On June 24, Paul Hickey, Bespoke Investment Group co-founder, joined ‘Squawk Box’ on CNBC to suggest that periods of widespread fear often present good buying opportunities. He recalls being on air in April when the market was down by about 20%, and despite numerous negative headlines suggesting a cataclysm, the market had already begun to recover. He emphasized that the worst news was already priced in at that point, and the market was starting to look past the bad news. He noted the significant recovery in the current market and addressed the question of whether the market will now trade sideways or give back some gains. He explained that historically, two-month rallies with a 20% gain have more often been the beginning of a rally rather than its end. He acknowledged a slight difference in the current situation, as the market is near 52-week lows, unlike some historical examples where similar rallies occurred while the market was closer to or at 52-week highs, yet continued to climb.
Citing these factors as the reason driving his sentiment, Hickey believes that there are more gains ahead for the second half of the year, particularly in an environment where inflation may not materialize as widely expected. This could potentially create a scenario where the Fed cuts rates for good reasons rather than bad ones. Hickey asserted, therefore, that the market could match old highs. He believes in listening to the signals that the market provides, regardless of how robust economic models might seem.
That being said, we’re here with a list of the 10 undervalued S&P 500 stocks to buy according to hedge funds.
A broker trading stocks on a financial trading floor, representing the investment approach of the company.
Methodology
We first used the Finviz stock screener to compile a list of undervalued S&P 500 stocks that had a forward P/E ratio under 20. We then selected the 10 stocks that were the most popular among elite hedge funds and that analysts were bullish on. 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 Undervalued S&P 500 Stocks to Buy According to Hedge Funds
10. Fiserv Inc. (NYSE:FI)
Forward P/E Ratio as of June 25: 16.67
Number of Hedge Fund Holders: 72
Fiserv Inc. (NYSE:FI) is one of the undervalued S&P 500 stocks to buy according to hedge funds. On June 24, Mastercard Incorporated (NYSE:MA) and Fiserv announced that the companies are expanding their partnership to integrate Fiserv’s new programmable and blockchain-based stablecoin, called FIUSD, into Mastercard’s global payment network.
The partnership will enable seamless on/off-ramping and allow consumers and businesses to easily transition between fiat currencies and FIUSD. Mastercard will also facilitate FIUSD as a settlement option for its global acquirers, which means that merchants can receive payments in FIUSD regardless of the original payment method used.
A key component of this integration involves the Mastercard Multi-Token Network/MTN. Fiserv’s Digital Asset Platform, which is powered by Finxact, will use MTN to support programmable on-chain commerce for banks. Furthermore, the collaboration will lead to the issuance of stablecoin-linked cards and enable FIUSD transactions at any of the over 150 million Mastercard-accepting locations worldwide.
Fiserv Inc. (NYSE:FI) provides payments and financial services technology solutions internationally. Mastercard Incorporated (NYSE:MA) is a technology company that provides transaction processing and other payment-related products and services.
9. HCA Healthcare Inc. (NYSE:HCA)
Forward P/E Ratio as of June 25: 14.9
Number of Hedge Fund Holders: 74
HCA Healthcare Inc. (NYSE:HCA) is one of the undervalued S&P 500 stocks to buy according to hedge funds. On June 26, HCA Healthcare announced that its HCA Healthcare Foundation, through its Healthier Tomorrow Fund, will provide a new $1 million grant to Educate Texas, which is an initiative of Communities Foundation of Texas. HCA Healthcare Foundation promotes health and well-being across all the communities HCA Healthcare serves
The latest donation expands upon a previous $1.35 million grant made by the Foundation to Educate Texas in 2022. The funding aims to increase student access to programs that prepare them for careers in healthcare, specifically focusing on high schools in Texas that offer Pathways in Technology Early College High School (P-TECH) healthcare career tracks. The initial 2022 grant supported the expansion of healthcare career pathways across P-TECH campuses, growing from 20 to 104 schools and enrolling ~10,000 high school students in these specialized programs.
The new $1 million grant will enable Educate Texas to further enhance the quality of program implementation. The initiative seeks to increase the number of students earning healthcare degrees and credentials and foster greater engagement of hospital employers, including HCA Healthcare-affiliated hospitals, with school districts in North Texas, Austin, San Antonio, and the Houston Gulf Coast region.
HCA Healthcare Inc. (NYSE:HCA) owns and operates hospitals and related healthcare entities in the US.
8. Gilead Sciences Inc. (NASDAQ:GILD)
Forward P/E Ratio as of June 25: 13.39
Number of Hedge Fund Holders: 79
Gilead Sciences Inc. (NASDAQ:GILD) is one of the undervalued S&P 500 stocks to buy according to hedge funds. On June 25, Gilead Sciences expanded its oncology pipeline through an exclusive agreement with Kymera Therapeutics Inc. (NASDAQ:KYMR). This deal is potentially valued at up to $750 million and focuses on advancing Kymera’s innovative molecular glue degrader/MGD program targeting cyclin-dependent kinase 2/CDK2.
Gilead will make an upfront payment of up to $85 million, with additional payments contingent on future development milestones and product sales, plus tiered royalties on net product sales. Kymera’s MGDs are designed to selectively eliminate CDK2, which is a protein crucial for cell division that often drives uncontrolled growth in various cancers, such as breast cancer and other solid tumors.
Unlike traditional CDK2 inhibitors that merely block protein activity, MGDs aim to remove the protein entirely. Kymera will lead all research activities for the CDK2 program. If Gilead exercises its option, it will gain worldwide rights to develop, manufacture, and commercialize all resulting products. This move for Gilead follows closely on the heels of the US FDA approval of Yeztugo (lenacapavir) for HIV prevention.
Gilead Sciences Inc. (NASDAQ:GILD) is a biopharmaceutical company that discovers, develops, and commercializes medicines in the areas of unmet medical needs. Kymera Therapeutics Inc. (NASDAQ:KYMR) is a clinical-stage biopharmaceutical company that discovers and develops small-molecule therapeutics.
7. General Motors Company (NYSE:GM)
Forward P/E Ratio as of June 25: 5.25
Number of Hedge Fund Holders: 79
General Motors Company (NYSE:GM) is one of the undervalued S&P 500 stocks to buy according to hedge funds. On June 26, it was publicly announced by the US National Highway Traffic Safety Administration/NHTSA that General Motors/GM is recalling 62,468 vehicles due to a fire risk originating from a faulty brake pressure sensor assembly. This recall affects certain Chevrolet Silverado 4500 HD, 5500 HD, and 6500 HD models from the 2019-2024 model years.
The defect comes from an unauthorized chemical used by the brake assembly supplier, which causes a part to degrade over time. The degradation can lead to brake fluid leaking into the brake pressure switch, resulting in an electrical short circuit. This can generate excessive heat and potentially cause an under-hood fire, even when the vehicle is turned off or unattended. GM notified the NHTSA about this issue in a memo on June 25.
Approximately 1% of the recalled vehicles are expected to have this specific defect. The affected vehicles include various model years and configurations of the Chevrolet Silverado HD series. Vehicles from before the 2019 model year are not affected due to a different design, nor are 2024 model year vehicles produced with a brake switch wire harness that includes a silicone sealant. GM informed its dealers about the recall on June 12. Owners of the affected vehicles will be notified via mail by July 28.
General Motors Company (NYSE:GM) designs, builds, and sells trucks, crossovers, cars, and automobile parts worldwide.
6. Comcast Corporation (NASDAQ:CMCSA)
Forward P/E Ratio as of June 25: 8.14
Number of Hedge Fund Holders: 81
Comcast Corporation (NASDAQ:CMCSA) is one of the undervalued S&P 500 stocks to buy according to hedge funds. On June 24, Comcast announced the completion of its network expansion into Paola and Hillsdale, Kansas, connecting over 4,000 new homes and businesses to its high-speed, symmetrical internet services. This marks the first time that residents and businesses in these areas have access to Xfinity and Comcast Business services, which include internet, mobile, entertainment, and security.
Comcast has invested more than $38 million in technology and infrastructure in Kansas over the past 3 years. The company celebrated the expansion with a ribbon-cutting ceremony at Paola’s Town Square, which is the same location where the project’s groundbreaking was initially celebrated. During the event, Comcast demonstrated its commitment to the community by donating $2,500 to My Father’s House, which is a local non-profit organization that assists and empowers the underserved rural population.
Comcast now serves 64 million homes and businesses nationwide and offers multi-gigabit internet speeds, 99.9% reliability, and built-in security features. The company is also committed to increasing economic mobility within the community. This includes the Internet Essentials program, which provides eligible households with low-cost and high-speed internet and affordable computers.
Comcast Corporation (NASDAQ:CMCSA) is a media and technology company worldwide.
5. Chevron Corporation (NYSE:CVX)
Forward P/E Ratio as of June 25: 16.31
Number of Hedge Fund Holders: 81
Chevron Corporation (NYSE:CVX) is one of the undervalued S&P 500 stocks to buy according to hedge funds. On June 25, Energy Transfer (NYSE:ET) announced that its subsidiary, Energy Transfer LNG Export, has signed an incremental 20-year Sale and Purchase Agreement/SPA with Chevron USA Inc. (a subsidiary of Chevron Corporation) for an additional 1.0 million tonnes per annum/mtpa of liquefied natural gas/LNG from its proposed Lake Charles LNG export facility.
The new agreement increases Chevron’s total contracted volume from Energy Transfer LNG to 3.0 mtpa, which builds upon an initial 2.0 mtpa agreement signed in December 2024. Under the terms of both SPAs, the LNG will be supplied to Chevron on a free-on-board basis. The purchase price will comprise a fixed liquefaction charge and a gas supply component indexed to the Henry Hub benchmark.
Energy Transfer LNG’s obligations under the SPA are contingent upon the company making a positive final investment decision for the Lake Charles facility. The latest SPA with Chevron helps Energy Transfer in securing long-term LNG commitments for the Lake Charles LNG project. Other recent agreements include a Heads of Agreement with MidOcean Energy for ~5.0 mtpa and an SPA with Kyushu Electric Power Company for 1.0 mtpa.
Chevron Corporation (NYSE:CVX) engages in integrated energy and chemicals operations in the US and internationally. Energy Transfer (NYSE:ET) provides energy-related services in the US.
4. AbbVie Inc. (NYSE:ABBV)
Forward P/E Ratio as of June 25: 15.27
Number of Hedge Fund Holders: 86
AbbVie Inc. (NYSE:ABBV) is one of the undervalued S&P 500 stocks to buy according to hedge funds. On June 25, the “Elahere Market Opportunities and Strategies to 2034” report was added to ResearchAndMarkets.com’s offering. It stated that the global market for Elahere, which is a treatment primarily for ovarian cancer, is anticipated to experience rapid growth and is projected to surge from nearly $502.56 million in 2024 to $6.07 billion by 2034 at a CAGR of 28.68% from 2029.
AbbVie, through its acquisition of ImmunoGen, is currently the sole and dominant player in the Elahere market, holding a 100% market share in 2023. AbbVie completed its acquisition of ImmunoGen on February 12 in 2024, in a deal that was valued at ~$10.1 billion. The acquisition was made to support AbbVie’s oncology pipeline, particularly with Elahere.
Elahere is indicated for ovarian neoplasms, which constituted the largest segment by clinical indication and accounted for 85.44% or $429.38 million of the market in 2024. This segment is expected to remain the fastest-growing with a CAGR of 29.67% during the 2024-2029 period. North America was the largest regional market for Elahere in 2024, and accounted for 97.09% of the total, or $487.92 million.
AbbVie Inc. (NYSE:ABBV) is a research-based biopharmaceutical company that researches, develops, manufactures, commercializes, and sells medicines and therapies worldwide.
3. PayPal Holdings Inc. (NASDAQ:PYPL)
Forward P/E Ratio as of June 25: 14.75
Number of Hedge Fund Holders: 92
PayPal Holdings Inc. (NASDAQ:PYPL) is one of the undervalued S&P 500 stocks to buy according to hedge funds. On June 26, PayPal announced multi-year partnerships with the Big Ten and Big 12 Conferences to revolutionize the distribution of institutional payments from universities directly to student-athletes under a new revenue-sharing model.
The initiative allows athletic departments to securely and efficiently disburse funds through PayPal. The Big 12’s agreement with PayPal is valued at ~$100 million over 5 years, which amounts to ~$1 million per school annually. The collaboration follows a recent court decision permitting colleges and universities to share revenue directly with student-athletes.
The first phase of the rollout is expected to begin in the summer of 2025, with student-athletes starting to receive these institutional payments via PayPal as early as July 1. PayPal is also set to become a preferred payment partner for tuition payments at select schools and offer students and parents a convenient and flexible payment option starting in early 2026.
PayPal Holdings Inc. (NASDAQ:PYPL) is a technology platform that enables digital payments for merchants and consumers worldwide.
2. Citigroup Inc. (NYSE:C)
Forward P/E Ratio as of June 25: 11.24
Number of Hedge Fund Holders: 96
Citigroup Inc. (NYSE:C) is one of the undervalued S&P 500 stocks to buy according to hedge funds. On June 25, Citi announced the results of its fifth annual CitiFX Vendor Review, which is a comprehensive analysis of the foreign exchange/FX landscape based on internal vendor evaluations and an annual client survey.
The review emphasizes the need for FX vendors to innovate and prioritize market impact considerations to remain competitive. 94% of clients underscored the importance of vendor adherence to the FX Global Code, while 85% stressed that vendors must consider market impact when developing execution tools. Client feedback indicates a high level of satisfaction with primary FX vendors, with 90% of respondents expressing contentment.
However, 85% of these satisfied clients also have enhancement requests, primarily for execution and workflow solutions designed to mitigate operational and settlement risks. The increasing demand for innovative FX solutions has led to a notable decline in vendor switching. The rate of clients changing FX vendors has dropped from 51% in 2021 to 22% in 2025.
Citigroup Inc. (NYSE:C) is a diversified financial services holding company that provides various financial products and services to consumers, corporations, governments, and institutions.
1. Pfizer Inc. (NYSE:PFE)
Forward P/E Ratio as of June 25: 8.31
Number of Hedge Fund Holders: 99
Pfizer Inc. (NYSE:PFE) is one of the undervalued S&P 500 stocks to buy according to hedge funds. On June 26, Pfizer announced positive topline results from its Phase 3 BASIS study evaluating HYMPAVZI (marstacimab) for individuals aged 12 to <75 years living with hemophilia A or B with inhibitors. The study met its primary and key secondary bleeding endpoints and showed the superiority of once-weekly subcutaneous HYMPAVZI in reducing bleeding outcomes compared to on-demand treatment.
Hemophilia is a group of rare genetic blood disorders that affects over 800,000 people globally and is caused by a deficiency in clotting factors (Factor VIII for hemophilia A, Factor IX for hemophilia B). About 20% of individuals with hemophilia A and 3% with hemophilia B develop inhibitors, which are antibodies that neutralize traditional factor replacement therapies, rendering them ineffective.
HYMPAVZI, discovered by Pfizer scientists, offers a differentiated mechanism of action. Instead of replacing missing clotting factors, it targets tissue factor pathway inhibitor/TFPI, a natural inhibitor of blood clotting initiation. HYMPAVZI has already received regulatory approvals in the US and Europe for eligible patients with hemophilia A without Factor VIII inhibitors or hemophilia B without Factor IX inhibitors. It was the first anti-TFPI approved for hemophilia A or B and the first hemophilia medicine in these regions to be administered via a pre-filled, auto-injector pen.
Pfizer Inc. (NYSE:PFE) discovers, develops, manufactures, markets, distributes, and sells biopharmaceutical products in the US and internationally.
While we acknowledge the potential of PFE 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 PFE 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.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
