On July 17, Lori Calvasina, RBC Capital Markets head of US equity strategy, joined ‘Closing Bell’ on CNBC to discuss whether the market is fully valued at present levels. Calvasina explained that whenever the topic of the Fed’s independence and external pressure arises, she consults her rate strategist. He consistently reiterates that the Fed operates as a committee and not a single decision-maker to emphasize its collective nature. However, she also highlighted that international investors are wary of such chatter. While they may not be the largest owners of US equities, they are significant, and fund flow data shows that these international investors have been actively moving in recent years and entered H2 2025 feeling skittish. Calvasina noted that these investors have expressed concern recently about valuation levels in the US market, which is a sentiment she does not typically hear from US-based stock pickers. Calvasina observed that the market, having experienced a strong rally, is currently pricing in a lot of positive news, is eager to move past tariff concerns, and is focused on a projected strong year in 2026.
When asked if the market is fully valued, Calvasina stated that it depends on the model being used. Based on her own valuation and earnings analysis, the market has blown past fully valued when considering 2025 projections. In a conversation regarding which sector appears most mispriced heading into earnings, Calvasina revealed that RBC Capital Markets had recently upgraded materials about a week and a half prior. She explained that while materials were not super cheap, they compare favorably to the industrial sector, which is highly favored due to reshoring narratives but is trading at extremely high valuations. While acknowledging the strong fundamentals in industrials, she argued that the materials sector should benefit from many of the same drivers but offers very reasonable valuations and is experiencing a shift from negative to positive earnings revisions.
That being said, we’re here with a list of the 10 most undervalued stocks to buy and hold for 3 years.
A portfolio manager in front of their computer screen, evaluating a variety of mid-cap stocks.
Methodology
We sifted through the Finviz stock screener and financial media reports to compile a list of the top undervalued stocks (with a forward P/E ratio under 20 as of July 22) to buy and hold for the next 3 years. We then selected 10 stocks with a 3-year revenue CAGR of over 15%. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q1 2025.
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. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10 Most Undervalued Stocks to Buy and Hold for 3 Years
10. Northern Oil and Gas Inc. (NYSE:NOG)
Forward P/E Ratio as of July 22: 7.25
3-Year Revenue CAGR: 20.68%
Number of Hedge Fund Holders: 34
Northern Oil and Gas Inc. (NYSE:NOG) is one of the most undervalued stocks to buy and hold for 3 years. On July 16, Mizuho lowered its price target for Northern Oil and Gas/NOG to $32 from $33, while maintaining a Neutral rating on the shares. The adjustment came as part of Mizuho’s Q2 preview, as the firm anticipates NOG will reduce its 2025 capital expenditure budget and volume guidance due to decreased activity.
The company achieved a record Adjusted EBITDA of ~$435 million in Q1 2025. Total average daily production reached ~ 135,000 BOE per day, which was a 2.5% increase sequentially and a 13% increase year-over-year. Oil production remained flat at ~79,000 barrels per day compared to the last quarter, while gas production contributed 42% to the mix, which was up 6.5% sequentially and 14% year-over-year.
Capital expenditures in Q1 were ~$250 million, with 57% allocated to the Permian Basin. Northern Oil and Gas operates with a flexible model for capital allocation and has demonstrated strong financial performance, including 21 consecutive quarters of positive free cash flow, which total over $1.7 billion since 2020. Over 60% of its expected 2025 production is hedged.
Northern Oil and Gas Inc. (NYSE:NOG) is an independent energy company that acquires, explores, exploites, develops, and produces crude oil and natural gas properties in the US.
9. RenaissanceRe Holdings Ltd. (NYSE:RNR)
Forward P/E Ratio as of July 22: 13.23
3-Year Revenue CAGR: 33.28%
Number of Hedge Fund Holders: 40
RenaissanceRe Holdings Ltd. (NYSE:RNR) is one of the most undervalued stocks to buy and hold for 3 years. On July 24, Barclays increased its price target for RenaissanceRe to $273 from $256, while maintaining an Equal Weight rating on the shares. The revision follows RenaissanceRe’s strong Q2 2025 earnings beat.
RenaissanceRe Holdings announced its financial results for Q2 2025 on July 23 in Pembroke, Bermuda. The company reported Net Income Available to Common Shareholders of $826.5 million and Operating Income Available to Common Shareholders of $594.6 million for Q2. This translates to $17.20 per diluted common share for net income and $12.29 per diluted common share for operating income.
RenaissanceRe actively engaged in share repurchases in this quarter. During Q2, ~1.6 million common shares were repurchased at an aggregate cost of $376.4 million, with an average price of $242.18 per common share. From July 1 through July 21, an additional 293.8 thousand common shares were repurchased at a total cost of $70.2 million and an average price of $239.03 per common share.
RenaissanceRe Holdings Ltd. (NYSE:RNR) provides reinsurance and insurance products in the US and internationally. It operates through the Property and Casualty & Specialty segments.
8. Civitas Resources Inc. (NYSE:CIVI)
Forward P/E Ratio as of July 22: 5.05
3-Year Revenue CAGR: 44.69%
Number of Hedge Fund Holders: 41
Civitas Resources Inc. (NYSE:CIVI) is one of the most undervalued stocks to buy and hold for 3 years. On July 17, Piper Sandler increased the price target for Civitas Resources from $54 to $57, while maintaining an Overweight rating. The firm noted that the exploration and production investment environment remains challenging post-Q2.
This is due to fluctuating oil prices. Simultaneously, strong secular demand trends for natural gas are counteracted by high supplies and inventory builds. Despite these challenges, the long-term outlook for natural gas demand is positive. The sentiment was reinforced by the recent PA Power and Innovation Summit, which saw the announcement of $90 billion in investments for power and data center infrastructure.
In Q1 2025, the company announced a $150 million reduction in capital expenditure compared to 2024. The company also implemented a cost optimization and efficiency plan targeting an incremental $100 million in annual free cash flow, with ~40% of this benefiting H2 2025. An oil gathering agreement is expected to contribute an additional $15 million annually to free cash flow.
Civitas Resources Inc. (NYSE:CIVI) is an exploration and production company that focuses on the acquisition, development, and production of crude oil and associated liquids-rich natural gas.
7. Lantheus Holdings Inc. (NASDAQ:LNTH)
Forward P/E Ratio as of July 22: 10.55
3-Year Revenue CAGR: 41.57%
Number of Hedge Fund Holders: 43
Lantheus Holdings Inc. (NASDAQ:LNTH) is one of the most undervalued stocks to buy and hold for 3 years. Earlier on June 23, B. Riley analyst Yuan Zhi reduced the firm’s price target on Lantheus from $122 to $109, while maintaining a Buy rating on the shares. The adjustment was made following the company’s Q1 2025 financial update.
In Q1 2025, the company announced consolidated net revenue of $372.8 million, which was a 0.8% increase year-over-year. PYLARIFY sales were $257.7 million and remained flat compared to the prior year. Precision Diagnostic revenue was $104.4 million, also flat year-over-year. DEFINITY sales increased by 3.5% to $79.2 million, while TechneLite revenue decreased by 9.2% to $19.7 million due to a brief supply issue.
Lantheus experienced a decrease in profitability in Q1. Gross profit margin fell by 180 basis points to 67%. Operating expenses increased to 28.3% of net revenue, 1.47% higher than the prior year. As a result, operating profit decreased by 7.1% to $144.3 million. As of the end of Q1 2025, cash and cash equivalents stood at $938.5 million.
Lantheus Holdings Inc. (NASDAQ:LNTH) develops, manufactures, and commercializes diagnostic and therapeutic products that assist clinicians in the diagnosis and treatment of heart, cancer, and other diseases worldwide.
6. Globus Medical Inc. (NYSE:GMED)
Forward P/E Ratio as of July 22: 16.86
3-Year Revenue CAGR: 37.72%
Number of Hedge Fund Holders: 45
Globus Medical Inc. (NYSE:GMED) is one of the most undervalued stocks to buy and hold for 3 years. On July 22, Canaccord reduced its price target for Globus Medical from $97 to $90 while maintaining a Buy rating. The adjustment showed Canaccord’s updated financial model following the preliminary Q2 2025 results. The preliminary results showed revenues that align with both Canaccord’s and the Street’s consensus expectations.
In Q1 2025, the company reported revenue of $598 million, which was a decrease of 0.8% on a constant currency basis. Non-GAAP EPS increased by 9% year-over-year to $0.68. Free cash flow saw a significant increase of 493% year-over-year, reaching $141 million. The US Spine business showed 2% growth in Q1, while international spine implant growth was 1% on a constant currency basis. Enabling Technology sales, however, decreased by 31% compared to the prior year, and the combined Trauma and NSO business declined by 8% in Q1.
The company launched two new products in Q1 2025 aimed at supporting market penetration and product portfolio. The US spine business exhibited resilience with 2% growth, driven by high retention rates.
Globus Medical Inc. (NYSE:GMED) is a medical device company that develops and commercializes healthcare solutions for patients with musculoskeletal disorders in the US and internationally.
5. Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH)
Forward P/E Ratio as of July 22: 11.51
3-Year Revenue CAGR: 100.58%
Number of Hedge Fund Holders: 47
Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) is one of the most undervalued stocks to buy and hold for 3 years. On July 22, TD Cowen initiated coverage of Norwegian Cruise Line with a Buy rating and a $31 price target. The firm believes that cruise lines are an underappreciated segment of the travel industry. TD Cowen forecasts an annual revenue growth of 7% for the cruise industry through 2029.
In Q1 2025, the company met or exceeded guidance across all key metrics for the quarter. Net yields increased by 1.2% above expectations, contributing to an Adjusted EBITDA of $453 million, which also surpassed guidance. The trailing 12-month margin was 35.5%, which was a 2.8% improvement over the previous year. Adjusted EPS was $0.07, slightly below guidance due to a $0.05 foreign exchange headwind.
Positive developments for NCLH include the on-time and on-budget delivery of the new ship, Norwegian Aqua, and enhancements at Great Stirrup Cay, which include a new pier and resort-style amenities, expected to improve guest satisfaction and incremental yields. The revamped NCL app has been successful, with over 800,000 guests logging in during the quarter.
Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) is a cruise company in North America, Europe, the Asia-Pacific, and internationally.
4. Sarepta Therapeutics Inc. (NASDAQ:SRPT)
Forward P/E Ratio as of July 22: 9.84
3-Year Revenue CAGR: 42.87%
Number of Hedge Fund Holders: 47
Sarepta Therapeutics Inc. (NASDAQ:SRPT) is one of the most undervalued stocks to buy and hold for 3 years. On July 22, BMO Capital adjusted its price target for Sarepta to $25 from $50, while maintaining a Market Perform rating. The decision was made as a response to the temporary pause in Sarepta’s ELEVIDYS program. BMO Capital views this pause as an optimal decision, as refusal to comply with the FDA could lead to regulatory risks across Sarepta’s programs and hinder ELEVIDYS’ uptake.
The temporary halt in ELEVIDYS shipments in the US began at the close of business on July 22 to allow Sarepta and the FDA to complete the safety labeling update process following a patient death linked to acute liver failure and other safety concerns.
In Q1 2025, the company reported total net product revenue of $612 million, representing a 70% growth over the same quarter last year. ELEVIDYS revenue saw a 180% increase year-over-year and reached $375 million. The PMO (peptide-conjugated phosphorodiamidate morpholino oligomer) franchise revenue increased by 5% over the prior year and reached $237 million. Total revenues for the quarter were $745 million, which was an 80% increase year-over-year.
Sarepta Therapeutics Inc. (NASDAQ:SRPT) is a commercial-stage biopharmaceutical company that focuses on the discovery and development of RNA-targeted therapeutics, gene therapies, and other genetic therapeutic modalities for the treatment of rare diseases.
3. Chart Industries Inc. (NYSE:GTLS)
Forward P/E Ratio as of July 22: 14.03
3-Year Revenue CAGR: 44.93%
Number of Hedge Fund Holders: 50
Chart Industries Inc. (NYSE:GTLS) is one of the most undervalued stocks to buy and hold for 3 years. On July 11, LNG Alliance Pte Ltd, which is a provider of LNG export terminal infrastructure and supply, announced its decision to use Chart Industries’ IPSMR (Integrated Pre-cooled Single Mixed Refrigerant) process technology and modular liquefaction solution for its Amigo LNG export facility.
The facility has a capacity of 7.8 MTPA/Million Tonnes Per Annum and is located in Guaymas, Sonora, Mexico. The Amigo LNG project is designed with two trains, each with a capacity of ~3.9 MTPA, and aims to be a land-based liquefaction facility with a compact environmental footprint. Feed gas for the project will be sourced from the Permian shale basin in the US and transported to Mexico via existing pipeline networks.
Chart Industries’ IPSMR technology is known for its efficiency and flexibility, allowing for optimal matching of compression power with single cold box capacity. LNG Alliance will use Chart’s full suite of IPSMR solutions, including its mid-scale modular solution. This modular offering incorporates various components such as Mega Bay air-cooled heat exchangers, Tuf-Lite IV fans, process vessels, valving, brazed aluminum heat exchangers, and cold boxes.
Chart Industries Inc. (NYSE:GTLS) engages in the designing, engineering, and manufacturing of process technologies and equipment for the gas and liquid molecules in the US and internationally.
2. Carnival Corporation & plc (NYSE:CCL)
Forward P/E Ratio as of July 22: 15.55
3-Year Revenue CAGR: 64.29%
Number of Hedge Fund Holders: 55
Carnival Corporation & plc (NYSE:CCL) is one of the most undervalued stocks to buy and hold for 3 years. On July 19, Carnival Cruise Line officially opened Celebration Key, which is its new exclusive destination on Grand Bahama in The Bahamas. The Carnival Vista, carrying ~5,000 guests, made the inaugural visit to the new premier cruise port. The opening marks the first phase of Carnival’s initial $600 million investment in the destination.
Celebration Key is designed with five distinct areas: Paradise Plaza, Starfish Lagoon, Calypso Lagoon, Pearl Cove Beach Club, and Lokono Cove. Celebration Key is projected to initially attract over two million guests annually to Grand Bahama, with this number expected to double to four million by 2028.
More than 1,200 Bahamians have been hired to staff the destination, with many being Grand Bahama natives returning home after Hurricane Dorian in 2019.
Carnival Corporation & plc (NYSE:CCL) is a cruise company that provides leisure travel services in North America, Australia, Europe, and internationally.
1. JPMorgan Chase & Co. (NYSE:JPM)
Forward P/E Ratio as of July 22: 15.75
3-Year Revenue CAGR: 10.72%
Number of Hedge Fund Holders: 129
JPMorgan Chase & Co. (NYSE:JPM) is one of the most undervalued stocks to buy and hold for 3 years. On July 22, Tech Mahindra announced it has joined JPMorgan Chase’s Payments System Integrator Program. The collaboration empowers global enterprises to upgrade their payment infrastructure and offer more personalized customer experiences.
Tech Mahindra brings expertise in real-time payments, data reconciliation, and enterprise resource planning/ERP implementations, with over 1,800 SAP implementations under its belt.
The partnership is part of the JPMorgan Payments Partner Network, which comprises over 80 third-party relationships designed to meet customers’ end-to-end payment needs. As part of the program, Tech Mahindra will support the global deployment of JPMorgan Payments’ next-gen solutions, using its strong delivery capabilities and broad market presence across key industries and geographies.
JPMorgan Chase & Co. (NYSE:JPM) is a financial services company that operates through three segments: Consumer & Community Banking, Commercial & Investment Banking, and Asset & Wealth Management.
While we acknowledge the potential of JPM 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 JPM and that has 100x upside potential, check out our report about the cheapest AI stock.
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Disclosure: None.
