From Yahoo Finance: 2025-04-22 10:16:00

15 Small Cap Financial Stocks Hedge Funds Are Buying, including Houlihan Lokey, Inc. (HLI). Tariff uncertainty and recession fears may impact the banking sector, shifting from profit to losses. Analysts believe tariffs could harm the US economy, impacting the banking sector, leading to lower interest rates and reduced M&A activity. Morningstar suggests investors be selective in choosing undervalued financial stocks. Houlihan Lokey, Inc. (HLI) ranks 15th on the list.

During the fiscal third quarter of 2025, Houlihan Lokey, Inc. (HLI) performed well, closing 170 transactions in the Corporate Finance segment, contributing 66% to total revenue. Financial and Valuation Advisory segments also saw benefits from the improved M&A market. Despite potential growth in HLI, AI stocks are believed to offer higher returns within a shorter timeframe.

Houlihan Lokey, Inc. (HLI) is an international investment bank that provides advisory services through Corporate Finance, Financial Restructuring, and Financial and Valuation Advisory segments. It serves corporations, institutions, governments, and sponsors globally. Market cap is $10.752 billion, with 28 hedge fund holders.

To compile the list of 15 small-cap financial stocks hedge funds are buying, Finviz Stock Screener and Insider Monkey’s Q4 2024 hedge funds database were used. Financial services stocks with a market cap between $10 billion and $20 billion were included. Data was collected on April 18, 2025. Mimicking top hedge fund picks can outperform the market, as shown by a strategy that returned 373.4% since May 2014, outperforming its benchmark by 218 percentage points.

Read more: Is Houlihan Lokey (HLI) One of the Small Cap Financial Stocks Hedge Funds Are Buying?