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.
Our 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.
8. Tenet Healthcare Corporation (NYSE:THC)
Forward P/E Ratio as of September 30: 13.05
EPS Forward Long Term Growth (3-5 Year CAGR): 16.12%
Number of Hedge Fund Holders: 63
Tenet Healthcare Corporation (NYSE:THC) is one of the most undervalued stocks to buy and hold for 5 years. On September 18, Barclays raised the firm’s price target on Tenet Healthcare to $229 from $208, while keeping an Overweight rating on the shares. The firm provided this sentiment as it incorporated updated price targets across the healthcare facilities and managed care group.
Earlier for Q2 2025, Tenet Healthcare reported a revenue of $5.27 billion, which was a 3.29% year-over-year improvement attributed to attractive same-store revenue growth, operational improvements, higher patient acuity, favorable payer mix, and expense management. The Ambulatory Care segment, which includes United Surgical Partners International/USPI, was a major driver of growth, reporting $498 million in Adjusted EBITDA, which showed an 11.4% increase.
This growth was fueled by a strong 7.7% increase in same-facility system-wide net patient service revenues and an 8.3% rise in net revenue per case, primarily due to favorable case mix and a focus on higher acuity volumes. The Hospital Operations and Services segment also saw strong growth, with Adjusted EBITDA of $623 million compared to $498 million in the prior year, benefiting from a 5.2% increase in net patient service revenue per adjusted admission.
Tenet Healthcare Corporation (NYSE:THC) is a diversified healthcare services company in the US that operates through two segments: Hospital Operations & Services and Ambulatory Care.
7. Bristol-Myers Squibb Company (NYSE:BMY)
Forward P/E Ratio as of September 30: 7.32
EPS Forward Long Term Growth (3-5 Year CAGR): 60.65%
Number of Hedge Fund Holders: 67
Bristol-Myers Squibb Company (NYSE:BMY) is one of the most undervalued stocks to buy and hold for 5 years. On October 1, Bristol-Myers Squibb, Takeda Pharmaceuticals (NYSE:TAK), and Astex Pharmaceuticals agreed to collaborate and pool proprietary data for drug discovery using an AI model. These companies are joining an existing consortium that already includes AbbVie Inc. (NYSE:ABBV) and Johnson & Johnson (NYSE:JNJ).
The pharmaceutical companies will contribute data from several thousand experimentally determined protein–small molecule structures to train an AI model called OpenFold3. The initiative is using a federated data sharing model provided by Apheris, a life sciences company based in Germany. This model allows the aggregation of diverse data sets from multiple companies while ensuring that each sensitive dataset remains securely in its original location.
By pooling these extensive datasets, the goal of the initiative is to improve the accuracy of OpenFold3 in predicting the interactions between proteins and small molecules, which is a critical step in drug discovery and development. OpenFold3 is the flagship project of the industry-led AI Structural Biology Network, which is conducted in collaboration with the AlQuraishi Lab at Columbia University.
Bristol-Myers Squibb Company (NYSE:BMY) discovers, develops, licenses, manufactures, markets, distributes, and sells biopharmaceutical products worldwide.
6. Gilead Sciences Inc. (NASDAQ:GILD)
Forward P/E Ratio as of September 30: 12.80
EPS Forward Long Term Growth (3-5 Year CAGR): 22.14%
Number of Hedge Fund Holders: 71
Gilead Sciences Inc. (NASDAQ:GILD) is one of the most undervalued stocks to buy and hold for 5 years. On September 25, Gilead Sciences announced that its Gilead Foundation has committed more than $6.5 million in new grant funding to strengthen Science, Technology, Engineering, and Math/STEM education pathways. The funding is part of an ongoing commitment to cultivate a robust talent pipeline from a broad range of backgrounds in the San Francisco Bay Area and beyond.
The investment addresses a critical need, as STEM skills are projected to be essential for 80% of all jobs by the end of the decade, and the US faces a projected shortfall of 1.4 million skilled STEM workers by 2030. The recent grant commitments will support organizations that work to strengthen STEM learning opportunities for students from elementary school through college.
The major allocations include a $1 million grant to the Boys and Girls Clubs of America to support STEM programs for elementary through high school students at eight sites across the Bay Area, Los Angeles, Maryland, Washington DC, New Jersey, and North Carolina. Additionally, a $500,000 grant was awarded to the San Mateo Foster City Education Foundation to boost STEM education for elementary and middle school students in the San Mateo-Foster City School District.
Gilead Sciences Inc. (NASDAQ:GILD) is a biopharmaceutical company that discovers, develops, and commercializes medicines in the areas of unmet medical need in the US, Europe, and internationally.
5. NRG Energy Inc. (NYSE:NRG)
Forward P/E Ratio as of September 30: 19.65
EPS Forward Long Term Growth (3-5 Year CAGR): 15.70%
Number of Hedge Fund Holders: 73
NRG Energy Inc. (NYSE:NRG) is one of the most undervalued stocks to buy and hold for 5 years. On September 23, LandBridge Company LLC (NYSE:LB) announced that it has entered into a strategic agreement with NRG Energy regarding a potential data center site in Reeves County, Texas, located in the Delaware Basin.
The collaboration is a significant step in LandBridge’s powered land strategy, highlighting its value to both power generators and digital infrastructure developers. The site is being explored to potentially host a 1,100 MW grid-connected natural gas power generation facility, which NRG could construct if a suitable power purchase agreement is secured with a data center customer.
If the project progresses, initial air permit applications and electric interconnection requests have been submitted for an in-service date as early as year-end 2029. LandBridge’s site is advantageous due to its location adjacent to the Waha Gas market hub, providing direct access to substantial existing low-cost natural gas and transmission infrastructure to support the region and future operations.
NRG Energy Inc. (NYSE:NRG) is an energy and home services company in the US and Canada. It serves residential, commercial, government, industrial, and wholesale customers.
LandBridge Company (NYSE:LB) owns and manages land and resources to support and enhance oil and natural gas development in the US.
4. T-Mobile US Inc. (NASDAQ:TMUS)
Forward P/E Ratio as of September 30: 18.35
EPS Forward Long Term Growth (3-5 Year CAGR): 17.19%
Number of Hedge Fund Holders: 76
T-Mobile US Inc. (NASDAQ:TMUS) is one of the most undervalued stocks to buy and hold for 5 years. On September 22, T-Mobile announced a leadership change as part of its succession plan. The company is appointing Srini Gopalan, currently the Chief Operating Officer, as its next Chief Executive Officer/CEO. Gopalan will officially step into the CEO role on November 1.
Gopalan succeeds Mike Sievert, who will transition into a new position as Vice Chairman. Sievert will not be stepping away entirely; he will remain on the board and continue to help shape T-Mobile’s strategy, innovation, and talent development during the handoff.
The transition is designed to ensure continuity while giving the new leader room to guide the company’s next chapter, which includes 5G expansion. Srini Gopalan brings substantial telecom experience to the role, having most recently led Deutsche Telekom’s German business before joining T-Mobile.
T-Mobile US Inc. (NASDAQ:TMUS) provides wireless communications services in the US, Puerto Rico, and the United States Virgin Islands.
3. KKR & Co. Inc. (NYSE:KKR)
Forward P/E Ratio as of September 30: 19.42
EPS Forward Long Term Growth (3-5 Year CAGR): 21.27%
Number of Hedge Fund Holders: 84
KKR & Co. Inc. (NYSE:KKR) is one of the most undervalued stocks to buy and hold for 5 years. On September 24, KKR & Co. announced that Craig Arnold has been appointed to its Board of Directors, with the appointment becoming effective on September 23.
The appointment of Arnold, who is the former Chairman and Chief Executive Officer of Eaton Corporation (a global intelligent power management company), increases the number of independent directors to eleven, out of a total of fifteen Board seats.
KKR’s other Board members include its Co-Founders and Co-Executive Chairmen, Henry Kravis and George Roberts; Co-Chief Executive Officers, Joseph Bae and Scott Nuttall; and eleven independent directors, including the newly appointed Arnold. The other independent members are Timothy Barakett, Adriane Brown, Matthew Cohler, Mary Dillon, Arturo Gutiérrez Hernández, Xavier Niel, Patricia Russo, Kimberly Ross, Robert Scully, and Evan Spiegel.
KKR & Co. Inc. (NYSE:KKR) is a private equity and real estate investment firm specializing in direct and fund-of-fund investments.
2. Pinterest Inc. (NYSE:PINS)
Forward P/E Ratio as of September 30: 15.58
EPS Forward Long Term Growth (3-5 Year CAGR): 20.55%
Number of Hedge Fund Holders: 93
Pinterest Inc. (NYSE:PINS) is one of the most undervalued stocks to buy and hold for 5 years. On September 18, Pinterest announced that Emily Reuter, the Chief Financial Officer/CFO of Maplebear Inc. or Instacart (NASDAQ:CART), has been appointed to its Board of Directors. Reuter brings significant executive experience, having successfully scaled dynamic technology and e-commerce businesses, including Instacart and Uber (NYSE:UBER).
Pinterest CEO Bill Ready stated that Reuter’s experience will be invaluable as the company executes its strategy of becoming a global leader in AI-powered shopping. Reuter joined Instacart in 2024 and currently leads the company’s finance, accounting, and corporate development functions as CFO.
Prior to Instacart, she spent a ~decade at Uber in various senior finance and operational roles, including serving as CFO for its most profitable segment, the Mobility business. Reuter expressed her anticipation for the role, noting that Pinterest, with its over half a billion monthly active users worldwide, is uniquely positioned to expand its global scale through technology and AI.
Pinterest Inc. (NYSE:PINS) is a visual search and discovery platform in the US, Canada, Europe, and internationally.
1. Citigroup Inc. (NYSE:C)
Forward P/E Ratio as of September 30: 10.48
EPS Forward Long Term Growth (3-5 Year CAGR): 25.82%
Number of Hedge Fund Holders: 102
Citigroup Inc. (NYSE:C) is one of the most undervalued stocks to buy and hold for 5 years. On October 1, Citi Investor Services, the provider of the bank’s post-trade platform, announced a major advancement in real-time asset servicing with the launch of its Single Event Processing/SEP technology. Citi anticipates that the majority of its custody flows will be processed using SEP by 2026.
The SEP technology unifies Citi’s global and direct custody infrastructure, allowing every asset servicing transaction to be processed in real-time through a single, seamless flow. The integration effectively delivers Citi’s custody network of over 100 markets, including its proprietary direct custody network of over 63 markets, to clients on a single platform.
The shift to real-time processing helps clients move away from the typically manual, fragmented, and slow processes associated with asset servicing. Since the launch of SEP, event creation now takes minutes instead of hours, and payments are being processed in less than five minutes, bringing clients closer to the local market.
Citigroup Inc. (NYSE:C) is a diversified financial services holding company that provides various financial products and services to consumers, corporations, governments, and institutions.
While we acknowledge the potential of C 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 C and that has 100x upside potential, check out our report about this cheapest AI stock.
READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.
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