In this article, we will discuss the 11 Best Undervalued Stocks to Invest in According to Reddit.
According to US Bank, the 2025 YTD results demonstrate broader industry participation. Unlike 2023 and 2024, when information technology and communication services stocks fueled most of the gains of the S&P 500, there are other sectors that are now among this year’s top performers. On the YTD basis, the index’s top 5 performing sectors include industrials, utilities, and financials. These sectors touched new all-time highs in July, August, and September, respectively, noted the US Bank.
What Lies Ahead for the US Market?
Merrill, A Bank of America Company, remains overweight on equities with a preference for the US compared to the rest of the world. As per the firm, the profit cycle is expected to be extended by tailwinds from fiscal stimulus and deregulation, all favourable for economic growth and risk assets. The productivity has been stronger than reported, and the environment is supportive of earnings growth and risk-asset prices. As per the firm, there needs to be a focus on large-cap equities, AI beneficiaries, and rate-sensitive sectors, which are expected to benefit due to the renewed Fed easing.
Amidst this outlook, let us now have a look at the 11 Best Undervalued Stocks to Invest in According to Reddit.
Our Methodology
To list the 11 Best Undervalued Stocks to Invest in According to Reddit, we checked the trending stocks on Reddit. After getting an extensive list, we chose the ones that trade at a forward P/E of less than ~15x. Next, we finally shortlisted the ones popular among hedge funds, as of Q2 2025. The stocks are arranged in ascending order of their hedge fund sentiments.
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).
11 Best Undervalued Stocks to Invest in According to Reddit
11. Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL)
Number of Hedge Fund Holders: 22
Forward P/E: ~13.1x
Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) is one of the Best Undervalued Stocks to Invest in According to Reddit. On September 18, Truist reduced the price target on the company’s stock to $58 from $62, while keeping a “Buy” rating. The firm noted Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL)’s Q4 2025 earnings miss, but also recommends buying, considering that the core drivers of the brand turnaround remain intact and that sales might start to recover from the rebranding backlash soon, with the resumption of the Fall Menu marketing.
As per the analyst, the initial FY 2026 guidance is far lower than anticipated, but also appears to include increased marketing and labor spend in a bid to help sales recovery. For FY 2026, Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) expects total revenue of between $3.35 billion – $3.45 billion, which assumes the comparable store traffic decline of 4% – 7%. It expects adjusted EBITDA of between $150 million – $190 million.
10. Antero Midstream Corporation (NYSE:AM)
Number of Hedge Fund Holders: 40
Forward P/E: ~12.5x
Antero Midstream Corporation (NYSE:AM) is one of the Best Undervalued Stocks to Invest in According to Reddit. On September 8, the company announced the pricing of an upsized private placement to eligible purchasers of $650 million in aggregate principal amount of 5.75% senior unsecured notes due 2033 at par. Antero Midstream Corporation (NYSE:AM) expects to receive net proceeds of approximately $642 million, after deducting the initial purchasers’ discounts and estimated expenses. Antero Midstream Corporation (NYSE:AM) plans to use the net proceeds from the offering, along with borrowings under the revolving credit facility, to redeem in full 5.75% senior notes due 2027 at a redemption price of 100% plus accrued but unpaid interest.
During Q2 2025, Antero Midstream Corporation (NYSE:AM) gathered 3.5 Bcf/d of production, reflecting 6% rise YoY and its new record. Furthermore, the growth coincides with strong demand improvement seen along the US Gulf Coast LNG facilities over the previous year. Moving forward, Antero Midstream Corporation (NYSE:AM) expects healthy demand growth from Gulf Coast LNG facilities and natural gas fired power demand due to the data center growth in Appalachia. Riverwater Partners, an investment management company, released its Q1 2025 investor letter. Here is what the fund said:
“During the quarter, we increased our exposure to the energy transition by adding Range Resources (RRC) and Antero Midstream Corporation (NYSE:AM) to our portfolio. Both companies play critical roles in energy and electrification. Electrification is expected to see significant demand growth in the coming years and decades.
Antero specializes in transporting, gathering and processing natural gas as well as operating water handling for its customers. It acts as a toll company with stable cash flows and sports a 5.6% dividend yield. We believe that Range and Antero are both attractively valued, boast experienced management teams, and benefit from significant competitive advantages.”
9. The Gap, Inc. (NYSE:GAP)
Number of Hedge Fund Holders: 44
Forward P/E: ~10.6x
The Gap, Inc. (NYSE:GAP) is one of the Best Undervalued Stocks to Invest in According to Reddit. On September 4, The Gap, Inc. (NYSE:GAP) announced its strategic expansion into beauty and accessories, reinforcing its commitment to becoming the high-performing house of iconic American brands. According to the company, the beauty and personal care market remains one of the fastest-growing and most resilient retail categories in the US. The Gap, Inc. (NYSE:GAP) expects a clear and meaningful opportunity to expand in this category, given its plans for the phased launch, starting with an initial test-and-learn expression at Old Navy later in the fall.
In 2026, The Gap, Inc. (NYSE:GAP) targets to seed to scale its Old Navy beauty business and launch brand-right expressions throughout the portfolio. In Q2 2025, the company overdelivered on profit expectations and achieved its topline goals. It saw net sales of $3.7 billion, with net income coming at $216 million and diluted EPS at $0.57. For FY 2025, The Gap, Inc. (NYSE:GAP) expects net sales growth of 1% – 2%.
8. Strategy Inc (NASDAQ:MSTR)
Number of Hedge Fund Holders: 45
Forward P/E: ~10.8x
Strategy Inc (NASDAQ:MSTR) is one of the Best Undervalued Stocks to Invest in According to Reddit. On September 15, TD Cowen reduced the price target on the company’s stock to $620 from $640, while keeping a “Buy” rating, as reported by The Fly. The firm opines that the shares’ current ~50% premium to bitcoin holdings undervalues the expected BTC Yield, not to mention the embedded operating leverage. Elsewhere, in Q2 2025 and into July, Strategy Inc (NASDAQ:MSTR) saw strong execution and growth. It expanded its bitcoin holdings to 628,791 bitcoins, garnered more than $10 billion through its ATM programs and IPOs, and witnessed increased institutional and retail demand for the securities.
Strategy Inc (NASDAQ:MSTR)’s overall capital raising activities led to its Bitcoin per Share (BPS) rising by 25% YTD, and, therefore, it raised its full-year BTC Yield and BTC $ Gain KPI targets to 30% and $20 billion, respectively. Such achievements showcase the scale of its Bitcoin treasury strategy and the strength of its capital markets platform. Strategy Inc (NASDAQ:MSTR) received aggregate net proceeds of ~$6.8 billion during the 3 months ended June 30, 2025, and further aggregate net proceeds of ~$3.7 billion between July 1, 2025, and July 29, 2025.
Greenlight Capital, an investment management firm, released its Q4 2024 investor letter. Here is what the fund said:
“There is an open debate as to whether Bitcoin will at some point enter the mainstream as an official currency. In fact, there is a bill before Congress for the U.S. to establish a “Strategic Bitcoin Reserve” and buy one million Bitcoins over five years. The bill’s purpose appears to be the use of public funds to ramp up the price of Bitcoin, thereby enhancing the wealth of existing Bitcoin holders. This seems a dubious use of taxpayer funds, but the new administration has a lot of Bitcoin-owning supporters, so it might happen. More likely, cooler heads will decide that the government should not borrow another trillion dollars in the bond market to speculate in Bitcoin and that there is, in fact, nothing strategic about doing so.
One of the biggest owners of Bitcoin is MicroStrategy Incorporated (NASDAQ:MSTR). While MSTR owns a small software business, its principal pursuit is buying Bitcoin. In practice, MSTR is an investment company that buys and holds Bitcoin.2 MSTR trades at a large premium to the value of the underlying Bitcoin it holds. The idea is to raise money from new investors at a premium and use the proceeds to buy more Bitcoin. Since the Bitcoin that MSTR buys costs less than the Bitcoin-implied value of MSTR’s stock, the new investment is dilutive to new investors but accretive to existing investors. MSTR’s promoters have labeled the return to existing investors created by this scheme the “Bitcoin yield”. As Bitcoin itself yields nothing, the Bitcoin yield is simply a measure of the Ponzi finance’s effectiveness. Lately, it has been pretty effective.”
7. The Chemours Company (NYSE:CC)
Number of Hedge Fund Holders: 48
Forward P/E: ~7.7x
The Chemours Company (NYSE:CC) is one of the Best Undervalued Stocks to Invest in According to Reddit. On September 16, Truist lifted the price target on the company’s stock to $21 from $18, while keeping a “Buy” rating as part of the broader research note on the Chemicals stocks, as reported by The Fly. While The Chemours Company (NYSE:CC)’s shares have outperformed sector peers and the broader S&P over the previous month, the firm expects further upside as it opines that the TiO2 industry continues to demonstrate signs of incremental pricing discipline and production curtailments. This, along with the continued implementations of anti-dumping duties targeting the Chinese exports, can contribute to meaningful earnings growth, added the firm’s analyst.
In Q2 2025, The Chemours Company (NYSE:CC)’s net sales came in at $1.6 billion, reflecting a rise of 4% compared to the corresponding prior-year quarter. The rise was mainly because of the 3% rise in volume and a 1% rise in price. Overall, The Chemours Company (NYSE:CC)’s results exceeded its expectations for the quarter, amidst improvement in performance throughout each of its 3 businesses, aided by the strong demand for Opteon™, volume growth in TT, and favorable pricing in APM.
6. Permian Resources Corporation (NYSE:PR)
Number of Hedge Fund Holders: 49
Forward P/E: ~11.5x
Permian Resources Corporation (NYSE:PR) is one of the Best Undervalued Stocks to Invest in According to Reddit. On September 19, Scotiabank analyst Paul Cheng began coverage of the company’s stock with an “Outperform” rating and a price objective of $21. As per the analyst, the company is positioned for greater FCF growth and has a deeper inventory compared to its peers. Also, it sees Permian Resources Corporation (NYSE:PR)’s valuation as attractive at the current share levels.
Permian Resources Corporation (NYSE:PR) believes that it continues to improve upon its low-cost leadership and high-quality asset base, making it well-placed to maximize shareholder returns in any commodity price environment. During Q2 2025, Permian Resources Corporation (NYSE:PR) executed on ~$600 million in acquisitions. Furthermore, the company’s strong balance sheet and maximum liquidity will enable it to continue to play offense in the future if further volatility or macro uncertainty occurs. Permian Resources Corporation (NYSE:PR) increased its 2025 oil production target by 6.0 MBbls/d to 178.5 MBbls/d and also raised its total production target by 15.0 MBoe/d to 385.0 MBoe/d, each based on midpoint of guidance.
Artisan Partners, an investment management company, released its Q1 2025 investor letter. Here is what the fund said:
“We made one new purchase this quarter, adding Permian Resources Corporation (NYSE:PR), an independent oil and gas company. PR is focused solely on the Delaware Basin of West Texas and southwestern New Mexico—the most prolific oil-producing region in the US. The founders and co CEOs, who also have large ownership interests in the business, have sought to build a business that can produce substantial free cash flow, return capital to shareholders and generate attractive equity returns across varied commodities price environments. To achieve these goals, PR has pursued best-in-class operations and responsible capital stewardship by thoughtfully acquiring assets it believes are undervalued and divesting acreage it believes would be better in someone else’s hands, while meaningfully returning capital to shareholders in the form of dividends. We always seek to align ourselves with shareholder-oriented management teams, but this is even more critical when investing in mid-sized energy companies given their dependence on the underlying commodity prices and minimal diversification by business and geography as well as the sector’s general predilection for reinvesting capital for growth rather than returns. Shares were rangebound for much of 2024 as macro fears have weighed on oil prices and energy sector stocks, giving us an opportunity to purchase a strong operator at a favorable price.”
5. United Parcel Service, Inc. (NYSE:UPS)
Number of Hedge Fund Holders: 53
Forward P/E: ~11.2x
United Parcel Service, Inc. (NYSE:UPS) is one of the Best Undervalued Stocks to Invest in According to Reddit. On September 18, BMO Capital Markets reduced the rating on the company’s stock to “Hold” from “Buy”, decreasing the price objective to $96 from $125. The analyst doesn’t see a demand recovery in United Parcel Service, Inc. (NYSE:UPS)’s business-to-business segment. This situation can be exacerbated if the broader US economy continues to cool or sees a recession.
The company’s Q2 2025 results demonstrate both the complexity of the landscape and the strength of its execution. For FY 2025, United Parcel Service, Inc. (NYSE:UPS) expects capital expenditures of ~$3.5 billion, and $3.5 billion in expected expense reductions because of its network reconfiguration and Efficiency Reimagined initiatives. United Parcel Service, Inc. (NYSE:UPS) continues to make progress on its strategic initiatives, and it remains confident that the actions are positioning it for stronger long-term financial performance and enhanced competitive advantage.
River Road Asset Management, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“As of December 31, the portfolio held 29 positions, up four positions from Q3. During Q4, the largest sector increase was 736 bps within industrials, while the largest decrease was -276 bps within consumer discretionary. We established five new positions and eliminated one position
We also initiated a position in United Parcel Service, Inc. (NYSE:UPS) (Cl B) (UPS, 3.0 conviction), the world’s largest package delivery company, which handles over six billion packages annually and can reach 90% of the world’s gross domestic product (GDP) within a day. After years of elevated network investments to expand capacity, UPS has refocused its strategy on growing return on invested capital (ROIC). We believe the stock will rerate higher as margins, which we believe have bottomed, are expected to expand with the price per package growing faster than the cost per package. In the interim, investors collect a 5% dividend, which has grown in 21 out of 24 years since UPS went public. The dividend is supported by healthy free cash flow and an investment grade balance sheet with ~1x net leverage.”
4. lululemon athletica inc. (NASDAQ:LULU)
Number of Hedge Fund Holders: 55
Forward P/E: ~13.2x
lululemon athletica inc. (NASDAQ:LULU) is one of the Best Undervalued Stocks to Invest in According to Reddit. On September 11, HSBC downgraded the company’s stock to “Hold” from “Buy” with a price objective of $175, down from the prior target of $275. As per the firm, lululemon athletica inc. (NASDAQ:LULU) has an uphill battle when it comes to turning around the U.S. business. The company provided a grim FY 2025 outlook because of its ongoing corrective measures, tariff impacts, and the end of De minimis exemption, opines the firm analyst.
In Q2 2025, lululemon athletica inc. (NASDAQ:LULU) surpassed expectations on the EPS, while revenue fell short of its guidance, mainly due to its US business. However, lululemon athletica inc. (NASDAQ:LULU)’s brand and balance sheet remain strong, and it plans to exercise financial discipline and strategically invest in the growth potential. For Q3 2025, it anticipates net revenue of between $2.470 billion – $2.500 billion, reflecting growth of 3% – 4%. Its diluted EPS is expected to be between $2.18 – $2.23 for the quarter.
RGA Investment Advisors, an investment management company, released its Q1 2025 investor letter. Here is what the fund said:
“Late in the quarter, we purchased shares in Lululemon athletica inc. (NASDAQ:LULU), despite uncertainty about the tariff situation. Many of you are familiar with the brand. Lulu is a leading athleisure brand and though competition has increased from upstart offerings like Vuori, Alo and Fabletics, the company has continued to maintain relevance and perform admirably. These upstarts have varied approaches, but in aggregate, they have won share with a combination of faster, more tasteful fashion and cheaper prices. Importantly, this share has predominantly come from Nike–the 10,000 pound gorilla of the industry that continues to see negative topline growth. Even within the competitive landscape, it is notable that Vuori and Alo enthusiasts still consider Lulu core to their wardrobe, given the demonstrable quality advantage of the company’s proprietary fabrics. Although Lulu has benefited from dominance in fashion, its core calling has been performance and that segment of the market remains unquestioned.
For Lulu, U.S. Women’s in particular has slowed, though the company continues to drive growth in the men’s market, while expanding geographically to China and Europe. The slowdown in women’s seems tied both to broader weakness in apparel, particularly athleisure, and to rising competitive pressure – factors that have contributed to investor caution.. Meanwhile, China alone holds the potential to double the scale of Lulu’s business should the company attain a similar degree of resonance as Nike. We are not expecting this to be the case, though it is a notable source of potential upside…” (Click here to read the full text)
3. The Allstate Corporation (NYSE:ALL)
Number of Hedge Fund Holders: 62
Forward P/E: ~8.9x
The Allstate Corporation (NYSE:ALL) is one of the Best Undervalued Stocks to Invest in According to Reddit. On September 18, the company announced estimated catastrophe losses for August of $213 million or $168 million, after-tax. The catastrophe losses for the month included 10 events with ~70% of the losses associated with three wind and hail events. The total catastrophe losses for July and August came in at $397 million or $313 million, after-tax.
Elsewhere, The Allstate Corporation (NYSE:ALL) had a healthy operating and financial performance in Q2 2025 while executing its growth strategies. Apart from the strong financial results, The Allstate Corporation (NYSE:ALL) is creating shareholder value by increasing growth and proactively managing investments and capital. Notably, total policies in force rose to 208 million, 4% higher compared to the last year, led by Protection Plans. Notably, the personal property-liability policies have started to grow because of expanded distribution, new products, and increased marketing. The $77.4 billion investment portfolio was able to garner $754 million of income in Q2 2025, while lowering the overall portfolio risk.
TimesSquare Capital Management, an equity investment management company, released its Q1 2025 investor letter. Here is what the fund said:
“In the Financials sector we tend to avoid banks that face credit deterioration or rising deposit costs, preferring either asset managers, specialized insurance companies, or financial technology providers. On the plus side there was an 8% gain from The Allstate Corporation (NYSE:ALL), which provides personal property and casualty insurance, life insurance, as well as retirement and investment products. Revenues and earnings were higher than anticipated, propelled by underlying loss ratio beats across Homeowners and Auto insurance as well as lower than expected catastrophe losses. Notably, the company highlighted that it expects policies-in-force to grow in 2025. As its shares climbed, we trimmed our position.”
2. FedEx Corporation (NYSE:FDX)
Number of Hedge Fund Holders: 67
Forward P/E: ~12.6x
FedEx Corporation (NYSE:FDX) is one of the Best Undervalued Stocks to Invest in According to Reddit. On September 19, TD Cowen lifted the price target on the company’s stock to $271 from $269, while keeping a “Buy” rating, as reported by The Fly. As per the firm, the company beat expectations in Q1 2026 despite trade policy headwinds and the Freight miss. Notably, FedEx Corporation (NYSE:FDX)’s Q1 2026 earnings growth underscores the success of its strategic initiatives, as it flexes its network and reduces its cost-to-serve, while further enhancing the value proposition and customer experience.
FedEx Corporation (NYSE:FDX)’s consolidated operating results witnessed improvement, demonstrating strength in US domestic package revenue and continued structural cost reduction. Furthermore, the planned spin-off of FedEx Freight into the new publicly traded company has been advancing and is expected to be executed by June 2026. Effective January 5, 2026, FedEx parcel and FedEx Freight LTL shipping rates will be increased by an average of 5.9%. For FY 2026, FedEx Corporation (NYSE:FDX) forecasts 4% – 6% revenue growth rate YoY.
Longleaf Partners, managed by Southeastern Asset Management, released its Q2 2025 investor letter. Here is what the fund said:
“FedEx Corporation (NYSE:FDX) – Global logistics company FedEx was a detractor for the quarter. Despite macro headwinds like continued tariff threats and weak demand for higher value shipping, the company demonstrated resilience. The impending Express and Freight separation is expected to unlock value by providing greater flexibility and accountability, addressing the market’s undervaluation of Freight vs. peers and increasing capital discipline at Express. We were deeply saddened by the passing of Founder and Chairman Fred Smith. A legendary figure, he built FedEx into an industry giant through visionary leadership and brilliant strategic decisions. Beyond his immense business success, his quiet generosity and kindness, both globally and in our Memphis community, truly set him apart.”
1. Micron Technology, Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 94
Forward P/E: ~12.8x
Micron Technology, Inc. (NASDAQ:MU) is one of the Best Undervalued Stocks to Invest in According to Reddit. On September 18, Wedbush lifted the price target on the company’s stock to $200 from $165, while maintaining an “Outperform” rating. The firm’s new price target reflects a strong upside from the company’s current trading level. It demonstrates growing optimism about Micron Technology, Inc. (NASDAQ:MU)’s position in the memory market cycle. Notably, the firm calculated the higher target by applying a 10-times multiple to its FY 2027 EPS estimates.
Furthermore, the firm also noted the potential positive contribution from High Bandwidth Memory (HBM) products, demonstrating that there can be room for further upside over and above the current projections. Micron Technology, Inc. (NASDAQ:MU) updated its guidance for Q4 2025 revenue to $11.2 billion (± $100 million), non-GAAP gross margins to be 44.5% (± 0.5%), and non-GAAP EPS to $2.85 (± $0.07). The revised guidance showcases improved pricing, mainly in DRAM, and robust execution.
Parnassus Investments, an investment management firm that focuses on owning a concentrated portfolio of U.S. large-cap stocks, released its Q2 2025 investor letter. Here is what the fund said:
“Micron Technology Inc. (NASDAQ:MU) shares advanced due to the company’s strong position in the AI-driven memory market. Management noted robust demand in its latest quarter.”
While we acknowledge the potential of MU 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 MU and that has 100x upside potential, check out our report about this cheapest AI stock.
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