In this article, we will discuss the 10 Oversold Fundamentally Strong Stocks to Buy Now
As per DJE Kapital AG, a leading bank-independent financial services provider, July has often been a favorable month, and this held true for July 2025 also. The MSCI World Index in EUR increased during the month thanks to the favourable developments on the US stock markets. On the other hand, European markets were weaker in July. At the sector level, technology stocks remained in high demand worldwide, while pharmaceuticals/healthcare and consumer staples stocks disappointed.
What’s Next?
DJE Kapital AG is constructive about the markets over the medium term. Among the more aggressive sectors, the firm believes that the technology has been looking interesting, mainly in the areas of AI and software. As a result of Trump’s “Big Beautiful Bill,” the US economy and US earnings are expected to perform well overall as a result of tax breaks, the possibility of special depreciation allowances, as well as elevated investments.
Furthermore, the firm added that the government and corporate spending on infrastructure—mainly in the energy sector—remains high, irrespective of the tariff dispute. Notably, the well-positioned companies continue to benefit from this trend.
Amidst these developments, we will now have a look at the 10 Oversold Fundamentally Strong Stocks to Buy Now
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Our Methodology
To list the 10 Oversold Fundamentally Strong Stocks to Buy Now, we sifted through iShares MSCI USA Quality Factor ETF and Invesco S&P 500® Quality ETF to shortlist fundamentally strong stocks. We then selected stocks that have declined at least ~25% over the past six months but are also popular among hedge funds. We have mentioned the hedge fund sentiment around each stock, 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).
Note: All the data is as of August 13
10 Oversold Fundamentally Strong Stocks to Buy Now
10. Texas Pacific Land Corporation (NYSE:TPL)
% Decline in 6 Months: ~36.2%
Number of Hedge Fund Holders: 31
Texas Pacific Land Corporation (NYSE:TPL) is one of the Oversold Fundamentally Strong Stocks to Buy Now. On August 6, the company released its financial and operating results for Q2 2025, highlighting its financial resilience amid commodity price fluctuations, with quarterly revenue records witnessed in SLEM and produced water royalties. Texas Pacific Land Corporation (NYSE:TPL)’s significant footprint throughout royalties, surface, and water positions it to extract sources of value from the Permian’s exceptional resource.
Texas Pacific Land Corporation (NYSE:TPL)’s total revenues for the 6 months ended June 30, 2025 came in at $383.5 million versus $346.5 million for the 6 months to June 30, 2024. The rise in total revenues was mainly because of a $24.3 million rise in oil and gas royalty revenue, as well as $17.2 million increase in easements and other surface-related income. As of June 30, 2025, Texas Pacific Land Corporation (NYSE:TPL)’s royalty acreage had an estimated 6.0 net well permits, 11.1 net drilled but uncompleted wells, and 5.1 net completed but not producing wells.
In particular, record produced water royalty revenue highlights Texas Pacific Land Corporation (NYSE:TPL)’s unique position to provide essential solutions and capture high-quality cash flows. Wedgewood Partners, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“Texas Pacific Land Corporation (NYSE:TPL) was a top contributor to performance during both the quarter and the year. Texas Pacific Land continues to be an extraordinarily unique and profitable business. The Company owns over 800,000 surface acres of land in the Texas Permian Basin. The vast majority of this land was acquired in the year 1888 and more recently (i.e. the last 15 years) this land became highly productive oil and gas royalty acreage thanks to modern drilling and completion techniques and technologies. Despite all of these deserved accolades, we liquidated our positions after the stock rallied quite sharply upon being consecutively added to two major stock indexes over the past seven months. The earnings power of the Company has not substantially changed over the past seven months (for better or worse). However, passive indexes and the traders and managers that closely follow and benchmark against those indexes effectively tripled their appraisal of the Company’s corporate value, while that value never changed. We will continue to monitor Texas Paci7ic Land from the sidelines and would hope to invest in them again, perhaps after the market’s “animal spirits” subside.”
9. Waters Corporation (NYSE:WAT)
% Decline in 6 Months: ~25%
Number of Hedge Fund Holders: 33
Waters Corporation (NYSE:WAT) is one of the Oversold Fundamentally Strong Stocks to Buy Now. On August 4, the company released its financial results for Q2 2025, with sales coming at $771 million, reflecting 9% growth (as reported) and 8% (in constant currency) versus the sales of $709 million for Q2 2024. Waters Corporation (NYSE:WAT)’s results were aided by strong instrument replacement trends–mainly among the large pharma and CDMO customers.
The company witnessed healthy execution against its commercial growth initiatives, rapid uptake of new products, and contribution from incremental growth vectors like GLP-1s, PFAS, and generics. Therefore, Waters Corporation (NYSE:WAT) raised its full-year sales and earnings guidance. Net of currency translation, the company expects FY 2025 reported sales growth of 5.0% – 7.0%, and non-GAAP EPS of between $12.95 – $13.05.
Waters Corporation (NYSE:WAT)’s combination with BD Biosciences & Diagnostic Solutions ramps up its strategy into multiple high-growth adjacencies, while, at the same time, enhancing the reach of its proven execution model into resilient, high-volume end markets. The company remains well-placed to fuel significant value creation, with synergies creating immediate impact. Baron Funds, an investment management company, released its Q1 2025 investor letter. Here is what the fund said:
“We initiated a position in Waters Corporation (NYSE:WAT), a leading provider of analytical instruments and consumables for high volume, regulated applications, including biopharmaceutical quality control, late-stage drug development, food and environmental safety, chemical analysis and materials testing. Waters has a particularly strong market position in biopharmaceutical quality control where its liquid chromatography instruments are used along with its proprietary column chemistry to efficiently separate contaminants from the drug mixture for analysis. This is coupled with their Empower software, which is a one-stop platform compatible for readout across multiple analyzer types, such as mass spectrometry, UV spectroscopy, and multi-angle light scattering. Empower takes all this information and pipes it to regulators with robust data integrity and audit trail. Currently, around 80% of novel drugs filed with regulators use this software, providing a competitive advantage. Moreover, the company’s products are specified in the regulatory approval process, making them very sticky.
Historically, Waters’ revenue has grown in the mid-single digits annually. Going forward, Waters has several idiosyncratic growth drivers which could boost growth above the historic rate: India generics (driven by a larger number of blockbuster drugs going off patent over the next five years), GLP-1 testing (driven by explosive growth in the anti-obesity drug category over the coming decade), biologics (driven by growth in large molecule testing), and PFAS testing (driven by new regulations banning forever chemicals). In addition, management seeks to capture greater price contributions versus historic rates. On top of this, Waters should benefit from a replacement cycle in its instrument business over the next two to four years. Based on these growth drivers, revenue growth could accelerate to the high single digits to low double digits in the coming years. At a recent Investor Day, management established a goal to achieve 400 basis points of operating margin expansion over the next five years, from the company’s industry leading 31% operating margin in 2024 to 35% in 2030. With its strong free cash flow generation, Waters can redeploy capital into M&A and share repurchases to drive solid double-digit annual earnings per share growth.”
Waters Corporation (NYSE:WAT) offers analytical workflow solutions.
8. Molina Healthcare, Inc. (NYSE:MOH)
% Decline in 6 Months: ~41.8%
Number of Hedge Fund Holders: 38
Molina Healthcare, Inc. (NYSE:MOH) is one of the Oversold Fundamentally Strong Stocks to Buy Now. On July 28, Ryan Langston, an analyst from TD Cowen, reiterated a “Buy” rating on the company’s stock, and the associated price target was lowered to $203.00. The analyst noted that Molina Healthcare, Inc. (NYSE:MOH) continues to effectively manage the medical costs in the challenging environment, mainly in Medicaid, where it is witnessing pressures in behavioral, pharmacy, and inpatient/outpatient care.
Molina Healthcare, Inc. (NYSE:MOH) continues to actively work with state partners in order to restore Medicaid rates to appropriate levels. It has considered increased cost trends in the Medicare and Marketplace bids for 2026. Despite challenges, Molina Healthcare, Inc. (NYSE:MOH)’s strategic efforts and adjustments in rate filings reflect growth potential, justifying the analyst’s rating. For FY 2025, the Premium revenue is expected to be ~$42 billion, reflecting an increase of ~9% from FY 2024. Molina Healthcare, Inc. (NYSE:MOH) expects its FY 2025 GAAP earnings to be no less than $16.90 per diluted share.
Oakmark Funds, advised by Harris Associates, released its Q2 2025 investor letter. Here is what the fund said:
“Molina Healthcare, Inc. (NYSE:MOH) is a leading managed care company. The company is the fourth largest player in managed Medicaid and has consistently delivered industry-leading margins historically. In our view, this is thanks to Molina Healthcare’s exceptional management team and culture of operational excellence. Moreover, we think Molina Healthcare has a long runway for growth given its small scale relative to peers and untapped opportunities in their Medicare and Marketplace business segments. Recently, the Medicaid industry has come under substantial pressure due to a challenging redetermination cycle and additional headwinds from legislation under the current administration. This provided the opportunity to, in our view, purchase shares in a best-in-class managed care company at depressed valuation on trough earnings.”
7. lululemon athletica inc. (NASDAQ:LULU)
% Decline in 6 Months: ~51.1%
Number of Hedge Fund Holders: 48
lululemon athletica inc. (NASDAQ:LULU) is one of the Oversold Fundamentally Strong Stocks to Buy Now. On August 11, Baird reduced the price objective on the company’s stock to $260 from $340, keeping an “Outperform” rating, as reported by The Fly. The firm updated the model after the recent selloff. In Q1 2025, lululemon athletica inc. (NASDAQ:LULU) saw growth throughout channels, categories, and markets, which include the US, reflecting the continued strength and agility of its business model.
lululemon athletica inc. (NASDAQ:LULU) added 3 net new company-operated stores during Q1 2025, ending with 770 stores. The company’s gross margin came in at 58.3% in Q1 2025 as compared to 57.7% in Q1 2024. The rise was mainly because of a net increase in product margin of 110 bps, comprising a net increase of 130 bps due to reduced product costs and increased average unit retail, and lower damages, partially offset by elevated freight costs, and an unfavorable impact of foreign currency exchange rates of 20 bps.
Diamond Hill Capital, an investment management company, released its Q1 2025 investor letter. Here is what the fund said:
“Other bottom contributors in Q1 included Lululemon athletica inc. (NASDAQ:LULU), General Motors and Capital One. Shares of athletic apparel manufacturer lululemon were pressured amid ongoing concerns about potential brand saturation in the Americas, its largest market. However, we believe the company is operating well and is positioned to improve US sales performance while continuing to grow international sales — factors that make the current valuation compelling, in our view.”
6. Gartner, Inc. (NYSE:IT)
% Decline in 6 Months: ~55.3%
Number of Hedge Fund Holders: 51
Gartner, Inc. (NYSE:IT) is one of the Oversold Fundamentally Strong Stocks to Buy Now. On August 6 BMO Capital analyst Jeffrey Silber reduced the price objective on the company’s stock to $272 from $409, while keeping a “Market Perform” rating, as reported by The Fly. As per the analyst, Gartner, Inc. (NYSE:IT) posted a slight margin-driven beat, but its Contract Value growth slowed considering the federal government pressure as well as tariff-impacted industries.
Gartner, Inc. (NYSE:IT) continues to make adaptations to ramp up its performance going forward. With the US federal government, the company is ensuring to stay aligned with the changing priorities, especially improving efficiency. With the changing tariff, the number of clients that are interested in cost optimization increased dramatically. Gartner, Inc. (NYSE:IT) has expanded its capabilities, such as certifying the client-facing associates on delivering such services.
Furthermore, the company has been making adaptations in sales and services to ramp up growth. Gartner, Inc. (NYSE:IT) rolled out a new program to better equip client-facing associates with comprehensive knowledge on the hot topics, such as AI and cost optimization. Gartner, Inc. (NYSE:IT) expects these and other adaptations to help it get back to the double-digit growth.
Madison Investments, an investment advisor, released its Q2 2025 investor letter. Here is what the fund said:
“We initiated positions in Airbnb, CDW Corporation and Gartner, Inc. (NYSE:IT) and sold Berkshire Hathaway. The final new investment during the second quarter was in Gartner, a global leader in technology research. The company has an attractive business model characterized by recurring revenues, strong pricing power, negative working capital and high return on invested capital. The firm maintains a strong competitive advantage from its renowned brand as well as its unmatched scale and resulting ‘information network.’ We believe the company’s long-term growth outlook is excellent due to the increasing need for sophisticated technology research, coupled with Gartner’s small share of its addressable market. The stock has underperformed recently on concerns over slowing subscription growth, which we believe will prove to be short-lived. The currently depressed valuation was too attractive to pass up.”
5. Deckers Outdoor Corporation (NYSE:DECK)
% Decline in 6 Months: ~34.3%
Number of Hedge Fund Holders: 63
Deckers Outdoor Corporation (NYSE:DECK) is one of the Oversold Fundamentally Strong Stocks to Buy Now. On July 31, analyst Christopher Nardone from Bank of America Securities reiterated a “Hold” rating on the company’s stock and has a price objective of $120.00. The analyst’s rating is backed by a combination of factors affecting the company’s financial performance. Deckers Outdoor Corporation (NYSE:DECK)’s strategic buybacks and remaining capacity under the stock repurchase program are the favourable indicators, yet uncertainties related to the direct-to-consumer softness, mainly in the US market, balance the recent positive earnings revisions, according to the analyst.
In Q1 2026, Deckers Outdoor Corporation (NYSE:DECK)’s net sales rose 16.9% to $964.5 million as compared to $825.3 million in Q1 2025. On a constant currency basis, net sales rose 16.3%. Notably, the HOKA® brand net sales rose 19.8% to $653.1 million as compared to $545.2 million. In Q1 2026, the company’s brands gained market share while maintaining a high degree of full price integrity. The strength of Deckers Outdoor Corporation (NYSE:DECK)’s business was aided by the strong growth in its international markets, with HOKA and UGG contributing to the company’s 50% increase in international revenue amidst a choppy US consumer environment.
Fidelity Investments, an investment management company, recently released its Q1 2025 investor letter. Here is what the fund said:
“Underweighting shares of footwear and apparel maker Deckers Outdoor Corporation (NYSE:DECK) also notably helped. The stock plunged in January after the firm’s fiscal-year revenue forecast fell short of Wall Street analysts’ expectations. Despite reporting higher sales in its two crucial brands, UGG® and HOKA®, analysts were concerned about the company’s expansion capabilities amid declining sales in its largest market, the U.S., and other challenges.”
4. Accenture plc (NYSE:ACN)
% Decline in 6 Months: ~38.8%
Number of Hedge Fund Holders: 69
Accenture plc (NYSE:ACN) is one of the Oversold Fundamentally Strong Stocks to Buy Now. On July 28, Morgan Stanley analyst James Faucette maintained a “Hold” rating on the company’s stock and set a price objective of $325.00. The analyst’s rating is backed by a combination of factors affecting Accenture plc (NYSE:ACN)’s current and future business landscape. One important reason is its ongoing momentum in Managed Services, which is supported by the client demand for cost-saving deals.
As per the analyst, such deals tend to be long-term and support in establishing a recurring revenue stream, although the consulting segment continues to face challenges because of limited discretionary spending. Furthermore, Accenture plc (NYSE:ACN)’s Gen AI strategy is evolving, with an emphasis on integrating agentic and human-based solutions. Notably, this evolution needs new pricing structures, which can impact margins and make the development of more proprietary intellectual property necessary, added Faucette.
The analyst also highlighted the potential shift in Accenture plc (NYSE:ACN)’s investment strategy. Historically, it was dependent on acquisitions in a bid to maintain its technological edge, but now there might be a greater focus on direct development investment in the future. This transition can provide better returns on investment, although there can be a wide range of potential outcomes. Madison Investments, an investment advisor, released its Q1 2025 investor letter. Here is what the fund said:
“Accenture plc (NYSE:ACN) shares were weak in the quarter due to possible contract cancelations from the U.S. Federal government. While some lost business does seem likely, Accenture’s overall exposure to this end market is limited and the headwind appears manageable.”
3. Eli Lilly and Company (NYSE:LLY)
% Decline in 6 Months: ~26.1%
Number of Hedge Fund Holders: 119
Eli Lilly and Company (NYSE:LLY) is one of the Oversold Fundamentally Strong Stocks to Buy Now. On July 30, the company announced results from the long-term extension (LTE) of the Phase 3 TRAILBLAZER-ALZ 2 study, demonstrating that participants treated with Kisunla (donanemab-azbt) showcased slowing of decline, a benefit which continued to grow over 3 years as compared to an untreated external cohort from the Alzheimer’s Disease Neuroimaging Initiative (ADNI). The participants showed meaningful outcomes, strengthening the long-term value of early intervention.
To provide a brief background, the TRAILBLAZER-ALZ 2 LTE study was a Phase 3, double-blind extension of the original TRAILBLAZER-ALZ 2 trial, assessing the efficacy and safety of Kisunla in individuals having early symptomatic Alzheimer’s disease. The participants who were originally treated with Kisunla either continued the treatment or were switched to a placebo. Notably, the ones initially on placebo began Kisunla in a blinded manner.
Eli Lilly and Company (NYSE:LLY) also highlighted that an earlier initiation of Kisunla reduced the risk of progression to the next stage of disease by 27% on Clinical Dementia Rating-Global Score (CDR-G). Notably, in Q2 2025, Eli Lilly and Company (NYSE:LLY)’s net income and EPS came in at $5.66 billion and $6.29, respectively, as compared to the net income of $2.97 billion and EPS of $3.28 in Q2 2024. Furthermore, the EPS in Q2 2025 and Q2 2024 both included acquired IPR&D charges of $0.14. RiverPark Advisors, an investment advisory firm and sponsor of the RiverPark family of mutual funds, released its Q2 2025 investor letter. Here is what the fund said:
“Eli Lilly and Company (NYSE:LLY): LLY shares declined during the quarter despite strong top-line growth, as the company missed earnings expectations and faced heightened scrutiny around GLP-1 pricing dynamics. In Q2, Mounjaro sales rose sharply to $3.8 billion and Zepbound reached $2.3 billion in revenue. However, EPS came in below consensus due to lower pricing and temporary supply disruptions.
The market reacted to news that certain payers were shifting GLP-1 drugs off preferred formularies (insurance companys’ lists of approved drugs), raising concerns about future prescription growth. While the underlying demand remains robust, competitive dynamics and manufacturing constraints led to investor caution. Volatility in the broader weight-loss drug space also contributed to relative weakness.
Despite short-term pricing concerns, we believe Lilly is well positioned for multi-year growth. Its leadership in obesity and diabetes treatments, combined with a promising late-stage pipeline in Alzheimer’s, immunology, and oncology, offers significant upside.”
2. UnitedHealth Group Incorporated (NYSE:UNH)
% Decline in 6 Months: ~50.4%
Number of Hedge Fund Holders: 139
UnitedHealth Group Incorporated (NYSE:UNH) is one of the Oversold Fundamentally Strong Stocks to Buy Now. On August 7, Mizuho analyst Ann Hynes kept her “Buy” rating, expecting long-term value despite reducing the price objective to $300. The analyst noted that the company has reinstated its 2025 earnings guidance. The analyst believes that pricing pressure and increased medical cost trends will continue into 2026. Furthermore, the analyst also highlighted the underperformance in Optum Health’s value-based care and Optum Insight segments. Despite these factors, Hynes opines that UnitedHealth Group Incorporated (NYSE:UNH)’s scale, market position, and diversified business are the key strengths, and believes that the stock’s valuation is attractive.
UnitedHealth Group Incorporated (NYSE:UNH)’s Q2 2025 revenues increased $12.8 billion YoY to $111.6 billion. This was aided by growth in UnitedHealthcare and Optum. Notably, the Q2 2025 consolidated medical care ratio stood at 89.4%, reflecting an increase of 430 bps YoY. This was mainly because of medical cost trends, which significantly surpassed pricing trends, such as both unit costs and the intensity of services delivered, and the ongoing impacts of Medicare funding reductions.
Hotchkis & Wiley, an investment management company, released its Q2 2025 investor letter and mentioned UnitedHealth Group Incorporated (NYSE:UNH). Here is what the fund said:
“UnitedHealth Group Incorporated (NYSE:UNH) is a large US health insurer. Until very recently, UNH traded at a material premium to its peers, reflecting its status as a premium growth stock with momentum. We did not own the stock. However, recent negative headlines, combined with the first earnings miss in 10 years, resulted in a >50% selloff in the company’s shares. This decline contributed positively to the strategy’s relative performance vs. the index, where UNH was a meaningful weight. We purchased UNH shares after the selloff at what we believe is a compelling valuation.”
1. Salesforce, Inc. (NYSE:CRM)
% Decline in 6 Months: ~29.7%
Number of Hedge Fund Holders: 140
Salesforce, Inc. (NYSE:CRM) is one of the Oversold Fundamentally Strong Stocks to Buy Now. On August 7, Sprout Social announced an expanded relationship with Salesforce, Inc. (NYSE:CRM) as the first social media management platform to develop a connection with Salesforce Digital Engagement, utilising their Bring Your Own Channel architecture. In collaboration with Salesforce, Inc. (NYSE:CRM), the company would bring social channels, such as Instagram, LinkedIn, X, Facebook Messenger, and WhatsApp, directly into Salesforce.
Salesforce, Inc. (NYSE:CRM) released its results for Q1 2026, with its current remaining performance obligation coming at $29.6 billion, reflecting a rise of 12% YoY and 11% in CC. The company raised its FY 2026 revenue guidance to $41 billion – $41.3 billion, reflecting an increase of $400 million on the high-end due to the foreign exchange tailwinds. Furthermore, the company has reiterated its subscription and support revenue growth of ~9% YoY in constant currency. Salesforce, Inc. (NYSE:CRM)’s guidance demonstrates a consistent demand environment.
Diamond Hill Capital, an investment management company, released its Q1 2025 investor letter. Here is what the fund said:
“As volatility picked up sharply in the quarter, we were active in the portfolio — and we anticipate that as volatility continues into Q2, we will likewise attempt to capitalize on compelling opportunities to reposition the portfolio for the period ahead. Among the new positions we initiated in Q1 were long positions in Salesforce, Inc. (NYSE:CRM) and Capital One, as well as short positions in Matson and eBay.
Salesforce provides customer relationship management (CRM) technology to companies globally. We believe the company is well-positioned to reverse recently unfavorable cyclicality and capitalize on go-to-market enhancements, price increases and GenAI revenue. As the company evolves its go-to-market strategy, shifts its sales channel mix, consolidates its tech stack and transitions to third-party data centers, we anticipate Salesforce should meaningfully expand margins. Shares were trading at an attractive discount relative to our estimate of intrinsic value, and so we capitalized on the opportunity to initiate a position.”
While we acknowledge the potential of CRM 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 CRM and that has 100x upside potential, check out our report about this cheapest AI stock.
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