Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Smart Money Is Piling Into These Growth Stocks

Many investors and analysts are warning that the markets are overvalued, which could lead to a severe correction in the near-term should the Fed decide to raise interest rates this year. However, that possibility shouldn’t dissuade anyone from finding the pockets of value that still exist in the market, especially for long-term-focused investors. In particular, stocks with rapidly growing top-lines hold the potential to deliver strong returns even should the market enter a bear phase.

Having said that, we are going to take a look at four stocks that have both strong revenue growth and enjoyed significant popularity among the smart money in our database during the second quarter. Those stocks are Xactly Corporation (NYSE:XTLY), Century Communities, Inc (NYSE:CCS), Sprouts Farmers Market Inc (NASDAQ:SFM), and Beacon Roofing Supply, Inc. (NASDAQ:BECN).

At Insider Monkey, we track around 750 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see more details).

stock, market, business, app, shares, share, news, global, man, phone, big, graph, chart, using, screen, fast, motion, concept, internet, up, tablet, touching, technology,


Hedge funds tracked by Insider Monkey increased their holdings in sales software company Xactly Corporation (NYSE:XTLY) significantly during the second quarter, with 12 funds holding shares at the end of June, up from seven a quarter earlier, while the value of their holdings increased by more than four-fold to $31.49 million. Xactly’s fiscal second quarter 2017 revenue came in at $24 million, a 31% increase from the second quarter of its fiscal 2016, and above the consensus estimate of $23.37 million. Xactly has strong organic growth and expects to achieve profitability by the end of this year. Xactly expects $23.3 million-to-$24.1 million in revenue for its fiscal third quarter and $96.0 million-to-$97.5 million for its full 2017 fiscal year. Jim Simons‘ Renaissance Technologies added a 438,900-share position in Xactly Corporation (NYSE:XTLY) to its portfolio during the second quarter. The stock has gained over 74% so far this year.

Follow Xactly Corp (NYSE:XTLY)
Trade (NYSE:XTLY) Now!

At the end of the second quarter, 12 hedge funds in our database were long Century Communities, Inc (NYSE:CCS), compared to 10 funds a quarter earlier. The home building company’s home sales revenue jumped by 38% to reach $257.2 million during the second quarter. Century Communities, Inc (NYSE:CCS) CEO Dale Francescon said during that earnings call that the double-digit gains in its revenue as well as a 36% rise in adjusted gross margin will support the further growth initiatives of the company. For the full year, Century Communities, Inc (NYSE:CCS) expects home sales revenue to come in between $850 million and $1 billion, compared to $734.49 million in 2015. Howard Marks’ Oaktree Capital Management owns around 1.47 million shares of Century Communities as of the end of June.

Follow Century Communities Inc. (NYSE:CCS)
Trade (NYSE:CCS) Now!

On the next page we’ll continue our discussion of hedge funds’ favorite stocks with strong revenue growth, with a look at two more companies.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.