In this article, we will be taking a look at the 11 best undervalued stocks to invest in now.

David Kostin, the Chief US Equity Strategist at Goldman Sachs Research, stated that in addition to the improved interest rate outlook, the Q1 2025 earnings results were strong, which increased confidence that the largest stocks would continue to meet investor expectations for long-term growth for at least the next few quarters. This may contribute to the overall valuation of the broader market.

The stock market may be stimulated by Goldman Sachs Research’s forecast of lower 10-Y Treasury yields. According to their macro valuation model, a ~3% increase in the S&P future P/E corresponds to every 50 basis point decline in real bond yields, assuming all other factors remain constant. Additionally, the firm’s research team raised its estimate for the S&P 500 P/E from 20.4x to 22x.

Notably, the company believes that changes in trade policy create significant uncertainty in its profit projections. Kostin’s team maintained the EPS growth projection for S&P 500 equities at 7% for 2025 and 7% for the following year. According to Goldman Sachs, the possibility that the overall market will continue to rise, with the recent narrow rally spreading to the remainder of the index, is supported by the positive prognosis for profit growth in 2026, expectations that rate reduction will resume, and a neutral investor stance.

Amidst such trends, let’s take a look at the 11 best undervalued stocks to invest in now.

Our Methodology

We screened stocks using the following criteria: a price-to-earnings (P/E) ratio below 15, a market capitalization exceeding $5 billion, and hedge fund sentiment based on data from the Insider Monkey database, which tracks the holdings of over 1,000 hedge fund managers. The final list was ranked in ascending order based on the number of hedge funds holding 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).

Here is our list of the 11 best undervalued stocks to invest in now.

11. Korea Electric Power Corporation (NYSE:KEP)

Number of Hedge Fund Holdings: 9

Korea Electric Power Corporation (NYSE:KEP), South Korea’s largest electric utility, is advancing its role in sustainable energy with a groundbreaking project to develop the world’s first superconducting power grid for data centers. On July 10, 2025, KEP signed an MOU with LS Cable & System and LS Electric to initiate this innovative venture.

The superconducting grid will use cutting-edge technology to transmit large amounts of electricity with near-zero resistance, addressing the rising power demands of AI and data centers. By operating at low voltages and eliminating the need for new substations, the system promises reduced installation space, lower construction costs, and improved energy efficiency. Key components include superconducting cables and a fault current limiter, which enhances system stability by preventing power surges.

Korea Electric Power Corporation (NYSE:KEP) will oversee technical and regulatory aspects, while LS Cable & System and LS Electric will supply core infrastructure. The project is positioned to revolutionize urban power supply and expand into global markets. With its ambitious innovation efforts and a valuation that appeals to value investors, KEP is increasingly being viewed as one of the cheap stocks to buy for exposure to the future of sustainable energy infrastructure.

10. Companhia Energética de Minas Gerais – CEMIG (NYSE:CIG)

Number of Hedge Fund Holdings: 13

Companhia Energética de Minas Gerais – CEMIG (NYSE:CIG) is one of Brazil’s largest integrated energy utilities, playing a crucial role in the country’s power generation, transmission, and distribution. Recently, the company launched its most ambitious investment program to date, committing BRL 6.3 billion in 2025 toward modernizing its infrastructure and accelerating Brazil’s energy transition. These efforts include upgrading to smart meters, enhancing grid resilience, and adopting advanced systems like SAP S4/HANA and ADMS to improve efficiency and service reliability.

In line with global sustainability goals, Companhia Energética de Minas Gerais – CEMIG (NYSE:CIG) is expanding into renewable energy, with its first solar plants set to launch in July 2025. These investments also support the agribusiness sector, a key part of the company’s economy. As part of its operational overhaul, the business is restructuring with six new regional management units to improve local responsiveness and customer service.

A key highlight of Companhia Energética de Minas Gerais – CEMIG (NYSE:CIG)’s strategy is its push for digital transformation and smart grid integration. The deployment of digital tools and real-time management systems aims to future-proof its operations, accommodate growing renewable capacity, and provide more agile and transparent services across the energy value chain.

9. Grupo Financiero Galicia S.A. (NASDAQ:GGAL)

Number of Hedge Fund Holdings: 19

Grupo Financiero Galicia S.A. (NASDAQ:GGAL) is Argentina’s leading financial services holding company, offering a broad range of banking, insurance, investment, and digital solutions through its subsidiaries, including Banco Galicia, Naranja X, and Galicia Seguros. With over 110 years of experience, the company has built a strong presence across traditional and digital financial markets.

In June 2025, Grupo Financiero Galicia S.A. (NASDAQ:GGAL) announced a secondary offering of 11.7 million American Depositary Shares (ADS), sold by HSBC Bank plc. While this offering does not raise capital for the company itself, it boosts the company’s global visibility and liquidity. Additionally, a cash dividend of ARS 21.15 per share was approved and distributed in July 2025, reflecting shareholder confidence and financial strength.

Grupo Financiero Galicia S.A. (NASDAQ:GGAL) is strategically focused on digital transformation and innovation. Through platforms like Naranja X and Inviu, it is expanding digital banking and fintech services to meet the needs of tech-savvy consumers and small businesses. This approach supports product innovation, service efficiency, and resilience in Argentina’s changing economic environment. With a solid track record, growing fintech capabilities, and relatively low valuation compared to peers, GGAL is increasingly drawing attention from investors looking for cheap stocks to buy in emerging markets. By integrating digital payments, banking, insurance, and investment services, the business is positioning itself as a central force in Argentina’s evolving financial landscape.