In this piece we will take a look at the five best stocks under $50. For more stocks, head on to 12 Best Stocks Under $50.
5. Suncor Energy Inc. (NYSE:SU)
Share Price as of July 21, 2022: $31.37
Number of Hedge Fund Holders: 41
Suncor Energy Inc. (NYSE:SU) is a Canadian oil company headquartered in Calgary. The firm engages in the exploration, acquisition, and selling of crude oil, petroleum products, diesel, and diesel dilutant. It also has wind power generation facilities. Additionally, it also markets natural gas and other power products.
Suncor Energy Inc. (NYSE:SU), like other Canadian energy companies, is expected to pay out at least 50% of its cash flows back to investors in the form of dividends and share repurchase programs next year. Another benefit for the company is that its oil fields have long life and set to benefit it for years to come. Additionally, the company has the initiatives in place to both retire its debt and return cash to investors as noted earlier. As a cool cherry on top, Suncor Energy Inc. (NYSE:SU) has some of the highest dividend yields out there, with a quarterly per share dividend of 37 cents resulting in a 4.62% dividend yield.
Credit Suisse kept a CAD$63 price target for the company in July 2022, citing optimism for its recent deal with an activist investor as it outlined that the affair can improve the oil company’s safety record. Insider Monkey took a look at 912 hedge fund portfolios for this year’s first quarter and found out that 41 had bought Suncor Energy Inc. (NYSE:SU)’s shares.
Suncor Energy Inc. (NYSE:SU)’s largest investor is Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital which owns 16.8 million shares that are worth $548 million.
ClearBridge Investments mentioned Suncor Energy Inc. (NYSE:SU) in its Q1 2022 investor letter to outline that:
“Also within the structural bucket, we added to our commodity exposure with the purchase of Suncor Energy (NYSE:SU). Suncor, a past holding, is a Canadian integrated oil company where we capitalized on attractive valuation due to a COVID-19-induced slowdown. We expect recovery in oil demand and strong pricing will result in faster than expected free cash flow growth and financial deleveraging.
The structural bucket has the shortest investment horizon across the spectrum of growth companies we target in the Strategy. We closely monitor the macro impacts and turnaround progress of these companies and will be disciplined sellers when the thesis for a holding plays out.”
4. Bank of America Corporation (NYSE:BAC)
Share Price as of July 21, 2022: $33.51
Number of Hedge Fund Holders: 99
Bank of America Corporation (NYSE:BAC) is one of the oldest American banks that was founded in 1784 and is headquartered in Charlotte, North Carolina. It has a diverse set of customers that include individual customers, companies, government bodies, institutional investors, and others.
In the wake of rising interest rates, Bank of America Corporation (NYSE:BAC) raised its dividend by 1 cent in July 2022, bringing it to 22 cents and payable to shareholders of record as of September 2.
Bank of America Corporation (NYSE:BAC)’s strength is visible by the fact that despite its share price falling close to 27% this year, it still has a price to earnings ratio of 10 and a dividend yield of 2.7%. 99 of the 912 hedge funds surveyed by Insider Monkey for their Q1 2022 portfolio had bought the company’s shares.
Warren Buffett’s Berkshire Hathaway is Bank of America Corporation (NYSE:BAC)’s largest investor. It has a $41 billion stake that comes through one billion shares.
In its first quarter of 2022 investor letter, Aristotle Capital Management mentioned Bank of America Corporation (NYSE:BAC) and stated:
“We first invested in Bank of America during the second quarter of 2013. During our near decade as investors, Bank of America closed the chapter on the legacy issues from acquired Countrywide, including mortgage write-downs and substantial legal charges. In addition, it successfully turned the Merrill Lynch franchise into one of the leading U.S. brokerage and advisory firms. Thanks to what we consider to be a strong management team led by CEO Brian Moynihan, the bank went through years of simplification, improved its cost structure and efficiency ratio, and reduced risk. While we believe Bank of America remains a much-improved market leader, we decided to exit our position and use the proceeds to invest in Brookfield Asset Management.”
3. Corning Incorporated (NYSE:GLW)
Share Price as of July 21, 2022: $34.63
Number of Hedge Fund Holders: 43
Corning Incorporated (NYSE:GLW) is a lesser known company that plays a crucial role in the technology industry. The firm is responsible for manufacturing and selling optical and display technologies that are used in crucial applications such as semiconductor manufacturing and in a host of devices such as smartphones and notebooks.
Corning Incorporated (NYSE:GLW)’s strongest suit is the fact that it is one of the world’s premium manufacturers of optical fiber cables. These cables will be utilized massively in the rollout of fifth generation (5G) infrastructure, and the optical segment grew its revenues by 28% annually in its latest earnings report. Additionally, a subsidiary of the company caters to the chip industry, and it saw its sales grow by 38.5%.
Insider Monkey’s 912 hedge fund survey for this year’s March quarter saw 43 as having bought the company’s shares.
Corning Incorporated (NYSE:GLW)’s largest investor is Jim Simons’s Renaissance Technologies. It owns 2.4 million shares that are worth $90 million.
2. Wells Fargo & Company (NYSE:WFC)
Share Price as of July 21, 2022: $43.34
Number of Hedge Fund Holders: 93
Wells Fargo & Company (NYSE:WFC) is a financial services company that was formed in 1852 and is headquartered in San Francisco, California, United States. It offers a host of services such as investment, mortgage finance, commercial finance, and other banking services.
Basic, yet crucial financial metrics, such as return on tangible share holder equity (ROTCE) and net interest income (NII) paint a bright picture for Wells Fargo & Company (NYSE:WFC)’s future. The company is expected to have an ROTCE of 10% and grow it to 15% over the next couple of years and its NII is slated to grow by an equally impressive 20%.
Like other banks, Wells Fargo & Company (NYSE:WFC)’s fee income dropped in its latest quarter, which made Barclays reduce its share price target to $58 from $64 in July 2022, along with maintaining an Overweight rating. By the end of Q1 2022, 93 of the 912 hedge funds in Insider Monkey’s database had invested in the bank. Wells Fargo & Company (NYSE:WFC) also pays out a 25 cent quarterly dividend per share for a 2.29% dividend yield.
Patrick Degorce’s Theleme Partners is Wells Fargo & Company (NYSE:WFC)’s largest investor. It holds an $884 million stake that comes through 18 million shares.
Wells Fargo & Company (NYSE:WFC) made an appearance in Davis Funds’s Q4 2021 investor letter, with the fund stating that:
“The absolute level of revenues and profits generated by such companies is in fact so large that most of the major financial holdings in the portfolio produce enough annual operating income individually that a number of them could, in theory, purchase several entire businesses among hundreds of choices within the S&P 1500 Index, using just a year’s cash earnings without dipping into capital. This is theoretical, as financial companies would not be in the business of buying healthcare or technology companies, for example, but we point out these facts to illustrate the sheer scale of the economics produced by single financial companies in a given year, which is often a multiple of the cash earnings yielded by companies in a host of other industries.
Given this cash-generation power, we are naturally drawn to what we believe are strong and profitable financial institutions when the price is right. Presently, we believe the valuations of our financial holdings are not only reasonable, but extremely compelling, and our portfolio composition reflects this view. Representative financial holdings in the Fund includes Wells Fargo.”
1. Canadian Natural Resources Limited (NYSE:CNQ)
Share Price as of July 21, 2022: $47.55
Number of Hedge Fund Holders: 32
Canadian Natural Resources Limited (NYSE:CNQ) is, as its name suggests, a Canadian company that engages in the exploration and development of crude oil, natural gas, and natural gas liquids. It has millions of barrels of proven oil reserves and is headquartered in Calgary.
Canadian Natural Resources Limited (NYSE:CNQ) has one of the strongest dividend yields out there at 4.6%, and to further improve this, the dividend is growing at a compounded annual growth rate of 22%. Furthermore, the company has pledged to pay 50% of its cash flows to investors through share repurchases as long as its debt levels stay below $1.5 billion. Canadian Natural Resources Limited (NYSE:CNQ) also pays out a quarterly dividend of 58 cents per share, for an impressive dividend yield of 4.41%.
Canadian Natural Resources Limited (NYSE:CNQ) is also a rare company that saw a stock rating upgrade in July 2022, when BofA upgraded its rating to Buy and kept a $100 share price target. The only thing that kept the bank from increasing its share price is its gloomy outlook for crude oil prices. 32 of the 912 hedge funds researched by Insider Monkey in Q1 2022 had bought the energy company’s shares.
Canadian Natural Resources Limited (NYSE:CNQ)’s largest investor is Donald Yacktman’s Yacktman Asset Management which owns 16.9 million shares that are worth $1 billion.
Disclosure: None. You can also take a look at 10 Best Undervalued Automobile Stocks to Buy Now and 10 Semiconductor Stocks to Buy Today According to Billionaire Ken Fisher.
