An excellent way to find stocks that could double is to look at where smart money investors are putting their capital to work. By identifying which hedge funds have taken large positions in particular companies in recent quarters, or have added to long-standing positions, investors can identify bullish signals about a company’s chances of providing big returns. 

U.S. News and World Report recently discussed five top hedge funds in 2022. Not surprisingly, their choices were many of the usual suspects: Scion Capital Management LLC (Michael Burry of The Big Short fame), Citadel LLC (Ken Griffin), Bridgewater Associates LLC (Ray Dalio), Renaissance Technologies LLC (Jim Simons), and Elliott Investment Management LP (Paul Singer).   

It makes complete sense to emulate billionaire investors. The only downside is that much of the available information is backward-looking in nature. By the time a hedge fund files its 13F, it’s usually six weeks after the end of the quarter, leaving plenty of time for the portfolio managers to unload a holding. 

The same principle applies to mutual funds, which is why ETF transparency is much better. But I digress. 

Finding ideas that will turn into two-baggers or more isn’t easy. However, I feel that these three stocks owned by some of the hedge funds listed above aren’t a bad place to start. 

So, here goes.

Geo Group (GEO)

My first pick to double is Geo Group (NYSE:GEO), the operator of prisons and other secure residential care facilities in the U.S., Australia, the UK, and South Africa. 

It’s not the kind of stock I’d own, but it’s Michael Burry’s top holding, accounting for almost 38% of Scion Asset Management’s investment portfolio as of Sept. 30. Burry has held the stock since Q4 2020, paying an average of around $7.38 per share for his position in this stock. In the third quarter, Burry added 1.52 million shares. Scion now owns more than 2 million shares, a sign he believes a recession will happen in 2023.

As for the Florida-based company, it had revenues of $616.7 million in Q3 2022, with adjusted EBITDA (earnings before interest, taxes, depreciation and amortization and amortization) of $136.2 million, 17.4% higher than a year earlier. 

For all of 2022, Geo Group expects adjusted EBITDA of $530 million at the midpoint of its guidance. That’s 14% higher than in 2021.  

However, If you’re looking for help from analysts, only two cover it, both providing a buy rating and an average $14.67 target price, 29% higher than where it’s currently trading.

GEO stock is up nearly 45% year-to-date. 

WisdomTree (WT)

WisdomTree (NYSE:WT) isn’t close to being the largest holding of Bridgewater Associates. Still, it was the hedge fund’s second-largest addition to its portfolio in terms of shares in the third quarter. Bridgewater upped its stake in the ETF company by 70% to 3.75 million shares, making it Bridgewater’s 71st-largest position at the end of September. 

I’ve been a big supporter of WisdomTree, despite the fact it’s been a money-losing bet for a long time. WT stock is down more than 14% in 2022 and 55% over the past five years. Once upon a time, in 2015, it traded for more than $25. 

I don’t know if Bridgewater will hold until it returns to these lofty levels, but the significant increase in Q3 suggests the hedge fund expects the stock to at least return to double digits in 2023. It’s worth noting that Bridgewater started buying shares in Q1 2022 at an average price of $5.26, a few cents below its current market price.

I included WisdomTree in a list of three under-the-radar penny stocks with 100% upside potential in October. My rationale was simple. This is a company which has posted net inflows for eight consecutive quarters as of Sept. 30, adding $1.75 billion to its assets under management in September alone.

At the time, the stock traded around $4.68. It’s up 15% over the past seven weeks. 

Airbnb (ABNB)

Airbnb (NASDAQ:ABNB) is Renaissance Technologies’ third-largest position, accounting for 1.08% of its $122 billion investment portfolio. Considering this hedge fund owns 4,620 stocks, its 1% weighting in this home rental platform is actually a big deal. In the third quarter, the hedge fund added 1.67 million shares, increasing its stake by 29% to 7.28 million shares.   

ABNB stock dropped on Dec. 6 after Morgan Stanley (NYSE:MS) analyst Brian Nowak downgraded it to underweight from equal weight on concerns its growth will slow. As a result, he cut his price target by $30 to $80, well below Airbnb’s current share price. 

His argument is based on the fact that the Street’s estimated occupancy rate of 44% by 2025 is too high. In 2022, it’s expected to average 35%. Renaissance is betting that he’s wrong.

One initiative that supports Renaissance’s thesis on ABNB stock is the company’s recently-announced partnership with major landlords such as Equity Residential and UDR. A primary tenant in one of the landlords’ buildings can host their apartments for several nights each month. The landlords take a cut from the primary tenant. In initial trials, on average, tenants have hosted nine nights per month, generating $900 in average income. 

It’s not a ton of income, but if you’re out of town most weekends, it’s a way to make ends meet, and everyone wins. 

Thus, I think it’s clear the demise of Airbnb has been greatly exaggerated.

On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.