We recently compiled a list of the 10 Large-Cap Stocks with Insider Buying in 2025. In this article, we are going to take a look at where TKO Group Holdings, Inc. (NYSE:TKO) stands against the other large-cap stocks.
Insider buying is one of the strongest indirect signals that analysts and successful investors often use to assess whether a stock is undervalued or not. The intuition behind this stems from the fact that high-ranked insiders such as named executive officers and directors possess confidential information that may give greater visibility into the company’s future and growth trajectory. Insiders leverage such information as real-time data on sales and orders, and discussions with key clients, suppliers and other stakeholders, to form a better understanding of the company’s valuation. For instance, insiders often show net selling of their own company stock at peak valuations, just days or weeks before a major market correction happens; and vice versa, insiders often show net buying at or near market bottoms, days or weeks before the stock price starts to increase. This is clearly not a coincidence most of the time. Also, many successful investors emphasized the idea that insider buying is often a stronger signal than selling. Here is what Peter Lynch, one of the greatest ever, said on this topic:
“Insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.”
With the US stock market having experienced a very strong bull market for the last 2 years, insider buying has become increasingly muted, with insider selling starting to prevail, especially in apparently overbought sectors like technology. This trend suggests that executives and institutional investors may see limited upside in certain high-flying stocks, prompting them to lock in gains. However, a significant portion of those strong returns have been driven only by a handful of companies, often called the “Magnificent 8”, which experienced an uplift from AI and other megatrends. At the same time, on an equal-weight basis, the US stock market has had a more modest performance. Some sectors like healthcare are at or near multi-year lows on a relative basis, driven by a combination of headwinds as well as a lack of tailwinds to the same extent as the technology leaders. The key takeaway for investors is that regardless of what point in the cycle we are, or how long into a bull market we are, both buying and selling opportunities will exist.
ALSO READ: 10 Technology Stocks with Insider Buying in 2024
The US stock market is still near its early 2025 all-time high and exhibits peak concentration and net insider selling. We believe that at such extreme points, when high valuation concerns are widely spread in the news, the signals provided by insiders buying their own company stocks are more valuable than ever. Their actions can indicate where genuine value exists beneath the broader market’s surface, highlighting sectors or individual companies that may be overlooked or undervalued. Insider buying in such an environment suggests confidence in a company’s long-term fundamentals, despite broader market uncertainties or short-term volatility. Investors who pay close attention to these signals may uncover opportunities in sectors that have lagged behind, offering potential for strong future returns as market conditions evolve. Last but not least, large-cap companies are usually widely followed and exhibit more price efficiency; consequently, insider buying signals in these stocks are even more relevant in our opinion.
Our Methodology
We used Insider Monkey’s insider trading stock screener to find large-cap stocks with at least two insiders buying shares worth at least $100,000 in the last six months. We believe that multiple insiders buying significant amounts of stock represents a higher chance that insiders have high confidence in the company. For all the companies, we also include the number of hedge funds tracked by Insider Monkey, as of Q4 2024, that own the stock. The stocks are ranked in ascending order of their hedge fund holdings.
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).
Huge crowds in a sports stadium with their smartphones streaming a live game.
TKO Group Holdings, Inc. (NYSE:TKO)
Number of Hedge Fund Holders: 54
TKO Group Holdings, Inc. (NYSE:TKO) is a prominent sports and entertainment company formed in September 2023 through the merger of World Wrestling Entertainment (WWE) and Zuffa, the parent company of Ultimate Fighting Championship (UFC). This merger marked the first time WWE was not majority-controlled by the McMahon family, who had owned it for over 70 years. TKO operates iconic brands such as UFC, WWE, and Professional Bull Riders, reaching over 210 countries and territories and organizing more than 500 live events annually, attracting over three million fans. The company’s revenue streams include media rights, live events, sponsorships, and consumer product licensing.
TKO Group Holdings, Inc. (NYSE:TKO) delivered record financial performance in their first full year as a public company, generating revenue of $2.804 billion and adjusted EBITDA of $1.251 billion, exceeding their revised guidance. The integration of UFC and WWE proved successful, driving greater efficiency and exceeding guided net savings of $100 million. The company strengthened its media rights portfolio through significant partnerships, notably moving WWE Raw to Netflix, which provides access to 300 million subscribers globally.
Both UFC and WWE achieved record-breaking years in live events, with UFC delivering 10 all-time highest grossing event records and WWE setting revenue records at 10 premium live events. Global brand partnerships showed strong growth, with UFC sponsorship revenue increasing 28% and WWE setting an all-time high with 20% year-over-year growth. Looking ahead, the company is focused on domestic rights renewals for UFC and WWE’s premium live events as their highest priority, while also expecting to close acquisitions of IMG, On Location and PBR in the first quarter to expand their global sports portfolio. For 2025, TKO Group Holdings, Inc. (NYSE:TKO) is targeting revenue of $2.93 billion to $3.0 billion and adjusted EBITDA of $1.35 billion to $1.39 billion, which is further reinforced by insider buying in the last six months.
Overall TKO ranks 7th on our list of the large-cap stocks with insider buying in 2025. While we acknowledge the potential of TKO as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than TKO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.