In this article, we will look at the 13 Undervalued Cyclical Stocks to Buy According to Hedge Funds.

On August 15, Charles Bobrinskoy, Vice Chairman of Ariel Investments, joined CNBC Television for an interview to discuss cyclical sectors, such as housing, in the current market scenario. Earlier, Bobrinskoy released a note stating that value has been quietly outperforming growth this month, and he sees value in the housing sector. He noted that investors typically buy cyclical sectors, such as housing, when earnings are down and P/E multiples are high. However, right now, investors can buy when there are low, depressed earnings, but at very low multiples.

Bobrinskoy acknowledged that the inflation is high and the labor market is also expensive, which is making it difficult for people to buy new homes. However, he emphasized that even if the market gets to a normal housing environment where consumers are only repairing and remodeling their houses, there are a lot of housing stocks that look attractive.

While answering concerns related to inflation and interest rates being a challenge for even a repair and remodeling situation. Bobrinskoy argues that these challenges make him more optimistic because if the consumers are not able to buy new houses, they would look to upgrade their current residences, which would bring the market to a repair and remodel environment.

Lastly, Bobrinskoy remains a little uncertain regarding the impact of the tariff on the cyclical sector. He noted that companies have been wanting to increase prices but have been waiting for tariffs to consolidate. Now that most of the tariff news is out, Bobrinskoy believes it is going to show up as a shock in this quarter’s earnings.

With that, let’s take a look at the 13 undervalued cyclical stocks to buy according to hedge funds.

Our Methodology

To compile the list of 13 undervalued cyclical stocks to buy according to hedge funds, we used the Finviz stock screener and Seeking Alpha as our sources. First, we aggregated a list of cyclical stocks trading below the forward P/E of 15. Next, we cross-checked the P/E ratio of each stock from Seeking Alpha and ranked the stocks in ascending order of the number of hedge fund holders sourced from Insider Monkey’s Q1 2025 database.

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).

13 Undervalued Cyclical Stocks to Buy According to Hedge Funds

13. Ford Motor Company (NYSE:F)

Forward P/E Ratio: 9.82

Number of Hedge Fund Holders: 39

Ford Motor Company (NYSE:F) is one of the Undervalued Cyclical Stocks to Buy According to Hedge Funds. On August 12, Federico Merendi from Bank of America Securities reiterated a Buy rating on Ford Motor Company (NYSE:F) with a price target of $14.

The analyst highlighted the company’s strategic moves in the electric vehicle industry, noting the recent launch of Universal Vehicle Platform at “Our Next Model T Moment”. The company with a $2 billion investment Louisville plant aims to revolutionize the production of EVs. Management noted during the event that its first vehicle on the platform will be affordable pickups, which are expected by 2027, with a starting price of almost $30,000.

The analyst noted that Ford Motor Company’s (NYSE:F) strength in the commercial vehicle segment supports this plan. The company is taking on its competitors in the market and learning from leading EV players by simplifying its production, reducing vehicle weight, and cutting down costs. The analyst believes that these steps position the company well in the electric vehicle market, both domestically and internationally.

Ford Motor Company (NYSE:F) designs, manufactures, and sells a range of vehicles, including trucks, SUVs, commercial vans, cars, and luxury Lincoln vehicles.

12. Aptiv PLC (NYSE:APTV)

Forward P/E Ratio: 9.58

Number of Hedge Fund Holders: 39

Aptiv PLC (NYSE:APTV) is one of the Undervalued Cyclical Stocks to Buy According to Hedge Funds. On August 8, Oppenheimer analyst Colin Rusch raised the firm’s price target on Aptiv PLC (NYSE:APTV) from $84 to $88, while keeping an Outperform rating on the stock.

The bullish sentiment follows the company’s strong second-quarter 2025 results. The analyst noted that the company is making progress in its non-light-duty vehicle areas and its AI solutions ecosystem. Rusch highlighted that while Aptiv PLC (NYSE:APTV) faces challenges from changing policies and fluctuating currency, its investment in emerging technologies is expected to keep the company a key player for vehicle makers.

Moreover, the company’s position in the aerospace, industrials, and commercial vehicles gives it valuable insights regarding new technological opportunities in the LDV space.

Aptiv PLC (NYSE:APTV) is a global technology company that creates connected solutions for a sustainable future in mobility.