Most Undervalued 15 Stocks From Hedge Funds, Which One is Your Favorite?
A Goldman Sachs team led by Peter Oppenheimer said in a note that value stocks will gain more traction in 2023 as tech stocks continue to feel margin pressure.
The Bloomberg report also quoted several experts who think value stocks will be preferred over tech plays in the months to come.
This article from Yahoo finance picked 15 stocks sourced from the top holdings of Vanguard Value ETF (VTV) and which have PE ratios of less than 18 as of January 26.
The 15 stocks are $Meta Platforms, Inc.(META)$ , $JPMorgan Chase(JPM)$ , $Bank of America(BAC)$ , $Citigroup(C)$, $Wells Fargo(WFC)$ , $Pfizer(PFE)$ , $Exxon Mobil(XOM)$ , $Goldman Sachs(GS)$ , $Intel(INTC)$ , $CVS Health(CVS)$ , $ConocoPhillips(COP)$ , $Verizon(VZ)$ , $EOG Resources(EOG)$ , $Morgan Stanley(MS)$ , $3M(MMM)$ .
The 15 stocks that have the highest number of hedge funds having stakes in them as of the end of the third quarter, which means the 15 stocks are some of the most popular undervalued value stocks among elite hedge funds.
Below are the performance since Oct 3rd, the first trading day of Q4 2022 to press of time. We can see $JPMorgan Chase(JPM)$ ,$Exxon Mobil(XOM)$ ,$Citigroup(C)$ ,$Morgan Stanley(MS)$ , $Bank of America(BAC)$ are the top 5 performers so far.
How will they continue to perform?
Below are some highlights about each stock in recent month which may cause influence in future price.
Hope the information helps, and please vote your best bullish undervaluestocks among them.
1. $Meta Platforms, Inc.(META)$ , Number of Hedge Fund Holders: 177
on January 26, Meta Platforms, Inc reported will pay BuzzFeed millions of dollars to generate content for Facebook platform. Meta Platforms, Inc. is investing heavily to reinvigorate growth on its platform as it faces several challenges such as slowing growth of Instagram and Facebook and tough competition from TikTok.
Earlier in January, Michael Nathanson of MoffettNathanson said Meta Platforms, Inc. and Google present “really attractive” entry points for investors. The analyst thinks people are overblowing the fears regarding the ads industry compare to the ads industry's cyclical in nature.
2. $JPMorgan Chase(JPM)$ , Number of Hedge Fund Holders: 110
One of the biggest banks in the world, 110 funds had stakes in JPMorgan Chase & Co. as of the end of the third quarter. The total value of these stakes was $6.4 billion. The biggest stakeholder of JPMorgan Chase & Co. among the elite hedge funds was Ken Fisher’s Fisher Asset Management, with an $821 million stake.
Earlier in January, JPMorgan Chase CEO Jamie Dimon shared publicly that the Fed could continue to increase interest rates amid stubbornly high inflation. Dimon thinks rates are “probably going to go higher than 5%,” and “a lot of underlying inflation, which won’t go away quick.”
3. $Bank of America(BAC)$, Number of Hedge Fund Holders: 97
97 hedge funds reported owning stakes in Bank of America Corporation, Bank of America Corporation has a PE ratio of 11.1 as of January 27. $(BAC)$ joins the list of major companies facing the heat of tough economic conditions.
It was reported by Bloomberg earlier this month that Bank of America Corporation ’s top management has asked its managers to stop hiring except for crucial roles as the company looks to cut costs. The hiring freeze is expected to remain effective until at least the first half of the 2023 or until the economy begins to turn the corner.
4. $Citigroup(C)$, Number of Hedge Fund Holders: 85
85 hedge funds had stakes in Citigroup Inc. at the end of the third quarter of 2022. The biggest stakeholder was Warren Buffett’s Berkshire Hathaway, which had a $2.3 billion stake in the company. The second biggest stakeholder was Natixis Global Asset Management’s Harris Associates, with a $958 million stake.
5. $Wells Fargo(WFC)$ ,Number of Hedge Fund Holders: 77
Earlier January, the bank announced a quarterly dividend of $0.30 per share. Forward dividend yield at the time came in at 2.68%. The dividend is payable on March 1.
Wells Fargo & Company stock was recently downgraded by Jefferies analyst Ken Usdin after the company posted fourth-quarter results. The analyst said positive news from the operating cost front was offset by lower earnings power.
6. $Pfizer(PFE)$, Number of Hedge Fund Holders: 77
As of the end of the September quarter, 77 funds reported having stakes in Pfizer Inc. , compared to 70 funds in the previous quarter. The total worth of these stakes was about $2.4 billion. The biggest stakeholder in this period was Cliff Asness’ AQR Capital Management which had a $468 million stake in Pfizer Inc.
Recently, the FDA said it has not seen an increased stroke risk linked to Pfizer-BioNTech’s COVID shots for seniors.
7. $Exxon Mobil(XOM)$, Number of Hedge Fund Holders: 75
As of the end of the third quarter of 2022, 75 hedge funds had stakes in Exxon Mobil , compared to 72 funds in the previous quarter. The total value of these stakes was $5.5 billion. The biggest stakeholder of Exxon Mobil was Rajiv Jain’s GQG Partners, with a $3 billion stake. Earlier in January, Exxon Mobil announced it will increase gasoline and diesel production at its Beaumont, Texas, refinery.
8. $Goldman Sachs(GS)$, Number of Hedge Fund Holders: 69
69 hedge funds have stakes in The Goldman Sachs Group, Inc. The Goldman Sachs Group, Inc. has a dividend yield of about 2.8% as of January 26.
Earlier in January, Wells Fargo Securities analyst Mike Mayo said The Goldman Sachs Group, Inc. "is probably stalled near term.” The analyst was referring to the reports which said the Fed started an investigation into the investment bank's consumer business.
9. $Intel(INTC)$, Number of Hedge Fund Holders: 69
As of the end of the third quarter, compared to 65 funds in the previous quarter. Intel shares dived more than 6% on January 26 after the company's Q4 results missed estimates and Q1 guidance also pointed to further weakness in Intel business. In the first quarter 2023, Intel expects to lose $0.15 per share, excluding one-time items. Revenue is expected to be between $10.5 billion and $11.5 billion.
10. $CVS Health(CVS)$ , Number of Hedge Fund Holders: 66
Oil giant Chevron revealed plans to buy back about $75 billion worth of its shares last week. Chevron also upped its quarterly dividend by a whopping 6%. As of the end of the third quarter of 2022, 66 hedge funds reported owning stakes in Chevron, higher than the data of 59 in the second quarter. This shows that the hedge fund sentiment around the stock is positive.
Commenting on $CVS Health(CVS)$ ’s share buyback announcement, Bank of America's Doug Leggate said Chevron (NYSE:CVX)’s buyback plan "acknowledges a balance sheet headed towards zero net debt and speaks to the balancing act this management has navigated between capital discipline and sustainable dividend growth."
11. $ConocoPhillips(COP)$, Number of Hedge Fund Holders: 64
With a dividend yield of over 4%, ConocoPhillips is among the most sought-after stocks these days as investors look to pile into solid dividend plays for certainty and steady income. ConocoPhillips has gained about 40% over the past 12 months. Still, its PE ratio stands at 8.9 as of January 27.
As of the end of the third quarter, Among the 77 hedge funds which having stakes(about $5 billion) in ConocoPhillips, the Ken Fisher's Fisher Asset Management is the biggest stakeholder with a $709 million stake.
12. $Verizon(VZ)$, Number of Hedge Fund Holders: 62
Verizon Communications Inc. (NYSE:VZ) has increased its dividend consistently for the last 16 years. The telecom giant posted 1.43 million retail postpaid net adds for the fourth quarter. This marked Verizon Communications Inc. ’s best single quarter in seven years. Postpaid phone net adds came in at 217,000 in the period.
For 2023, Verizon Communications Inc. expects its EPS to be in the range of $4.55-$4.85. Earnings before interest, taxes, depreciation and amortization is expected to be $47 billion-$48.5 billion. Ken Griffin’s Citadel Investment Group is the biggest stakeholder of Verizon Communications Inc. which owns a $200.4 million stake.
13. $EOG Resources(EOG)$, Number of Hedge Fund Holders: 52
Energy company EOG Resources, Inc. is one of the best undervalued value stocks to buy according to hedge funds. EOG Resources, Inc. has a PE ratio of 10.68 as of January 26. EOG Resources, Inc. is a dividend-paying company, with a dividend yield of 2.43% as of January 26.
A total of 52 hedge funds tracked by Insider Monkey had stakes in EOG Resources, Inc. at the end of the September quarter.
14. $Morgan Stanley(MS)$ ,Number of Hedge Fund Holders: 52
Morgan Stanley has upped its dividends consistently for over a decade now. Morgan Stanley’s dividend yield as of January 26 stands at over 3% while its PE ratio is 15.68. Earlier in January, Morgan Stanley declared a quarterly dividend of $0.775 per share, in line with previous. Forward dividend yield at the time came in at 3.38%.
As of the end of the third quarter, 52 hedge funds tracked by Insider Monkey reported having stakes in Morgan Stanley (NYSE:MS), compared to 58 funds in the previous quarter. The total value of these stakes was $3.3 billion.
15. $3M(MMM)$, Number of Hedge Fund Holders: 49
3M Company is one of the most undervalued value stocks to buy according to hedge funds. A total of 49 hedge funds tracked by Insider Monkey reported having stakes in 3M Company at the end of the September quarter.
Which stock is your favorite?
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Great article