In this article, we will discuss the 10 Most Undervalued Quality Stocks to Invest In.
On June 10, Tom Lee, Fundstrat, joined CNBC’s ‘Closing Bell’ to discuss the current state of the market, and noted that it is showing signs of jitters due to the SpaceX IPO and the consolidation of recent gains. He pointed out that significant capital will soon be raised by Google, Meta, OpenAI, and Anthropic, and he believes that the market is attempting to price these events in. Despite these pressures, Lee maintained that the situation is healthy and unlikely to derail the broader tech trade.
Regarding recent selling in chip stocks, Lee confirmed that this activity is likely related to institutional positioning due to the SpaceX IPO. He notes that SpaceX is a $75 billion IPO and, due to its inclusion in the NASDAQ 100, institutional funds are raising cash both to participate in the IPO and to establish full market-weight positions in the aftermarket, especially if the offering is oversubscribed. He identified the selling of recent winners as a source of cash, but he viewed it as a positive sign that memory stocks and semiconductors have held above their previous Friday lows, suggesting that the charts for these sectors remain intact despite the current gut punches.
Looking ahead, Lee remains bullish, expecting the tech-led uptrend to continue for the foreseeable future. He described 2026 as a year consisting of three phases, anticipating a market pullback later in the year. He explained that this projected second-phase drawdown will be driven by three factors: first, the market testing the new Fed Chair, Kevin Warsham, particularly regarding his approach to measuring inflation and potential policy misalignment with the White House; second, the supply pressure created by the lockup expirations of several large IPOs; and third, the development of oil shortages later in the year, which the market will have to address.
Our Methodology
We sifted through the Vanguard US Quality Factor ETF holdings to identify stocks that are trading below a forward P/E of 15, and limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are also popular among analysts and elite hedge funds.
Note: All data was sourced on June 9.
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. Insider Monkey’s quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
10 Most Undervalued Quality Stocks to Invest In
10. Willis Towers Watson (NASDAQ:WTW)
Number of Hedge Fund Holders: 40
Willis Towers Watson (NASDAQ:WTW) is one of the most undervalued quality stocks to invest in. On June 8, Willis announced the expansion of its international property facility, increasing its available follow capacity to up to $60 million per placement. The enhanced facility includes a larger panel of Lloyd’s syndicates capable of providing competitive quotes across both primary and excess insurance layers.
The facility’s automatic follow capacity, supported by Willis Towers Watson’s (NASDAQ:WTW) Neuron digital trading platform, has also been expanded through the addition of new markets. It serves clients across Europe, Asia, Australia, New Zealand, South Africa, Latin America, the Caribbean, and Canada, with coverage appetite spanning sectors such as airports, hospitality, infrastructure, manufacturing, retail, technology, and transportation.
Since its launch in 2024, the facility has seen strong market adoption. The increased capacity helps clients secure competitive pricing, maintain consistent terms and conditions across placements, and obtain the coverage they need more efficiently.
Willis Towers Watson (NASDAQ:WTW) provides advisory, broking, and risk solutions. The company’s service offerings include actuarial support, broking, strategy consulting, and plan management support. It also offers administrative support for life, medical, disability, voluntary, and other benefit programs.
9. Ameriprise Financial Inc. (NYSE:AMP)
Number of Hedge Fund Holders: 50
Ameriprise Financial Inc. (NYSE:AMP) is one of the most undervalued quality stocks to invest in. On June 3, Pattern Wealth, a private wealth advisory practice managing ~$160 million in client assets, joined the branch channel of Ameriprise Financial from Thrivent Investment Management. Based in Wayzata, the team is led by Jeremy Jackson and includes financial advisor Dave Jackson and client service associate Erika Holland.
The father-son advisory team chose Ameriprise to enhance the client experience and support long-term growth through access to a broader range of tools, advanced technology, and the firm’s nationally recognized brand. The move is intended to strengthen the team’s ability to provide retirement planning, insurance, and investment advice while expanding the services available to clients.
According to Jeremy Jackson, Ameriprise Financial Inc.’s (NYSE:AMP) integrated platform, operational support, and AI-driven capabilities will help the practice deliver more comprehensive advice and personalized strategies. He noted that the transition has been smooth and that clients have responded positively to the expanded opportunities and enhanced experience available through the move.
Ameriprise Financial Inc. (NYSE:AMP) operates as a diversified financial services company. Its segments include Advice & Wealth Management, Asset Management, Retirement & Protection Solutions, and Corporate & Other.
8. State Street Corporation (NYSE:STT)
Number of Hedge Fund Holders: 52
State Street Corporation (NYSE:STT) is one of the most undervalued quality stocks to invest in. On June 4, State Street announced that it had been selected by Principal Financial Group to provide custody, fund accounting, and administration services for Principal Funds. The expanded mandate deepens a long-standing relationship between the two firms.
Under the agreement, Principal will use State Street’s integrated investment servicing platform and global operating infrastructure to support the continued development of its mutual fund business. The move aligns with Principal’s strategy of pairing its growing investment offerings with scalable operational capabilities.
The partnership builds on more than a decade of collaboration, during which State Street Corporation (NYSE:STT) has supported Principal’s ETFs and collective investment trusts. Both companies said the arrangement is expected to improve operational efficiency, enhance speed to market, and support Principal’s long-term growth objectives while strengthening State Street’s role as a provider of large-scale investment servicing solutions.
State Street Corporation (NYSE:STT) provides financial products and services to institutional investors, including custody, accounting, and fund administration services for traditional and alternative assets, as well as trading, securities finance, and investment analytics solutions.
7. Northern Trust Corporation (NASDAQ:NTRS)
Number of Hedge Fund Holders: 52
Northern Trust Corporation (NASDAQ:NTRS) is one of the most undervalued quality stocks to invest in. On June 3, Northern Trust Asset Management/NTAM announced the launch of two actively managed UCITS funds that apply its Adaptive Equity strategy to global and emerging market equities. The new funds are designed to help investors identify stock-specific alpha opportunities across changing market environments.
The strategy combines fundamental research with advanced data science, alternative data sources, and adaptive portfolio construction techniques. Using NTAM’s proprietary research platform, it incorporates signals from areas such as economic networks, corporate innovation, market sentiment, and long-term stakeholder value, alongside analytical tools including natural language processing.
The Ireland-domiciled funds are classified as Article 8 under SFDR and integrate NTAM’s sustainability screening and stewardship practices. The launch expands NTAM’s quantitative investment offering and aims to provide institutional investors with diversified sources of alpha and risk-efficient portfolio solutions.
Northern Trust Corporation (NASDAQ:NTRS) is a financial holding company that operates through its subsidiaries, including The Northern Trust Company (Bank). It offers wealth management, asset servicing, asset management, and banking solutions to corporations, institutions, families, and individuals.
6. Expedia Group Inc. (NASDAQ:EXPE)
Number of Hedge Fund Holders: 62
Expedia Group Inc. (NASDAQ:EXPE) is one of the most undervalued quality stocks to invest in. On May 20, Expedia Group B2B announced a range of new AI-powered products, platform enhancements, and partnerships aimed at helping businesses integrate and scale travel services within their customer experiences. The company introduced an AI toolkit and its Intelligent Experience Platform, designed to simplify the creation of AI-driven travel solutions across APIs, interfaces, and agent workflows.
The new capabilities are intended to support AI-assisted trip planning while reducing the time and investment required for partners to launch travel offerings. Expedia Group B2B also expanded its focus on end-to-end travel distribution by enhancing its car rental, ground transportation, and travel insurance solutions, and highlighted its planned acquisition of CarTrawler as part of its broader strategy to expand beyond lodging into additional travel categories.
In addition, the company unveiled new marketing and merchandising tools for partners, including enhanced APIs and AI-powered advertising capabilities. Expedia Group Inc. (NASDAQ:EXPE) stated that these initiatives are supported by its existing governance, servicing, and infrastructure framework, which includes responsible AI oversight, multilingual customer support, and large-scale operational capabilities for its global partner network.
Expedia Group Inc. (NASDAQ:EXPE) is an online travel company, providing travel products and services in the B2C, B2B, and Trivago segments. The company is based in Seattle, Washington and was founded in 1994.
While we acknowledge the potential of EXPE to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than EXPE and that has 100x upside potential, check out our report about the cheapest AI stock.
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