In this article, we explore the 11 Best Very Cheap Stocks to Buy According to Hedge Funds.
US equity markets are hovering near record highs, with valuations stretched well above long-term norms. As of August 22, 2025, the S&P 500 closed at 6,467, marking a 28% rebound from its April low. The Dow Jones Industrial Average climbed past 45,700 for the first time, while the Nasdaq Composite ended at a record 21,713. Experts warn that this surge is fueled by exuberant pricing: the S&P 500’s forward P/E ratio recently touched 23.11, a five-month high, while Bank of America notes that its (S&P 500’s) price-to-book ratio has risen to 5.3, surpassing the 2000 dot-com bubble peak of 5.1.
Hedge funds have already swung into action, scaling back exposure to overvalued names in sectors such as tech and rotating into defensives. Still, some on Wall Street believe opportunities are there. In Goldman Sachs’ July 31, 2025, episode of The Markets, Anshul Sehgal, Global Co-Head of Fixed Income, Currency and Commodities, argued that “stocks are still very undervalued.” Sehgal pointed to “blockbuster” earnings and accelerating AI-driven capital spending as key supports.
This clash of signals sets the stage for hedge funds to fish for bargains. In this article, we surface 11 of the most undervalued US-listed stocks that hedge funds continue to favor.
Our Methodology
We used the Finviz stock screener to identify US-listed stocks with a forward P/E ratio under 15, as of August 27, 2025. Based on the results, we selected the 11 stocks that were the most widely held by elite hedge funds. Hedge fund sentiment was measured using Q2 2025 13F filings data from Insider Monkey’s database, which tracks the portfolios of more than 900 hedge funds. The final list is ranked in ascending order based on the number of hedge funds that reported stakes in each stock.
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).
Best Very Cheap Stocks to Buy According to Hedge Funds
11. Banco Bilbao Vizcaya Argentaria, S.A. (NYSE:BBVA)
Number of Hedge Fund Holders: 10
Forward P/E Ratio: 9.25
Banco Bilbao Vizcaya Argentaria, S.A. (NYSE:BBVA) is one of the best very cheap stocks to buy according to hedge funds. On August 22, the company’s Colombian branch granted a long-term credit facility to Grupo Energía Bogotá (GEB) for 500 billion Colombian pesos (COP) (about $125.2 million). The loan will finance key GEB projects, including large-scale energy transmission initiatives like “Chivor II Norte 230 kilovoltios,” “Sogamoso,” and “Colectora y segundo circuito.”
This transaction consolidates the bank’s role as a key financial partner in the development of infrastructure projects that contribute to the country’s energy transformation and progress. In 2023, BBVA Colombia granted 3.8 billion COP in sustainable lending. A total of 1.4 billion COP was allocated to climate action pursuits, and 873 billion COP went to government entities. BBVA Colombia and the International Finance Corporation (IFC) issued a “biodiversity bond” in 2024 to finance projects that address biodiversity loss. The bank also partnered with energy firm Isagen to convert long-term finance of 368 billion COP to sustainable loans linked to compliance with an environmental indicator.
Banco Bilbao Vizcaya Argentaria, S.A. (NYSE:BBVA) is a global financial services company. It provides retail banking, corporate banking, wealth management, and asset management services across Europe, Latin America, and the United States.
10. Toyota Motor Corporation (NYSE:TM)
Number of Hedge Fund Holders: 18
Forward P/E Ratio: 12.84
Toyota Motor Corporation (NYSE:TM) is one of the best very cheap stocks to buy according to hedge funds. On August 21, Toyota and Mazda Motor Corporation began field tests of an energy storage system that uses batteries from electrified vehicles. The companies jointly launched the field tests at Mazda’s Hiroshima Plant in Japan.
The test centers on Toyota’s Sweep Energy Storage System. This system integrates batteries from electrified vehicles, even those with varying capacities or degrees of degradation, to regulate electricity supply and demand.
This feature enables the system to utilize a range of battery types, chemistries, and states of health simultaneously without requiring new, expensive control units. The system can also reuse the original inverters from the donor vehicles.
Toyota Motor Corporation (NYSE:TM) is a Japanese multinational automotive manufacturer. It designs, manufactures, and sells passenger cars, trucks, buses, and hybrid and electric vehicles under the brands Toyota, Lexus, Daihatsu, and Hino. The company operates a global production and distribution network, maintaining a strong market share across Asia, Europe, and North America.
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