Recently I published a list 15 small financial stock hedge funds are buying. In this article, we’ll look at where Transunion (NYSE:TRU) plays against other small financial stocks that hedge funds are buying.
Like other sectors of the economy, the financial and banking sectors can be hit by tariff uncertainty and fears of recession. On April 8, Reuters reported that the bank’s revenue season is likely to move from profitable banks to losses. Wells Fargo analyst Mike Mayo noted that the bank’s revenue season will reveal the biggest impact of tariffs next year as banks need to secure higher reserves for loans due to the fear of a recession. Additionally, Stephen Biggar, director of financial institutions at Argus Research, said that banks directly reflect the economy, and as markets slow, the sector could potentially have the most difficult hit.
I joined Yahoo Finance for an interview on April 10th to talk about the impact of tariffs on Suryansh Sharma, the banking division, a senior equity analyst at Morningstar. This aggression was in terms of the country’s breadth and product ranges covered by these tariffs. However, the policy has been suspended for 90 days, but the uncertainty has not ended. Sharma believes that if these tariffs remain in effect, they will be harmful to the US economy. This is important for the banking sector as this sector is closely linked to the US macroeconomic performance. Therefore, if the economy is not working, the banks and financial sectors don’t work well.
Sharma explained more about the impact of tariffs. He emphasized that if tariffs were maintained, the economy could be heading towards a recession as macroeconomic conditions are likely to deteriorate. Many sectors benefit from low interest rates, but the banking sector does not. A lower interest rate means contracting assets management and net interest income on bank stocks. Furthermore, given the high levels of uncertainty, loan growth is expected to be downward, which will affect overall merger and acquisition activities. Sharma emphasized that the market expects the Trump administration to bring about a lot of M&A activities that will lead to a banking sector boom, but the current situation points to the bust of the banking sector.
Finally, analysts emphasized that Morningstar thinks the banking sector is still undervalued compared to other sectors, but very slightly undervalued. Therefore, he suggests that investors are highly selective in choosing the bank they want to invest in. He likes financial stocks that have the ability to generate strong fees and are relatively undervalued than fair value.
To compile a list of 15 small financial stocks purchased by hedge funds, we used Finviz Stock Screener and Insider Monkey’s Q4 2024 hedge fund database. We used the screener to aggregate a list of financial services stocks trading at a market capitalization of at least $10 billion. For the purposes of this article, we define small financial services stocks as stocks trading between $10 billion and $20 billion in market capitalization. We then cross-checked the market capitalization from Yahoo Finance and then ranked the stocks in ascending order of the number of hedge fund holders. Market capitalization was used as a tiebreaker if two or more shares were held by the same number of hedge funds. Please note that data was collected on April 18, 2025.
Why are hedge funds interested in the stocks they accumulate? The reason is simple. Our research shows that mimic the top stock picks of the best hedge funds can outperform the market. Quarterly Newsletter’s strategy was to select 14 small and large caps per quarter, returning 373.4% since May 2014, surpassing the benchmark by 218 percentage points (For more information, please see here).
Transunion (TRU): Hedge funds buy among small-cap stocks
A side profile of consumers in-store who hand over their credit cards to the cash register, reflecting the company’s debt collection service.
Market capitalization: $1422.4 billion
Number of hedge fund holders: 58
Transunion (NYSE: TRU) is an international financial information and insights company operated through two business segments: the US market and the international segment. Its key services include credit risk management, fraud mitigation, customer marketing, identity verification and financial inclusion.
On April 10, Jeffreys analyst Surinder maintained his stock’s purchase rating with a price target of $90. In the fourth quarter of 2024, Transunion (NYSE: TRU) outperformed revenue and adjusted its EBITDA guidance. That revenue rose 6%, led by the international segment, and 12% on a constant currency basis. Additionally, the company has implemented several strategic initiatives, including upfront payments of $45 million in debt and refinancing of more than $2.3 billion in loans. Additionally, over 1,000 roles have been moved to the Global Capacity Center to increase productivity and enable more services from diverse geography.
Transunion (NYSE:TRU) will adjust revenue growth of 3.5% to 5% and EBITDA growth of 3% to 6% in 2025 to 3% to 6%, optimizing global operating models and technology transformations to drive innovation. This is the best small financial equity hedge fund you’re buying.
Overall, Tru 1st place Hedge funds buy on the list of small financial stocks. While Tru acknowledges the potential for growth, our belief lies in the belief that AI stocks offer higher returns and hold a greater commitment to doing so within a shorter time frame. There have been AI stocks that have risen since the beginning of 2025, and the popular AI stocks have lost around 25%. If you’re looking for AI stocks that are more promising than TRU, but are trading below 5 times the revenue, check out our report on this Cheapest AI stocks.
