On January 22, Dan Ives, Global Head of Technology Research at Wedbush Securities, and Jeff Kilburg, Founder & CEO of KKM Financial, appeared on CNBC to suggest that easing volatility, AI-driven tech strength, and falling rates support stock picking and potential new market highs. Kilburg expressed excitement over the president’s stated commitments for $18 trillion in domestic investments and noted that futures are pointing toward new all-time highs. Despite a minor market hiccup related to Greenland, Kilburg observed that the bears are being forced to chase the market higher. He highlighted the decline of the VIX, which retreated from above 20 to around 16, as a sign that recent market volatility was an overreaction and an opportunity for stock pickers to buy the dispersion in the market. He suggested that this subdued risk environment sets a positive landscape for the next 30 days, particularly in previously unloved sectors like healthcare, real estate, and energy.
Ives shifted the focus to the MAG7 and believes that the AI revolution is spreading through its second and third derivatives, making tech stocks a 10% to 15% run-up opportunity that investors cannot afford to miss. Dan Ives and Jeff Kilburg both agreed that the market is broadening, supported by the imminent decline of the 10-year Treasury note yield. Kilburg emphasized that even as the market awaits the appointment of a new Fed chairperson, the downward trajectory of interest rates remains a powerful tailwind for US equities across the board.
That being said, we’re here with a list of the 13 most undervalued quality stocks to buy right now.
Our Methodology
We sifted through the Vanguard US Quality Factor ETF holdings to compile a list of the undervalued stocks that had a forward P/E ratio under 15. We then selected 13 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q3 2025.
Note: All data was sourced on February 3.
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).
13 Most Undervalued Quality Stocks to Buy Right Now
13. WSFS Financial Corporation (NASDAQ:WSFS)
Number of Hedge Fund Holders: 22
WSFS Financial Corporation (NASDAQ:WSFS) is one of the most undervalued quality stocks to buy right now. On January 29, Keefe Bruyette updated its outlook on WSFS Financial and increased the price target to $70 from $63 alongside a Market Perform rating.
On the same day, Piper Sandler also increased its price target for WSFS Financial to $67 from $62 while maintaining a Neutral rating, citing a positive outlook following the company’s recent quarterly performance. The firm boosted its 2026 projections by 8% due to stronger pre-provision net revenue and an aggressive share buyback strategy. The firm noted that the accelerating trends in loans and deposits, coupled with disciplined credit management and significant capital returns, represent a potentially transformative shift in the investment thesis for the stock.
A day before these ratings, TD Cowen raised the price target for WSFS Financial to $73 from $67, keeping a Buy rating following the company’s Q4 2025 results. The upward revision reflects an updated financial model that anticipates sustained growth through 2026, driven by continued strength in the bank’s Wealth and Trust divisions. Earlier, in Q4 2025, WSFS Financial Corporation (NASDAQ:WSFS) headlined a 29% year-over-year increase in EPS to $1.43.
WSFS Financial Corporation (NASDAQ:WSFS) operates as the savings and loan holding company for the Wilmington Savings Fund Society, FSB that provides various banking services in the US.
12. Primerica Inc. (NYSE:PRI)
Number of Hedge Fund Holders: 29
Primerica Inc. (NYSE:PRI) is one of the most undervalued quality stocks to buy right now. On January 28, TD Cowen increased its price target for Primerica to $326 from $322 while maintaining a Buy rating on the shares. This adjustment was made as part of the firm’s broader Q4 2025 preview of the life insurance group, in which TD Cowen maintains a balanced sector view despite anticipating a slight headwind from lower alternative returns.
In Q3 2025, Primerica Inc. (NYSE:PRI) reported a 7% increase in adjusted net operating income to $206 million, with diluted adjusted operating EPS rising 11% to $6.33. The company’s Investment and Savings Product segment was a major growth driver, achieving record sales of $3.7 billion, which was a 28% year-over-year surge, while client asset values reached $127 billion.
However, the Term Life segment faced significant headwinds, as new policies issued dropped 15% compared to the previous year. Management attributed this decline to cost-of-living pressures and economic uncertainty, which have caused clients to delay financial decisions and led to lapse rates exceeding long-term assumptions. Additionally, while the sales force is projected to grow to 153,000 representatives by year-end, recent recruiting and licensing figures have slowed.
Primerica Inc. (NYSE:PRI), together with its subsidiaries, provides financial products and services to middle-income households in the US and Canada.
11. Mattel Inc. (NASDAQ:MAT)
Number of Hedge Fund Holders: 34
Mattel Inc. (NASDAQ:MAT) is one of the most undervalued quality stocks to buy right now. On February 2, Morgan Stanley analyst Megan Alexander Clapp increased the price target for Mattel to $22 from $21 while maintaining an Equal Weight rating. In a Q4 2025 earnings preview for the toymaking sector, Morgan Stanley suggested that the risk and reward profile is more favorably skewed toward Hasbro than Mattel.
Earlier on January 9, Goldman Sachs downgraded Mattel to Neutral from Buy while maintaining a $21 price target, citing a more balanced risk-to-reward profile at current valuations. The firm is adopting a wait-and-see approach regarding the progress of Mattel’s new growth initiatives and expresses caution toward the 2026 toy market. Specifically, the firm highlighted concerns over a challenging macroeconomic environment, the potential impact of tariffs and price increases, and shifting retailer sentiment as primary reasons for their neutral stance.
However, on January 7, UBS raised the firm’s price target on Mattel to $30 from $29, while maintaining a Buy rating as the company heads into 2026.
Mattel Inc. (NASDAQ:MAT) is a toy and family entertainment company that designs, manufactures, and markets toys and consumer products in North America, Latin America, Europe, the Middle East, Africa, and the Asia Pacific.
10. PPG Industries Inc. (NYSE:PPG)
Number of Hedge Fund Holders: 34
PPG Industries Inc. (NYSE:PPG) is one of the most undervalued quality stocks to buy right now. On January 30, Bernstein increased the price target for PPG Industries to $130 from $123 while keeping its Outperform rating. The firm observed that PPG Industries’ Q4 2025 results were well received by the market despite missing EPS expectations, and the firm remains optimistic about the company’s current setup.
A day before that, UBS analyst Joshua Spector raised the firm’s price target on PPG Industries to $122 from $110 and maintained a Neutral rating on the shares.
On the same day, RBC Capital analyst Arun Viswanathan raised the firm’s price target on PPG Industries to $115 from $109 but maintained a Sector Perform rating following a Q4 2025 earnings miss and a 2026 outlook that fell short of analyst expectations. The firm noted positive drivers like strong performance in the Aerospace and Protective & Marine segments, $100 million in Industrial market share gains, and effective cost-reduction efforts. However, Viswanathan also highlighted concerns over the Refinish segment destocking, rising costs, and broader Industrial challenges, which are expected to offset the benefits of low-single-digit price and volume growth.
PPG Industries Inc. (NYSE:PPG) manufactures and distributes paints, coatings, and specialty materials. It has three segments: Global Architectural Coatings, Performance Coatings, and Industrial Coatings
9. RenaissanceRe Holdings Ltd. (NYSE:RNR)
Number of Hedge Fund Holders: 37
RenaissanceRe Holdings Ltd. (NYSE:RNR) is one of the most undervalued quality stocks to buy right now. On January 14, Cantor Fitzgerald increased its price target for RenaissanceRe to $282 from $252 with a Neutral rating.
The firm suggested that the initial positive outlook for insurance brokers may have been premature and noted that near-term fundamentals are likely to decline before they improve. Although the firm continues to find the subgroup interesting, it anticipates negative revisions to consensus organic growth in the interim.
A day before the Cantor Fitzgerald rating, Wells Fargo lowered the firm’s price target on RenaissanceRe to $281 from $285, while maintaining an Equal Weight. Ahead of the insurance sector’s quarterly earnings results, the firm suggested that investors prioritize pricing, loss trends, and reserves for P&C companies. Additionally, the firm noted that the focus should be on organic growth and margins for brokers, as well as sales, capital, and guidance for life insurance companies.
RenaissanceRe Holdings Ltd. (NYSE:RNR), together with its subsidiaries, provides reinsurance and insurance products in the US and internationally. It has Property and Casualty & Specialty segments.
8. NetApp Inc. (NASDAQ:NTAP)
Number of Hedge Fund Holders: 38
NetApp Inc. (NASDAQ:NTAP) is one of the most undervalued quality stocks to buy right now. On January 20, Morgan Stanley analyst Erik Woodring downgraded NetApp to Underweight from Equal Weight, lowering the price target to $89 from $117.
This shift followed a CIO survey indicating the slowest hardware budget growth in 15 years, alongside reseller expectations of an elastic demand response to input cost inflation. The firm adopted a more defensive stance on IT hardware despite secular AI tailwinds and cited a perfect storm of cautionary factors emerging from its recent research.
Additionally, on January 13, Goldman Sachs analyst Katherine Murphy initiated coverage of NetApp with a Buy rating and a $128 price target. Although the firm projects the broader external storage market to grow at a modest 4% year-over-year in 2025, Murphy identified specific high-growth areas within various media and data storage categories. Based on these trends, the firm expects NetApp to maintain its leadership position in the expanding all-flash storage market.
NetApp Inc. (NASDAQ:NTAP) provides a range of enterprise software, systems, and services that customers use to transform their data infrastructures in the US, Canada, Latin America, Europe, the Middle East, Africa, and the Asia Pacific. It has two segments: Hybrid Cloud and Public Cloud.
7. State Street Corporation (NYSE:STT)
Number of Hedge Fund Holders: 43
State Street Corporation (NYSE:STT) is one of the most undervalued quality stocks to buy right now. On January 20, Truist lowered its price target for State Street to $136 from $138 while keeping a Hold rating, following an update to the firm’s model after Q4 2025 results. The adjustment reflects an increase in the firm’s estimates driven by stronger fees, which were partially offset by higher expenses.
On the same day, Morgan Stanley also lowered its price target on State Street to $164 from $168 with an Overweight rating. Despite the company delivering a 6% beat on EPS, the stock fell 6% as investors reacted to the absence of updated medium-term targets. The firm noted that the market was further pressured by implied 2026 guidance that sat 3% below consensus expectations, alongside cautious management commentary regarding future expenses.
In Q4 2025, State Street Corporation (NYSE:STT) reported a 14% year-over-year increase in EPS, while the full-year revenue reached ~$14 billion. The firm achieved significant scale, surpassing $50 trillion in assets under custody and administration for the first time, while Assets Under Management climbed 20% to $5.7 trillion. Profitability remained high with a 20% return on tangible common equity and $500 million in annual productivity savings.
State Street Corporation (NYSE:STT) provides various financial products and services to institutional investors.
6. Incyte Corporation (NASDAQ:INCY)
Number of Hedge Fund Holders: 46
Incyte Corporation (NASDAQ:INCY) is one of the most undervalued quality stocks to buy right now. On January 13, TD Cowen raised its price target for Incyte to $128 from $101 with a Buy rating on the shares. The firm’s optimism follows Incyte’s presentation of a strategic roadmap aimed at potentially tripling its revenue, excluding Jakafi, by 2029. With several Phase 3 trial readouts and initiations scheduled, the firm views 2026 as a pivotal year for both execution and delivery for the company.
Furthermore, on January 8, Goldman Sachs raised the price target on Incyte to $90 from $80 with a Neutral rating. The firm anticipates that the positive momentum from 2025, fueled by favorable market dynamics, stabilizing policy risks, and stronger fundamentals, will persist into 2026. The firm noted that these factors, along with effects like increased M&A, are expected to continue driving the sector forward.
Earlier on December 24, Truist analyst Srikripa Devarakonda raised the firm’s price target on Incyte Corporation (NASDAQ:INCY) to $103 from $93 with a Hold rating. The revision reflected the inclusion of the company’s mutant calreticulin program for essential thrombocythemia and myelofibrosis into the firm’s financial model
Incyte Corporation (NASDAQ:INCY) is a biopharmaceutical company that discovers, develops, and commercializes therapeutics in the US, Europe, Canada, and Japan.
5. Northern Trust Corporation (NASDAQ:NTRS)
Number of Hedge Fund Holders: 47
Northern Trust Corporation (NASDAQ:NTRS) is one of the most undervalued quality stocks to buy right now. On January 28, Goldman Sachs analyst Alexander Blostein raised the firm’s price target for Northern Trust to $148 from $130 while maintaining a Sell rating.
A day before that, Citi raised the firm’s price target on Northern Trust to $162 from $143, and kept a Neutral rating. The upward adjustment follows a Q4 2025 earnings beat, where the company reported an EPS of $2.42 and revenue of $2.14 billion. Additionally, the firm increased its estimates in response to Northern Trust’s 2026 outlook, which projects low- to mid-single-digit growth in net interest income and aims for more than 100 basis points of positive operating leverage.
TD Cowen also raised the firm’s price target on Northern Trust Corporation (NASDAQ:NTRS) on January 26 to $175 from $165 with a Buy rating. The revision follows the company’s Q4 2025 core EPS of $2.62, which surpassed expectations due to higher pre-tax pre-provision income and lower-than-anticipated provision expenses. The firm expressed confidence in Northern Trust’s 2026 outlook, citing building momentum in fee-based businesses and strong execution in expense management as key drivers for future performance.
Northern Trust Corporation (NASDAQ:NTRS) is a financial holding company that provides wealth management, asset servicing, asset management, and banking solutions for corporations, institutions, families, and individuals. It operates in two segments, Asset Servicing and Wealth Management.
4. The Hartford Insurance Group Inc. (NYSE:HIG)
Number of Hedge Fund Holders: 49
The Hartford Insurance Group Inc. (NYSE:HIG) is one of the most undervalued quality stocks to buy right now. On February 2, Cantor Fitzgerald raised the price target for Hartford Financial to $165 from $160 with an Overweight rating. Following a period of initial volatility in the insurance broker sector, the firm noted that solid Q4 2025 results established a strong investment case for the company. While the firm expects mid-single-digit organic growth to be achievable in 2026, it cautions that commercial lines margins, particularly within the excess & surplus segment, may encounter near-term headwinds.
On February 1, Wells Fargo raised the firm’s price target on The Hartford Insurance Group Inc. (NYSE:HIG) to $156 from $153 and kept an Overweight rating. The adjustment followed the company’s Q4 2025 earnings beat, which was highlighted by a core EPS of $4.06.
Wells Fargo pointed to management’s commentary on expense ratio improvements, specifically targets to bring the Business Insurance ratio below 30% and Personal Insurance below 25%, as well as expectations for moderated auto pricing in 2026 to support customer retention.
The Hartford Insurance Group Inc. (NYSE:HIG), together with its subsidiaries, provides insurance and financial services to individual and business customers in the US, the UK, and internationally.
3. Synchrony Financial (NYSE:SYF)
Number of Hedge Fund Holders: 56
Synchrony Financial (NYSE:SYF) is one of the most undervalued quality stocks to buy right now. On January 29, Truist reduced the price target for Synchrony to $84 from $92 and kept a Hold rating on the shares. Following the company’s recent earnings report and subsequent guidance, the firm is adjusting its financial model and noted that the previous outlook on credit had been a little optimistic.
Following the release of Q4 2025 results, RBC Capital adjusted the price target for Synchrony to $85, down from $91, on January 28, while maintaining a Sector Perform rating. In a note to investors, the firm described the quarter as encouraging, citing year-over-year gains in credit metrics and spending volumes. Additionally, the firm noted that the 2026 outlook remains largely in line with previous expectations and recent commentary.
On the same day, TD Cowen reduced the price target for Synchrony Financial (NYSE:SYF) to $95 from $100 with a Buy rating. The firm revised its model after the company’s Q4 2025 results showed a beat on provisions, though net interest income and operating expenses were weaker than expected, and guidance aligned with previous projections.
Synchrony Financial (NYSE:SYF), together with its subsidiaries, operates as a consumer financial services company in the US. It provides credit products, such as credit cards, commercial credit products, and consumer installment loans.
2. Qualcomm Inc. (NASDAQ:QCOM)
Number of Hedge Fund Holders: 63
Qualcomm Inc. (NASDAQ:QCOM) is one of the most undervalued quality stocks to buy right now. On February 2, Cantor Fitzgerald lowered its price target for Qualcomm to $160 from $185 while keeping a Neutral rating.
Although the firm anticipates that Qualcomm will exceed expectations for the December quarter, it expects the company to issue conservative guidance for the upcoming periods, modestly below consensus for March and significantly below for June. This outlook is attributed to factors like Apple’s reduced modem share, Samsung’s transition to moving some modems in-house, and a decline in the Chinese handset market.
On January 25, Mizuho analyst Vijay Rakesh reduced the price target for Qualcomm Inc. (NASDAQ:QCOM) to $160 from $175 with a Neutral rating following an industry call regarding handsets. Rakesh informed investors that global handset estimates for 2026 are down 4% year-over-year, with further downside expected in H2 of the year due to memory shortages and pricing issues. Consequently, the firm lowered price targets across the sector.
Qualcomm Inc. (NASDAQ:QCOM) develops and commercializes foundational technologies for the wireless industry worldwide. It operates through three segments: Qualcomm CDMA Technologies/QCT, Qualcomm Technology Licensing/QTL, and Qualcomm Strategic Initiatives/QSI.
1. PayPal Holdings Inc. (NASDAQ:PYPL)
Number of Hedge Fund Holders: 86
PayPal Holdings Inc. (NASDAQ:PYPL) is one of the most undervalued quality stocks to buy right now. On January 28, Rothschild & Co. Redburn downgraded PayPal to Sell from Neutral and lowered its price target to $50 from $70.
Although the firm acknowledged PayPal’s scale should position it well for agentic commerce, it believes that this advantage will diminish as consumer behaviors shift. The firm noted that the marginal consumer is increasingly opting for alternative payment methods, with Shop Pay, Stripe Link, Apple Pay, and Google Pay identified as the platforms currently winning incremental users.
A day before this rating, on January 27, Cantor Fitzgerald analyst Ramsey El-Assal began coverage of PayPal with a Neutral rating and a $60 price target. The analyst observed that recent strategic moves have created a more profitable and balanced growth engine for the company’s Venmo, PSP, and Branded units. El-Assal expects this momentum to lead to additional volume and revenue acceleration in FY2026, even with intense competition.
PayPal Holdings Inc. (NASDAQ:PYPL) operates a technology platform that enables digital payments for merchants and consumers worldwide.
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