On September 24, Richard Fisher, former Dallas Fed President & Jefferies senior advisor, joined ‘Closing Bell’ on CNBC to discuss how valuations are very strong and concentrated. Fed Chair Jerome Powell made a recent comment that equities are fairly highly valued, comparing it to the blowback former Chair Yellen received for calling small-cap biotech shares expensive years ago. Richard Fisher found Powell’s statement interesting and objective. To illustrate the rise in valuations, Fisher recalled that the S&P 500 bottomed at 666 on March 6, 2009. The S&P 500 closed the prior Friday at 6,666, representing a 10x increase, which he called pretty good returns for equity investors. He asserted that he cannot find anyone who doesn’t feel things are at least richly priced, if not overpriced, and noted that much of the strong valuation is concentrated in a few companies.
On the same day, Victoria Greene, CIO at G Squared Private Wealth, also appeared on CNBC to suggest that Jerome Powell’s statement that the markets are overvalued is like saying that the sky is blue. While acknowledging that nothing is cheap right now, Greene suggested that Powell’s comments were not that bad, but the market was reacting to the Fed Chair highlighting dual risks: the fight against inflation and a weakening labor market, which confirms that there is no risk-free path for the central bank.
That being said, we’re here with a list of the 10 most undervalued stocks to buy and hold for 5 years.
Methodology
We sifted through the Finviz stock screener to compile a list of the top undervalued stocks with a forward P/E ratio under 20. Then, to identify the 10 best stocks to buy and hold for 5 years, we included only those stocks that have an average expected EPS growth of at least 15% over the next 3 to 5 years, according to Wall Street estimates. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q2 2025.
Note: All data was sourced on September 30.
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 5 Years
10. Global Payments Inc. (NYSE:GPN)
Forward P/E Ratio as of September 30: 6.18
EPS Forward Long Term Growth (3-5 Year CAGR): 17.95%
Number of Hedge Fund Holders: 57
Global Payments Inc. (NYSE:GPN) is one of the most undervalued stocks to buy and hold for 5 years. On September 30, Global Payments announced the appointment of Nathan Rozof, CFA, as the head of Investor Relations. In this role, Rozof will lead the company’s investor relations strategy, serving as the primary liaison between Global Payments and the investment community.
Rozof brings over two decades of experience in finance, capital markets, and investor engagement to the position. His background includes covering the fintech and payments sectors earlier in his career as an equity research analyst, and holding senior investor relations and finance roles at several Fortune 500 companies. He has also received recognition from both Institutional Investor and IR Magazine.
Chief Financial Officer Josh Whipple stated that Rozof’s knowledge of the payments industry and the Worldpay business, combined with a proven track record of effective engagement with investors, makes him qualified to enhance the investor relations function. His appointment reflects Global Payments’ continued focus on transparency, strategic execution, and deepening engagement with its global investor base as the company advances its growth initiatives.
Global Payments Inc. (NYSE:GPN) provides payment technology and software solutions for card, check, and digital-based payments. It operates through two segments: Merchant Solutions and Issuer Solutions.
9. The Allstate Corporation (NYSE:ALL)
Forward P/E Ratio as of September 30: 9.27
EPS Forward Long Term Growth (3-5 Year CAGR): 16.59%
Number of Hedge Fund Holders: 62
The Allstate Corporation (NYSE:ALL) is one of the most undervalued stocks to buy and hold for 5 years. On October 1, Evercore ISI downgraded Allstate to In Line from Outperform with a price target of $233, up from $230. This sentiment came prior to the company’s Q3 2025 earnings report. Earlier for Q2, Allstate reported $16.6 billion in revenue, which marked a 5.8% increase year-over-year.
Net income reached $2.1 billion, while adjusted net income was $1.6 billion. Allstate also grew its customer base and increased total policies in force by 4.2% to 208 million. The company’s Property-Liability segment demonstrated robust underwriting performance, generating ~$1.3 billion in underwriting income and achieving a combined ratio of 91.1%, which is a 10-point improvement from the prior-year quarter.
The Protection Services segment, which includes Allstate Protection Plans, reported revenues of $867 million for the quarter, generating $60 million in income. The segment’s revenue increased by 16.6% over the prior year, highlighting rapid growth in appliance protection and international expansion.
The Allstate Corporation (NYSE:ALL) provides property and casualty, and other insurance products in the US and Canada. It operates in five segments: Allstate Protection, Run-off Property-Liability, Protection Services, Allstate Health & Benefits, and Corporate & Other.
