE:REZI) makes smart home technology for comfort, energy management, and safety, including thermostats (Honeywell Home), smoke detectors, security systems, and water management, and also operates ADI Global Distribution, a major wholesale distributor of security, fire, and low-voltage products to professionals worldwide.

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