In this article, we shed light on the 12 deep value stocks to invest in.
Market concerns on valuation, particularly in the tech space, and a potential for correction seem to be taking center stage in investor discussions. A case in point is Palantir, which fell nearly 8% on November 4. This decline came despite the company’s strong earnings and upbeat guidance, triggering a broader sell-off that dragged the S&P 500 lower by 1.17% and the Nasdaq by more than 2%. Following Jim Cramer’s examination of the market reaction to Palantir’s steep decline, Wall Street’s obsession with high-growth technology and AI stocks was thrown into the spotlight.
CNBC’s Cramer said the drop shows “how money managers, when asked if the market’s too expensive, immediately think of the high-flying speculative stocks or those in the high-growth artificial intelligence column.” He added that such a mindset “warns you away from the entire asset class.” With such a reaction, he believes investors are overlooking “the other 334 stocks in the S&P 500 that sell for less than 23 times earnings — those aren’t outrageous.”
He does not see Palantir’s stumble as a sign of weakness, but instead sees it as a moment of cooling for overheated valuations. Amid the ongoing AI boom, Cramer hinted that opportunities may lie elsewhere.
Meanwhile, the day also saw other tech names posting declines. Oracle and Advanced Micro Devices both experienced a downtick of roughly 4%, having recorded massive gains this year. Responding to the loss of confidence among investors, Goldman Sachs’s David Solomon said, “likely there’ll be a 10 to 20% drawdown in equity markets sometime in the next 12 to 24 months.”
In this regard, we would also highlight Ameriprise’s Anthony Saglimbene’s recent comments on a CNBC interview, “Breadth in the market has been pretty narrow for the last several months. If there is a slowing momentum or a near-term downturn in AI or tech, there really aren’t other areas that have performed as well, and if we don’t have a lot of clear data on the economy, and profitability across the rest of the S&P 500 isn’t as strong, where do you go?”
Against this backdrop, although headlines are dominated by high-growth tech and AI stocks, there may be other areas where we can search for attractive stock picks, not necessarily from AI-fueled sectors. Instead, deep value stocks could hold significant potential for investors. These stocks are those trading at reasonably low valuations, with steady earnings and strong fundamentals.
We present below our list of the 12 deep value stocks to invest in.
Our Methodology
To curate our list of the 12 deep value stocks to invest in, we started by screening U.S.-listed companies with a market capitalization of over $2 billion, a forward price-to-earnings (P/E) ratio of 8 or lower, a return on equity of at least 10%, and a dividend yield of at least 1%. We then shortlisted the top 12 stocks that have the highest number of hedge funds holding stakes in them, based on Insider Monkey’s hedge fund database, as of Q2 2025. Finally, our list of 12 deep value stocks is presented below in ascending order by the number of hedge funds that hold stakes in each respective 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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
12. Bread Financial Holdings, Inc. (NYSE:BFH)
Forward P/E: 6.54
Return on Equity: 14.78%
Dividend Yield: 1.45%
Number of Hedge Fund Holders: 30
Bread Financial Holdings, Inc. (NYSE:BFH) is included in our list of the 12 deep value stocks to invest in.
On October 24, 2025, RBC Capital raised its price target on Bread Financial Holdings, Inc. (NYSE:BFH) from $64 to $70, maintaining a “Sector Perform” rating. The investment firm’s revised target reflected improving credit trends, another modest reserve release, and a stable outlook. The revision was also attributed to the consistency shown in the company’s quarterly results.
On the previous day, Bread Financial Holdings, Inc. (NYSE:BFH) reported its Q3 2025 results. The company surpassed analyst expectations with EPS of $4.02, compared to a forecast of $2.19. The increase in net income to $188 million was supported by a 5% YoY growth in credit sales, thanks to resilient consumer spending across categories like apparel and beauty. The company also noted strengthening credit quality during the quarter, with net loss rates improving sequentially.
Bread Financial Holdings, Inc. (NYSE:BFH) also declared a 10% dividend increase, alongside an expanded $200 million share repurchase authorization, thanks to its expense discipline, steady credit performance, and growing digital capabilities.
Bread Financial Holdings, Inc. (NYSE: BFH), a tech-enabled financial services company, offers personalized payment, lending, and savings solutions to consumers.
11. Vale S.A. (NYSE:VALE)
Forward P/E: 6.64
Return on Equity: 13.27%
Dividend Yield: 6.6%
Number of Hedge Fund Holders: 32
Vale S.A. (NYSE:VALE) is one of the 12 deep value stocks to invest in.
On November 3, 2025, Jefferies raised its price target on Vale S.A. (NYSE:VALE) from $14 to $15, while maintaining a “Buy” rating. The investment firm’s bullish sentiment stems from the company’s strong Q3 results, which surpassed analyst expectations. The firm’s confidence was bolstered by the company’s operational discipline, as it highlighted Vale’s $14 billion LTM EBITDA, strong free cash flow yield, and reduction in net debt. Within the iron ore market, the investment firm sees the company as its top pick, as it expects Vale to potentially generate increased capital returns through improved financial strength and lower unit costs in copper and nickel.
Meanwhile, on October 30, 2025, Vale S.A. (NYSE:VALE) released its Q3 results. The quarter saw a 17% YoY EBITDA growth to $4.4 billion, supported well by strong iron ore and base metals output and cost efficiencies. While iron ore production hit 94 million tons, the highest Q3 output since 2018, copper and nickel costs reached multi-year lows.
Vale S.A. (NYSE:VALE), a global mining company, is focused on the production of iron ore, nickel, copper, and related by-products.
10. Lincoln National Corporation (NYSE:LNC)
Forward P/E: 5.23
Return on Equity: 23.08%
Dividend Yield: 4.17%
Number of Hedge Fund Holders: 32
Lincoln National Corporation (NYSE:LNC) is included in our list of the 12 deep value stocks to invest in.
On November 3, 2025, Keefe, Bruyette & Woods increased its price target on Lincoln National Corporation (NYSE:LNC) from $43 to $44, reiterating a “Market Perform” rating.
Meanwhile, on October 30, 2025, Lincoln National Corporation (NYSE:LNC) released its Q3 results, marked by steady progress in strengthening its balance sheet, diversifying its product mix, and enhancing profitability.
For the quarter, Lincoln National Corporation (NYSE:LNC) reported EPS of $2.04, beating analysts’ expectations of $1.84. It was the company’s fifth straight quarter of year-over-year adjusted operating income growth, with $4.5 billion in sales. The company has recorded consecutive sales growth over the past four quarters.
In the earnings call, Lincoln’s CEO attributed the strong quarterly performance to “broad-based momentum and disciplined execution” across all four business segments. Particularly, life insurance earnings noted a significant YoY improvement, reaching $54 million. Looking ahead, Lincoln National Corporation (NYSE:LNC) aims to leverage its strong capital buffer to further optimize its operating model for efficiency and scalability.
With its annuities, life insurance, group protection, and retirement plan services, Lincoln National Corporation (NYSE:LNC) helps individuals secure a financially successful future.
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