In this article, we will discuss the 10 Most Undervalued Stocks to Buy and Hold for 2 Years.
On May 27, Kathleen Entwistle, Managing Director & Private Wealth Advisor at Morgan Stanley Private Wealth Management, joined CNBC’s ‘Fast Money’ to discuss buying opportunities in the current market. Entwistle noted that while the market has been on a significant upward trajectory, clients who have participated are currently satisfied. While she believes opportunities remain, she advised investors to be mindful and cautious. If a larger market pullback occurs, she views it as an ideal entry point. Regarding diversification for clients seeking to move beyond the concentrated tech trade, such as chips and Meta, the firm is currently placing clients into real assets, including energy and infrastructure, with a specific focus on the digital space. Simultaneously, the firm is looking to reduce the duration of bonds due to recent developments in the interest rate market. The current strategy involves maintaining positions in US and emerging markets while beginning to explore the small-cap arena.
Entwistle highlighted that the energy trade is performing well and noted that SLBs are trading at levels last seen three years ago. She emphasized that energy is a crucial holding, particularly because it tends to hold up well during inflationary environments. Given the signals from Fed futures suggesting rates might be increased rather than cut, she advises that it is time to consider adding a sleeve of serious commodities and real assets to portfolios. When defining real assets, she included both market-based and non-market investments, specifically mentioning hedge funds, gold, silver, and energy as assets that respond well to the current market climate.
Our Methodology
We used screeners to identify stocks that are trading below a forward P/E of 15 and are expected to grow their earnings by at least 25% over the next 5 years. We 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 5.
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 Stocks to Buy and Hold for 2 Years
10. Pan American Silver Corp. (NYSE:PAAS)
Number of Hedge Fund Holders: 50
Pan American Silver Corp. (NYSE:PAAS) is one of the most undervalued stocks to buy and hold for 2 years. On June 1, Pan American Silver advanced the first phase of the “Timmins Camp Project” to extend the life and production capacity of its Ontario operations. This initiative uses existing infrastructure at the Bell Creek mine and processing plant, supported by a $146 million investment to advance new mineral resources.
Key developments include a 625-meter shaft extension at the Bell Creek mine to access deeper mineralization and the creation of underground access drifts at the Vogel and Samson satellite deposits. These projects, combined with extensive ongoing drilling programs, aim to integrate these deposits into a long-life, district-scale production platform.
The company is actively advancing engineering studies, metallurgical evaluations, and resource conversion to optimize its Timmins facilities. With ongoing exploration and positive drill results across the Bell Creek, Vogel, Samson, and Gold River properties, Pan American is positioning its Timmins operations for sustained, long-term growth.
Pan American Silver Corp. is a premier Canadian-based mining company that explores, extracts, and produces silver and gold, along with base metals like zinc, lead, and copper, primarily in the Americas. It operates high-margin mines and aims to be the world’s leading silver producer, with operations in Canada, Mexico, Brazil, Argentina, and Peru.
9. Hewlett Packard Enterprise Company (NYSE:HPE)
Number of Hedge Fund Holders: 58
Hewlett Packard Enterprise Company (NYSE:HPE) is one of the most undervalued stocks to buy and hold for 2 years. On May 14, HPE announced a transition to a unified global distribution model, selecting Ingram Micro and TD SYNNEX as its primary worldwide partners. This strategic move aims to simplify the partner experience, improve operational support, and provide consistent enablement resources across HPE’s comprehensive portfolio.
The new structure leverages the scale of these global distributors, alongside specialized regional partners, to enhance cross-selling opportunities for networking, cloud, and AI solutions. By unifying the distribution network, HPE intends to help partners more effectively sell, deliver, and service complex solutions tailored to diverse customer needs.
Building on the foundation established by the acquisition of Juniper Networks, this model is designed to increase efficiency and accelerate market adoption. HPE plans to finalize country-specific distribution lineups in the coming months, ensuring regional requirements are met while maintaining global alignment throughout the transition.
Hewlett Packard Enterprise Company operates as a global technology provider focused on intelligent solutions. Its platforms help customers capture, analyze, and act on data from edge to cloud. The customer base ranges from small and medium-sized businesses to large enterprises and government organizations.
8. Maplebear Inc. (NASDAQ:CART)
Number of Hedge Fund Holders: 58
Maplebear Inc. (NASDAQ:CART) is one of the most undervalued stocks to buy and hold for 2 years. On June 4, Vida Health and Instacart have partnered to improve health outcomes for members managing cardiometabolic conditions by increasing access to nutritious food. By integrating Instacart’s “Fresh Funds” technology, Vida’s clinical care teams can now provide members with targeted grocery stipends, turning personalized nutrition advice into actionable purchases.
This collaboration is designed to bridge the gap between clinical guidance and daily healthy habits, particularly for members in food deserts, rural areas, and underserved communities. Vida’s multidisciplinary team creates culturally sensitive meal plans, which members can now fulfill through Instacart’s nationwide delivery network, bypassing the social and geographic barriers often associated with traditional care.
Looking ahead, the companies plan to deepen this integration by making Vida-designed meal plans directly shoppable through the Maplebear Inc. platform. They are also exploring opportunities for employers to subsidize food access as a formal benefit, aiming to create a seamless model where professional dietary support and grocery accessibility are combined for better patient care.
Maplebear Inc., doing business as Instacart, is a North American retail technology company that operates a massive online marketplace for grocery delivery and pickup, connecting customers with personal shoppers who fulfill orders from local retail stores.
7. LyondellBasell Industries (NYSE:LYB)
Number of Hedge Fund Holders: 59
LyondellBasell Industries (NYSE:LYB) is one of the most undervalued stocks to buy and hold for 2 years. On May 1, LyondellBasell finalized the sale of select European olefins and polyolefins assets to AEQUITA, marking a significant milestone in the company’s ongoing European strategic assessment. This divestiture aligns with LyondellBasell’s broader strategy to refine its portfolio, focusing investment on core businesses that offer durable competitive advantages and superior long-term returns.
The transaction involves assets located in France, Germany, the UK, and Spain, which will now operate as a standalone company named Velogy. While exiting these specific operations, LyondellBasell retains its Advanced Polymer Solutions business in Tarragona and maintains its commitment to the European market, specifically in the areas of specialty polymers, circular solutions, and technological innovation.
By completing this sale, LyondellBasell Industries gains increased financial flexibility to support disciplined capital allocation toward higher-return opportunities. Both companies noted the constructive nature of the transition, with AEQUITA expressing its intent to build upon the assets’ existing market fundamentals to establish a scaled and competitive European polymers platform.
LyondellBasell Industries is a global, independent chemical company focused on developing solutions for everyday sustainable living. The company operates through several segments, including Olefins and Polyolefins-Americas (O&P-Americas), Olefins and Polyolefins-Europe, Asia, International (O&P-EAI), Intermediates and Derivatives (I&D), Advanced Polymer Solutions (APS), and Technology.
6. BioMarin Pharmaceutical Inc. (NASDAQ:BMRN)
Number of Hedge Fund Holders: 62
BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) is one of the most undervalued stocks to buy and hold for 2 years. On May 4, BioMarin reported financial results for Q1 2026, with total revenues reaching $766 million. Driven by the recent acquisition of Amicus Therapeutics and the addition of GALAFOLD and POMBILITI + OPFOLDA to its portfolio, the company has increased its full-year 2026 revenue guidance to a range of $3.825 to $3.925 billion, representing a year-over-year growth rate of 20%.
The company highlighted significant progress across its clinical pipeline and commercial operations. Key updates included the FDA approval of PALYNZIQ for adolescents with phenylketonuria, the submission of an sNDA for the full approval of VOXZOGO for achondroplasia, and positive clinical data presentations for BMN 351 and VOXZOGO. BioMarin Pharmaceutical Inc. also reported steady revenue growth across its existing enzyme therapy products and a consistent increase in the number of children treated with VOXZOGO.
To support its growth strategy, BioMarin secured ~$3.7 billion in non-convertible debt to fund the Amicus acquisition while maintaining strong operating cash flows of $221 million for the quarter. With total cash reserves of ~$2 billion and upcoming Phase 3 data readouts expected later this year, the company remains focused on scaling its commercial portfolio and advancing its innovation pipeline to drive long-term value for patients and shareholders.
BioMarin Pharmaceutical Inc. develops and commercializes therapies for serious and life-threatening medical conditions and rare diseases.
5. Block Inc. (NYSE:XYZ)
Number of Hedge Fund Holders: 63
Block Inc. (NYSE:XYZ) is one of the most undervalued stocks to buy and hold for 2 years. On May 7, Block reported Q1 2026 earnings, exceeding guidance with gross profit up 27% to $2.91 billion and adjusted diluted EPS reaching an all-time high of $0.85 (up 52% year-over-year). Growth was driven by broad-based strength in both the Cash App and Square ecosystems, with adjusted EBITDA hitting $1 billion.
The company is aggressively integrating AI solutions like “Moneybot” and “Managerbot” to automate operations and improve customer engagement, resulting in significant internal productivity gains. Strategic initiatives such as the expansion of “Neighborhoods,” new ISO partnerships, and deeper integration of “Buy Now, Pay Later” across the Cash App platform are accelerating network connectivity and transaction volume.
Management raised its full-year 2026 outlook, now expecting $12.33 billion in gross profit (19% growth) and adjusted EPS of $3.85 (62% growth). Block Inc. remains focused on a long-term strategy of evolving into an “intelligence company,” using AI to provide proactive financial services and deeper, personalized value to both consumers and sellers.
Block Inc., founded in 2009 by Jack Dorsey, is an American financial services company. It offers point-of-sale systems and credit solutions to merchants through its Square subsidiary. It offers peer-to-peer payment, banking, and Bitcoin trading through its Cash App platform.
4. Phillips 66 (NYSE:PSX)
Number of Hedge Fund Holders: 64
Phillips 66 (NYSE:PSX) is one of the most undervalued stocks to buy and hold for 2 years. On May 18, Phillips 66 is advancing its integrated wellhead-to-market strategy by moving forward with the Zeus Gas Plant in the Permian Basin and a third Coastal Bend Fractionator on the Texas Gulf Coast. Both projects are scheduled to come online in 2028 and are designed to increase gas processing and NGL fractionation capacity to support growing Permian production volumes.
The Zeus project includes a 300 MMcf/d gas processing facility and the new 45-mile Midland Express/MEX Pipeline, which will integrate gathering systems and provide increased operational flexibility. The third Coastal Bend Fractionator, a 100 MBD facility in Robstown, Texas, will further enhance the company’s ability to move NGLs efficiently through its value chain.
These investments fall within Phillips 66’s existing capital spending guidance and support its broader financial goals of debt reduction and shareholder returns. By expanding these midstream assets, the company aims to better connect Permian supply to key market centers and capture additional value across its integrated network.
Phillips 66 (NYSE:PSX) operates as an integrated downstream energy provider across the United States, the United Kingdom, Germany, and international markets.
3. Centene Corporation (NYSE:CNC)
Number of Hedge Fund Holders: 72
Centene Corporation (NYSE:CNC) is one of the most undervalued stocks to buy and hold for 2 years. On April 28, Centene Corporation reported strong Q1 2026 financial results, with adjusted diluted EPS of $3.37, outperforming internal expectations by ~$0.50. Driven by this solid start, the company has increased its full-year 2026 adjusted diluted EPS guidance to greater than $3.40. During the quarter, Centene also successfully reduced its debt by $1.0 billion.
Operational performance remained robust across its primary business lines. The Medicaid segment achieved an 87.3% health benefits ratio/HBR, aided by effective medical cost management and moderate flu trends, while the Medicare segment saw outperformance in both Medicare Advantage and Prescription Drug Plans/PDP. Although the Commercial segment’s HBR of 75.3% was slightly above expectations due to higher-acuity Marketplace members, total premium and service revenues grew 5% year-over-year to $44.7 billion.
Centene continues to balance its financial growth with significant community engagement, including new initiatives for affordable housing, diabetes-related nutritional support, and provider accessibility for patients with disabilities. Fortune also recognized the company as one of the World’s Most Admired Companies for the eighth consecutive year, reflecting Centene’s ongoing commitment to operational discipline and its long-term enterprise earnings power.
Centene Corporation is a healthcare enterprise that provides programs and services to government-sponsored healthcare programs. The company’s operations are divided into the following segments: Medicaid, Medicare, Commercial, and Other.
2. Nu Holdings Ltd. (NYSE:NU)
Number of Hedge Fund Holders: 104
Nu Holdings Ltd. (NYSE:NU) is one of the most undervalued stocks to buy and hold for 2 years. On June 4, Nu Holdings announced a share repurchase program authorizing the buyback of up to $1.0 billion of its Class A ordinary shares over the next 12 months, beginning June 4. This initiative reflects the company’s current capital generation strength and its commitment to a deliberate capital allocation policy.
The program is designed to deliver value to shareholders while ensuring that all existing growth investments across Brazil, Mexico, Colombia, and the United States, including necessary regulatory capital buffers, remain fully funded.
The repurchases will be conducted periodically in the open market in accordance with applicable securities regulations. Nu Holdings Ltd. noted that the program is discretionary, meaning it is not obligated to acquire a specific number of shares and maintains the flexibility to suspend, modify, or discontinue the plan at any time.
Nu Holdings Ltd. operates as a digital banking platform provider across the United States, Mexico, the Cayman Islands, Colombia, and Brazil. The company provides spending solutions, including Nubank+ Tier, Nu credit and prepaid card, Ultraviolet credit and prepaid card, mobile payment solutions, and Nu Shopping. It also offers transactional Solutions, and savings & investing solutions.
1. Citigroup Inc. (NYSE:C)
Number of Hedge Fund Holders: 106
Citigroup Inc. (NYSE:C) is one of the most undervalued stocks to buy and hold for 2 years. On June 4, Citigroup announced the full redemption of two series of notes due in 2027, comprising $2.75 billion of its 1.462% Fixed Rate / Floating Rate Notes and $400 million of its Floating Rate Notes. Both redemptions are scheduled to take place on June 9, 2026.
Investors will receive the cash redemption price, which equals the par value of the notes plus any accrued and unpaid interest up to the redemption date. This payout ensures that holders of the affected securities are compensated for the early retirement of the debt.
The decision is part of Citigroup’s ongoing liability management strategy to enhance the efficiency of its capital and funding structure. The company continues to actively evaluate its debt portfolio and may pursue further redemptions or repurchases based on market conditions, regulatory changes, and broader capital objectives.
Citigroup Inc. is a major global financial services holding company offering banking, credit, markets, wealth management, and advisory services to consumers, corporations, governments, and institutions. Headquartered in New York City, the company traces its roots back to 1812.
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