In this article, we will discuss the 11 Most Undervalued Long Term Stocks to Buy According to Hedge Funds.
BlackRock sees risk assets in a tug-of-war between strong US corporate earnings, driven by the AI theme, and tariffs that impact growth while increasing inflation. The second quarter earnings results demonstrate that the AI theme has been winning, while the concerns regarding who will pay for tariffs remain. Early indications reveal a mix of consumers and companies. The investment firm believes that the US corporate strength might cushion the blow, while it remains overweight on the AI theme and US stocks.
Current Trends in US Equities
As per the US Bank, this year’s rapidly changing market sentiment followed the Trump administration’s trade policies. Bill Merz, head of capital markets research at U.S. Bank Asset Management Group, opines that, since April, the markets have moved past the idea that tariffs will result in a detrimental impact on growth, earnings, and inflation. Amidst the shifting tariff policy overhang, investors have been focusing on generally healthy economic fundamentals. The stable labor market, modest inflation, as well as constructive corporate earnings growth, continue to support this stance, noted the US Bank.
Amidst these trends, we will now have a look at the 11 Most Undervalued Long Term Stocks to Buy According to Hedge Funds.
An investor in a suit representing the company, seated in front of a long table of global leaders discussing the company’s investments.
Our Methodology
To list the 11 Most Undervalued Long Term Stocks to Buy According to Hedge Funds, we used a screener and sifted through several online rankings. After getting an extensive list, we narrowed it down by shortlisting the stocks that trade at a forward P/E of less than ~15x, and that have a 5-year revenue growth of at least ~10%. Finally, we selected the ones popular among hedge funds. We also mentioned hedge fund sentiments around each stock, as of Q1 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).
All the data is as of August 5
11 Most Undervalued Long Term Stocks to Buy According to Hedge Funds
11. Chubb Limited (NYSE:CB)
Forward P/E: ~12.3x
5-year Revenue Growth: ~10.7%
Number of Hedge Fund Holders: 55
Chubb Limited (NYSE:CB) is one of the Most Undervalued Long Term Stocks to Buy According to Hedge Funds. On August 1, HSBC downgraded the company’s stock to “Hold” from “Buy” with a price objective of $300, down from the prior target of $317, as reported by The Fly. The firm sees pricing pressure in Chubb Limited (NYSE:CB)’s commercial property, keeping investor interest subdued. Furthermore, the downward momentum in pricing can make cycle management more difficult, noted the firm’s analyst.
Chubb Limited (NYSE:CB) reported net income for Q2 2025 of $2.97 billion, or $7.35 per share, and core operating income of $2.48 billion, or $6.14 per share. Book value per share and tangible book value per share rose 6.1% and 8.0%, respectively, from March 31, 2025, and now stand at $174.07 and $112.64. Notably, book value was favorably affected by the after-tax net realized and unrealized gains of $1.54 billion in Chubb Limited (NYSE:CB)’s investment portfolio and $700 million of foreign currency gains.
Chubb Limited (NYSE:CB) produced $2.5 billion in core operating income, reflecting a rise of ~13% from a year ago, with operating EPS rising 14%, thanks to the record underwriting and healthy investment income, and double-digit growth in life income.
10. Newmont Corporation (NYSE:NEM)
Forward P/E: ~14x
5-year Revenue Growth: ~14.1%
Number of Hedge Fund Holders: 65
Newmont Corporation (NYSE:NEM) is one of the Most Undervalued Long Term Stocks to Buy According to Hedge Funds. On August 1, Canaccord lifted the price target on the company’s stock to $86 from $85, while keeping a “Buy” rating, as reported by The Fly. The firm updated the model after strong Q2 2025 results, delivering another quarter of healthy production and cost performance with record FCF and AISC margin. Newmont Corporation (NYSE:NEM) produced ~1.5 million attributable gold ounces and generated quarterly FCF of $1.7 billion, underscoring the strength of its portfolio and the disciplined execution of its commitments.
Newmont Corporation (NYSE:NEM)’s FCF rose 42% from the prior quarter, mainly because of an increase in consolidated net cash from operating activities compounded by lower capital investment.
Newmont Corporation (NYSE:NEM) expects to receive over $3.0 billion in after-tax cash proceeds from the divestiture program this year, which includes ~$2.5 billion from divested assets and ~$470 million from the sale of equity shares in Greatland Resources and Discovery Silver. The company maintained a healthy and flexible investment-grade balance sheet, closing the quarter with $6.2 billion in cash and $10.2 billion in total liquidity.
ClearBridge Investments, an investment management company, released its Q2 2025 investor letter. Here is what the fund said:
“Our largest new position during the quarter was Newmont Corporation (NYSE:NEM), a gold and precious metals miner. In addition to adding a level of insulation against further deterioration of the U.S. federal debt situation, as gold prices would likely rally, Newmont’s ability to generate free cash flows has tracked gold prices higher — a fundamental tailwind that has not yet been captured at its current valuation. Newmont has also initiated a strategic plan to return capital to shareholders and pay down its debt.”
9. Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)
Forward P/E: ~14.5x
5-year Revenue Growth: ~13.9%
Number of Hedge Fund Holders: 66
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) is one of the Most Undervalued Long Term Stocks to Buy According to Hedge Funds. On August 4, BMO Capital lifted the price target on the company’s stock to $640 from $600, while keeping an “Outperform” rating, as reported by The Fly. As per the analyst, Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)’s healthy Q2 2025 print reflects a step of progress in the longer journey to regain the competitive positioning of its EYLEA franchise, even though clinical and regulatory missteps have been weighing on the shares.
According to the firm, Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)’s core emphasis for H2 2025 remains commercial execution and clearance of regulatory hurdles with approval of key EYLEA HD label expansions. Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) saw a healthy Q2 2025, characterized by strong growth in US sales of EYLEA HD and global sales of Dupixent and Libtayo, together with multiple regulatory approvals. Notably, in June 2025, the FDA approved Dupixent for treating adults with bullous pemphigoid.
Longleaf Partners, managed by Southeastern Asset Management, released its Q2 2025 investor letter. Here is what the fund said:
“Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) – Healthcare company Regeneron detracted in the quarter. While we have followed the company for a long time, Regeneron is a newer holding. The company has a net cash balance sheet and great owner-partners. Unlike most others in its industry, it has sworn off large M&A, and it recently began a share repurchase program. This quarter’s performance was disappointing to the market due to a significant focus on Eylea, a retinal disease medication which constitutes less than 20% of the company’s valuation. Later in the quarter, the company also had a negative clinical trial outcome for a potential new product. We took the opportunity to increase our position on the share price weakness when the stock price decline far outpaced the value per share impacts of these items.”
8. The PNC Financial Services Group, Inc. (NYSE:PNC)
Forward P/E: ~12.2x
5-year Revenue Growth: ~10%
Number of Hedge Fund Holders: 69
The PNC Financial Services Group, Inc. (NYSE:PNC) is one of the Most Undervalued Long Term Stocks to Buy According to Hedge Funds. On July 30, Oppenheimer upgraded the company’s stock to “Outperform” from “Perform” with a price objective of $238, as reported by The Fly. The firm noted that the shares have lagged both the banks and the broader market over the past year. That being said, it sees The PNC Financial Services Group, Inc. (NYSE:PNC) as a well-managed, high-quality, and consistently profitable regional banking company.
The PNC Financial Services Group, Inc. (NYSE:PNC) released results for Q2 2025, wherein its total revenue came in at $5.7 billion, reflecting a rise of $209 million, or 4%, due to the growth in both non-interest income and net interest income. Furthermore, The PNC Financial Services Group, Inc. (NYSE:PNC) highlighted that new customer acquisition continues to accelerate. The strength of its franchise led to strong loan and revenue growth even during an uncertain macro environment, with expenses remaining well-controlled.
Cullen Capital Management, LLC, operating under the name Schafer Cullen Capital Management, Inc. (SCCM), has released its Q1 2025 investor letter. Here is what the fund said:
“A position in The PNC Financial Services Group, Inc. (NYSE:PNC) was established during the quarter. PNC Financial is a large regional bank with $560 billion in assets and 2,200 branches across the Mid-Atlantic, Midwest and Southeast with retail and corporate banking operations as well as asset management services. In 2022, PNC acquired the US subsidiary of Spanish financial group BBVA, increasing PNC’s size by roughly 25%. The bank has also been successful at organically expanding its customer base, both in commercial banking and in retail. Its expanding client base has led to solid loan, deposit, and fee income growth. Shares of PNC were purchased at 13.1x earnings with a 3.4% dividend yield.”
7. ConocoPhillips (NYSE:COP)
Forward P/E: ~14.3x
5-year Revenue Growth: ~14.2%
Number of Hedge Fund Holders: 70
ConocoPhillips (NYSE:COP) is one of the Most Undervalued Long Term Stocks to Buy According to Hedge Funds. On July 22, Raymond James lifted the price objective on the company’s stock to $117 from $109, while keeping an “Outperform” rating, as reported by The Fly. While there are macro uncertainties, the oil price has, for the time being, witnessed a recovery. Therefore, the firm sees minimal activity changes from management teams.
Amidst a volatile macro environment, ConocoPhillips (NYSE:COP) remains confident in the competitive advantages offered by the differentiated portfolio, healthy balance sheet, and disciplined capital allocation framework, which prioritizes returns on and of capital to shareholders. ConocoPhillips (NYSE:COP) believes that its fundamental long-term value proposition remains differentiated. It possesses a deep, durable, and diverse portfolio with decades of high-quality, low-cost supply inventory to develop.
Furthermore, the company remains on the cusp of a compelling multi-year FCF growth trajectory, thanks to its high-quality, longer-cycle investments in Alaska and LNG.
6. Elevance Health, Inc. (NYSE:ELV)
Forward P/E: ~9.3x
5-year Revenue Growth: ~10.8%
Number of Hedge Fund Holders: 75
Elevance Health, Inc. (NYSE:ELV) is one of the Most Undervalued Long Term Stocks to Buy According to Hedge Funds. On July 25, Baird analyst Michael Ha reduced the price target on the company’s stock to $297 from $492, while keeping a “Neutral” rating, as reported by The Fly. This comes as part of an update on the managed care and healthcare facilities group. Notably, the firm remains increasingly cautious on Medicaid and the healthcare exchange. While the external environment has been evolving, Elevance Health, Inc. (NYSE:ELV) remains focused on managing healthcare costs, deploying targeted investments in advanced technology and value-based care delivery, and reinforcing the operational foundation, which helps the long-term value creation.
Elevance Health, Inc. (NYSE:ELV)’s operating revenue came in at $49.4 billion in Q2 2025, reflecting a rise of $6.2 billion, or 14% compared to Q2 2024. This was because of increased premium yields in its Health Benefits segment, recently closed acquisitions, as well as growth in the Medicare Advantage membership, partially mitigated by the membership attrition in the Medicaid business. As a result of the embedded earnings power of Elevance Health, Inc. (NYSE:ELV)’s diversified Health Benefits and Carelon businesses, it expects to achieve a minimum of 12% average annual growth in adjusted diluted EPS over time.
Hotchkis & Wiley, an investment management company, released its Q1 2025 investor letter. Here is what the fund said:
“Elevance Health, Inc. (NYSE:ELV), formerly known as Anthem, is a large health insurer, and the largest commercial health insurer. ELV is priced at a discount to the market; however, we believe it is a superior business, growing faster than gross domestic product while still returning most of its cash to shareholders. ELV reported earnings that were in line with consensus. Costs remain elevated but ELV reported signs of stabilization in Medicaid utilization trends. Management also provided guidance for stable Medicare Advantage margins in 2025. Overall, this was a positive quarter for ELV as commercial performance remains strong and it showed signs of normalization for utilization and cost trends.”
5. The Progressive Corporation (NYSE:PGR)
Forward P/E: ~14x
5-year Revenue Growth: ~15.2%
Number of Hedge Fund Holders: 91
The Progressive Corporation (NYSE:PGR) is one of the Most Undervalued Long Term Stocks to Buy According to Hedge Funds. On August 5, analyst Elyse Greenspan of Wells Fargo maintained a “Buy” rating on the company’s stock, boosting the price objective to $333.00. The analyst’s rating is backed by the company’s strategic management of its expenses and pricing strategies. The Progressive Corporation (NYSE:PGR) exhibited operating leverage by improving the expense ratio, excluding advertising spend, indicating efficient cost management.
Furthermore, The Progressive Corporation (NYSE:PGR)’s decision to maintain increased advertising expenditure exhibits a commitment to growth, which can enhance its market position. Despite the concerns related to the tariff uncertainties and potential impacts on loss costs, The Progressive Corporation (NYSE:PGR) kept its personal auto rates stable and adequately priced in most states. Also, The Progressive Corporation (NYSE:PGR) remains proactive in adjusting rates for personal property and commercial auto, demonstrating its adaptability to market conditions.
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:
“The Progressive Corporation (NYSE:PGR) underperformed as growth in policies slowed down. Investors also grew concerned about the impact of tariffs on costs. The company remains well positioned to outperform peers over the long term given its scale.”
4. Pfizer Inc. (NYSE:PFE)
Forward P/E: ~8.4x
5-year Revenue Growth: ~10.3%
Number of Hedge Fund Holders: 99
Pfizer Inc. (NYSE:PFE) is one of the Most Undervalued Long Term Stocks to Buy According to Hedge Funds. On August 5, the company released its financial results for Q2 2025 and reaffirmed the 2025 revenue guidance, while increasing the guidance for adjusted diluted EPS. Pfizer Inc. (NYSE:PFE)’s strong Q2 2025 revenue and EPS performance exhibit its continued emphasis on commercial execution and operational efficiency.
Pfizer Inc. (NYSE:PFE)’s Q2 2025 revenues came in at $14.7 billion, reflecting an increase of $1.4 billion, or 10%, as compared to the prior-year quarter, demonstrating an operational increase of $1.3 billion, or 10%, and a favorable impact of foreign exchange of $22 million. The operational increase was mainly because of an increase in revenues for the Vyndaqel family, Comirnaty, Paxlovid, Padcev, Eliquis, and several other products throughout categories, despite the unfavorable impact of increased manufacturer discounts due to the Inflation Reduction Act (IRA) Medicare Part D Redesign.
Pfizer Inc. (NYSE:PFE) raised FY 2025 adjusted diluted EPS guidance by $0.10 at the midpoint to the range of $2.90 to $3.10. For the same period, the company expects revenues in the range of $61.0 billion – $64.0 billion.
3. Alibaba Group Holding Limited (NYSE:BABA)
Forward P/E: ~13.6x
5-year Revenue Growth: ~14.3%
Number of Hedge Fund Holders: 125
Alibaba Group Holding Limited (NYSE:BABA) is one of the Most Undervalued Long Term Stocks to Buy According to Hedge Funds. On July 24, Mizuho’s analyst, Wei Fang, reduced the price objective on the company’s stock from $160 to $149, hinting at the growing concerns related to the profit margins. As per the analyst, increased competition in China’s local commerce sector, mainly in food delivery and instant retail, is starting to impact Alibaba Group Holding Limited (NYSE:BABA)’s bottom line.
However, the analyst was confident in Alibaba Group Holding Limited (NYSE:BABA)’s long-term outlook and maintained an “Outperform” rating. The consumer demand remained robust during the June quarter, thanks to the promotional events and smartphone trade-in offers. For FY 2025, Alibaba Group Holding Limited (NYSE:BABA)’s user-first AI-driven strategy delivered healthy results amidst accelerated growth throughout its core businesses. Alibaba Group Holding Limited (NYSE:BABA) established a well-defined growth portfolio focused on AI + Cloud, e-commerce, and other internet platform businesses.
The company continues to seize the historic opportunity offered by AI and has been ramping up its investments in AI infrastructure and advanced technologies to further strengthen Alibaba Group Holding Limited (NYSE:BABA)’s global leadership in technology. Patient Capital Management, a value investing firm, released its Q2 2025 investor letter. Here is what the fund said:
“Alibaba Group Holding Limited (NYSE:BABA) sold off early in the quarter following President Trump’s “Liberation Day” tariff announcement, which imposed ~50% tariffs on Chinese goods. As the US and China moved toward tentative agreements, the stock began to recover. Fundamentally, we continue to see an attractive setup. Alibaba is benefiting from accelerating AI initiatives, renewed momentum in its Tmall platform, and rapid growth in instant shopping and local services. These trends support a broader turnaround in core commerce and digital services. Despite these tailwinds, the company trades at just 11.2x earnings, well below historical averages, and continues to return capital to shareholders through a 1% dividend yield and a robust buyback program. We believe Alibaba remains significantly undervalued relative to its sum-of-the-parts, and see meaningful upside as fundamentals stabilize and sentiment improves.”
2. JPMorgan Chase & Co. (NYSE:JPM)
Forward P/E: ~14.9x
5-year Revenue Growth: ~10.9%
Number of Hedge Fund Holders: 129
JPMorgan Chase & Co. (NYSE:JPM) is one of the Most Undervalued Long Term Stocks to Buy According to Hedge Funds. On July 30, JPMorgan Chase & Co. (NYSE:JPM) and Coinbase announced a strategic partnership, setting a new standard for customer choice as well as security in the innovation economy. Through JPMorgan’s secure API, Chase customers can link their bank accounts to Coinbase wallets. As a result, the direct connection is expected to help mutual customers transact with security and privacy.
As per Melissa Feldsher, Head of Payments and Lending Innovation for JPMorganChase, with Ultimate Rewards, which happens to be the most flexible loyalty program, the customers can now securely convert their points into cryptocurrencies. JPMorgan Chase & Co. (NYSE:JPM)’s Chief highlighted that the US economy was resilient in Q2 2025. The finalization of tax reform and potential deregulation were positive for the broader economic outlook. That being said, significant risks continue to loom, such as tariffs and trade uncertainty, impacting the geopolitical conditions.
JPMorgan Chase & Co. (NYSE:JPM)’s Consumer & Community Banking business saw revenue of $18.8 billion, a rise of 6% YoY. This was predominantly because of increased net interest income in Card Services on higher revolving balances, elevated non-interest revenue in Banking & Wealth Management, and increased operating lease income in Auto.
Carillon Tower Advisers, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“JPMorgan Chase & Co. (NYSE:JPM) also contributed to performance due to optimism regarding the election outcome. Investors expect a wave of deregulation, and a more permissive stance on M&A could bode well for JPMorgan’s capital markets businesses.”
1. UnitedHealth Group Incorporated (NYSE:UNH)
Forward P/E: ~14.6x
5-year Revenue Growth: ~11.2%
Number of Hedge Fund Holders: 139
UnitedHealth Group Incorporated (NYSE:UNH) is one of the Most Undervalued Long Term Stocks to Buy According to Hedge Funds. On August 4, Bernstein reduced the price target on the company’s stock to $337 from $377, while keeping an “Outperform” rating, as reported by The Fly. The firm reduced its estimates after the Q2 2025 report in order to reflect UnitedHealth Group Incorporated (NYSE:UNH)’s lower earnings power base in 2025. However, the firm is optimistic about the company’s earnings growth, thanks to the turnaround for both the company and the sector.
UnitedHealth Group Incorporated (NYSE:UNH) has updated its 2025 outlook. It expects revenues in the range of $445.5 billion – $448.0 billion, net earnings of at least $14.65 per share, and adjusted earnings of at least $16.00 per share. This new outlook showcases the H1 2025 performance and expectations for the balance of the year, such as higher realized and anticipated care trends. UnitedHealth Group Incorporated (NYSE:UNH) anticipates returning to earnings growth in 2026. The company’s Q2 2025 revenues saw an increase of $12.8 billion YoY to $111.6 billion because of the growth within UnitedHealthcare and Optum.
RiverPark Advisors, an investment advisory firm and sponsor of the RiverPark family of mutual funds, released its Q2 2025 investor letter. Here is what the fund said:
“UnitedHealth Group Incorporated (NYSE:UNH): UNH was the portfolio’s weakest performer in Q2. The company’s Q1 results, reported in April, showed 5% revenue growth but declining earnings as medical cost ratios rose to 84.8%. Higher-than-expected utilization in outpatient procedures, particularly among Medicare Advantage and Medicaid patients, pressured margins. The company subsequently lowered full-year guidance during its June investor update.
The stock sold off sharply in response to concerns that elevated utilization trends could persist through year-end. Margin compression, combined with regulatory uncertainty around Medicare Advantage rate-setting, weighed heavily on investor sentiment. Sell-side analysts revised estimates downward, highlighting near-term earnings risk.
Despite the short-term volatility, we continue to view UnitedHealth as one of the strongest franchises in healthcare. The company’s integrated model, combining insurance, pharmacy benefits, and care delivery, positions it well for long-term value creation. We expect utilization to normalize over the next 12-18 months and believe UNH’s earnings power remains intact over a multi-year horizon.”
While we acknowledge the potential of UNH 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 UNH and that has 100x upside potential, check out our report about this cheapest AI stock.
READ NEXT: 13 Cheap AI Stocks to Buy According to Analysts and 11 Unstoppable Growth Stocks to Invest in 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.
