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.
10 stocks receiving a massive vote of approval from Wall Street analysts
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.
8. Genmab A/S (NASDAQ:GMAB)
Number of Hedge Fund Holdings: 20
Genmab A/S (NASDAQ:GMAB), a Danish biotech company founded in 1999, specializes in antibody-based therapies for cancer and serious diseases. Known for its technologies like HuMab-Mouse and UniBody, the corporation has historically partnered with major pharmaceutical companies such as Johnson & Johnson and AbbVie to bring its innovations to market. However, the company is now undergoing a strategic transformation to become a fully integrated global commercial entity.
In June 2025, Genmab A/S (NASDAQ:GMAB) opened a major new U.S. site in Plainsboro, New Jersey, signaling a shift from a partnership-driven model to direct commercialization of its therapies. This move gives the company greater control over its innovation, regulatory processes, and patient outreach, aligning with a broader biotech industry trend toward independence and vertical integration.
The business’s oncology portfolio continues to gain traction. Tivdak (cervical cancer) received full FDA approval in April 2024, while Epkinly (lymphoma), which earned accelerated approval in 2023, has shown strong sales growth in the U.S. Genmab A/S (NASDAQ:GMAB)’s pipeline also remains active, with ongoing development of therapies like Epcoritamab and Acasunlimab. At the June 2025 ASCO meeting, the company presented promising Rina-S data, supporting an upcoming Phase III trial.
The corporation continues to benefit from its successful collaboration with Johnson & Johnson on DARZALEX, which remains a significant revenue driver. The company is also focused on long-term growth by investing in talent retention through stock-based incentives.
7. Stellantis N.V. (NYSE:STLA)
Number of Hedge Fund Holdings: 27
Stellantis N.V. (NYSE:STLA), one of the world’s largest automakers, is undergoing a strategic transformation by shifting its focus from hydrogen fuel cell technology to electric and hybrid vehicles. In July 2025, the company announced it would discontinue its hydrogen program due to high costs, limited infrastructure, and weak market demand. This decision includes halting the production of hydrogen-powered vans in France and Poland, with R&D resources redirected toward electrification projects. Notably, no job losses will result from this transition.
Instead, Stellantis N.V. (NYSE:STLA) is doubling down on battery innovation, particularly in solid-state batteries through its partnership with Factorial Energy. The company is also expanding connected services and rolling out its new STLA AutoDrive 1.0, an in-house-developed SAE Level 3 autonomous driving system, highlighting its broader commitment to next-generation mobility.
This shift comes amid financial challenges, including a major loss in the first half of 2025, largely due to U.S. tariffs and production disruptions. However, for investors seeking cheap stocks to buy with long-term potential, Stellantis’ aggressive EV pivot and restructuring under new CEO Antonio Filosa could present a compelling opportunity. The company is prioritizing growth in EVs and hybrids, aligning with broader industry trends that increasingly favor electric technologies over hydrogen.
6. Cal-Maine Foods, Inc. (NASDAQ:CALM)
Number of Hedge Fund Holdings: 33
Cal-Maine Foods, Inc. (NASDAQ:CALM), the largest U.S. producer and distributor of fresh shell eggs, offers a wide range of products, including conventional, cage-free, organic, and specialty eggs. Headquartered in Ridgeland, Mississippi, the company distributes its products nationwide and is now expanding beyond shell eggs to meet changing consumer preferences.
A key development is Cal-Maine Foods, Inc. (NASDAQ:CALM)’s recent $258 million acquisition of Echo Lake Foods, a producer of ready-to-eat egg-based breakfast items. This strategic move enables the business to diversify into value-added products like hard-cooked and shelf-stable eggs, strengthening its presence in the food service and retail sectors. With Echo Lake generating $240 million in annual sales and achieving 10% compound annual growth, the acquisition aligns with growing demand for protein-rich, convenient breakfast options.
In addition to product diversification, Cal-Maine Foods, Inc. (NASDAQ:CALM) is advancing sustainability efforts by working to inventory and reduce greenhouse gas emissions. The corporation has also formed a dedicated biosecurity team to manage bird flu risks, reinforcing its commitment to food safety and supply chain resilience.
5. Qifu Technology, Inc. (NASDAQ:QFIN)
Number of Hedge Fund Holdings: 33
Qifu Technology, Inc. (NASDAQ:QFIN), a leading AI-powered Credit-Tech platform in China, is undergoing a major transformation. The company recently announced it will rebrand as Qfin Holdings, Inc., following shareholder approval in June 2025, marking a strategic shift alongside new leadership appointments and updated governance policies.
Recognized as a “Most Honored Company” in the 2025 Extel Asia Best Managed Teams rankings, the business has earned top accolades for its CEO, CFO, and investor relations team, reflecting its excellence in corporate transparency and execution.
Qifu Technology, Inc. (NASDAQ:QFIN) is doubling down on its “AI + Finance” strategy, with innovations aimed at revolutionizing digital lending and risk assessment. A major highlight is TRIDENT, its proprietary Multimodal Large Language Model (MLLM), designed to enhance fraud detection, streamline customer service, and optimize user experience using multimodal data.
The corporation is also expanding through embedded finance channels, with nearly half of the new users in Q1 2025 acquired via APIs. At the same time, it continues to scale its capital-light business model, providing more efficient and lower-risk loan facilitation. With ongoing investment in AI research and partnerships with academic institutions, Qifu Technology, Inc. (NASDAQ:QFIN) is cementing its position as a pioneer in China’s evolving fintech landscape.
4. Crocs, Inc. (NASDAQ:CROX)
Number of Hedge Fund Holdings: 36
Crocs, Inc. (NASDAQ:CROX), headquartered in Broomfield, Colorado, is a global leader in casual footwear, best known for its Classic Clog made with proprietary Croslite material. The company operates two major brands—Crocs and HEYDUDE, and distributes products across more than 80 countries through wholesale and direct-to-consumer channels.
In 2025, Crocs, Inc. (NASDAQ:CROX) is prioritizing sustainability and circularity as core to its business strategy. According to its 2024 Comfort Report, the company has integrated 25% bio-circular content into its Croslite material, reducing emissions per pair by 5% compared to 2023 and 10% since 2021. The business has also expanded its “Old Crocs. New Life.” take-back program to all 183 of its stores in the U.S., Canada, and Europe, supporting recycling and reuse efforts.
A notable product innovation includes the Keep It Going Classic Clog, made with 25% post-consumer recycled content, representing a move toward closed-loop product design. On the social front, the corporation’ STEP UP TO GREATNESS initiative now supports over 3 million young people through partnerships with organizations like UNICEF and Big Brothers Big Sisters.
Given its strong financials, sustainability-driven growth, and ongoing product innovation, Crocs, Inc. (NASDAQ:CROX) is increasingly being viewed by value investors as one of the cheap stocks to buy in the consumer discretionary sector. Through these efforts, the company is aligning its operations with its core pillars, Comfort for the Planet, Communities, and All People, cementing its role as a sustainability leader in the footwear industry. Further global expansion of these initiatives is expected in the coming year.
3. Lincoln National Corporation (NYSE:LNC)
Number of Hedge Fund Holdings: 42
Lincoln National Corporation (NYSE:LNC), a leading U.S. provider of insurance and retirement solutions, is advancing its strategy in 2025 through a major partnership with Bain Capital. In April, Bain Capital acquired a 9.9% stake in the business for $825 million, marking a significant move toward optimizing Lincoln National Corporation (NYSE:LNC)’s investment and growth strategies.
As part of the deal, Bain Capital will manage assets across private credit, structured assets, mortgage loans, and private equity for the corporation over 10 years. This collaboration supports the company’s goal of accessing high-quality private assets with attractive, risk-adjusted returns, enhancing its multi-manager platform, and driving growth in spread-based earnings.
To fund this partnership, Lincoln National Corporation (NYSE:LNC) will sell approximately 18.8 million shares at $44 each, a 25% premium over the prior 30-day average, offering the company greater financial flexibility to invest in innovation, reduce leverage, and pursue strategic goals.
CEO Ellen Cooper called the partnership a “pivotal milestone,” highlighting the alignment of values and long-term vision between the firms. This move also reflects a broader industry shift, as insurers increasingly turn to alternative asset classes to improve yield and manage risk in a challenging interest rate environment.
2. Fluor Corporation (NYSE:FLR)
Number of Hedge Fund Holdings: 51
Fluor Corporation (NYSE:FLR), a global leader in engineering, procurement, and construction (EPC) services, is expanding its role in the critical minerals sector, which is vital for high-tech manufacturing and national security. In July 2025, the company completed a Preliminary Economic Assessment (PEA) for Ramaco Resources’ Brook Mine, potentially the largest unconventional rare earth deposit in the U.S. The project is technically and commercially viable, projecting a 38% internal rate of return, with an expected steady-state EBITDA of $143 million by 2029 and annual revenue of $378 million.
Fluor Corporation (NYSE:FLR)’s involvement reflects a strategic shift toward supporting the domestic supply of critical minerals like gallium, scandium, and neodymium, essential for electronics, batteries, and defense technologies. This work aligns with national priorities to reduce dependence on foreign sources and bolster clean energy infrastructure. By leveraging its engineering expertise, the company is positioning itself at the forefront of critical mineral development, moving beyond traditional infrastructure projects to address emerging global demands.
1. Centene Corporation (NYSE:CNC)
Number of Hedge Fund Holdings: 64
Centene Corporation (NYSE:CNC) tops the list for being one of the cheap stocks to buy. It is a major U.S. managed care organization, serving over 1 in 15 Americans through government programs like Medicaid, Medicare, and ACA exchanges, with a focus on underinsured populations. In July 2025, the company withdrew its 2025 earnings guidance after uncovering challenges in the ACA Marketplace. New actuarial data from 22 of its 29 states showed slower-than-expected membership growth and higher morbidity, meaning enrollees are sicker and costlier than anticipated. As a result, the business revised its risk adjustment revenue down by $1.8 billion, which could impact earnings by $2.75 per share.
In response, Centene Corporation (NYSE:CNC) is re-evaluating its 2026 ACA pricing to reflect rising claims and morbidity trends, particularly in states with the largest member base. The company is also emphasizing its operational improvements, streamlining its business, divesting non-core assets, and strengthening its Medicaid and Medicare services.
This development echoes a broader industry trend, as competitors face similar volatility in the ACA exchanges. With enhanced federal subsidies set to expire in 2026, it will be a pivotal year, making pricing corrections and policy adaptations crucial. Centene Corporation (NYSE:CNC) remains focused on core government-backed offerings, investing in Medicare quality and expanding behavioral health, aiming for resilience amid uncertainty.
While we acknowledge the potential of CNC 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 CNC and that has 100x upside potential, check out our report about this cheapest AI stock.
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