5 Best Stocks Under $50 According to Hedge Funds

4. Valvoline Inc. (NYSE:VVV)

Number of Hedge Fund Holders: 39 

Share Price as of September 1: $29.07

Valvoline Inc. (NYSE:VVV) markets automotive maintenance products. In early August, the company announced that it had agreed to sell the global products business it owned to Saudi oil giant Aramco for $2.65 billion in cash. Under the terms of the deal, the former will own the brand for all retail services purposes globally, excluding China and certain countries in the Middle East and North Africa, while Aramco will own the Valvoline brand for all products used globally. The firm said it would use the funds to accelerate the return of capital to shareholders. 

On August 9, Citi analyst Chasen Bender maintained a Buy rating on Valvoline Inc. (NYSE:VVV) stock and lowered the price target to $35 from $37, noting the firm had a big growth opportunity ahead in retail services. 

Among the hedge funds being tracked by Insider Monkey, New York-based firm Brave Warrior Capital is a leading shareholder in Valvoline Inc. (NYSE:VVV), with 7.5 million shares worth more than $218 million. 

In its Q2 2021 investor letter, Wasatch Core Growth Fund highlighted a few stocks and Valvoline Inc. (NYSE:VVV) was one of them. Here is what the fund said:

“Another significant contributor was Valvoline Inc. (NYSE:VVV), a company that manufactures lubricants and car parts and operates oil-change service centers. In addition to benefiting from the economic reopening, the company has discovered the advantages of making a mobile app available. Valvoline Inc. (NYSE:VVV) customers can use the app to find the closest service center and view live estimated wait times. Certainly, the adoption of technology to improve productivity and convenience isn’t a new theme. But we see mobile digitalization as a highly disruptive innovation that creates additional relationships among companies, distributors and customers. As a result, mobile digitalization is a competitive consideration in more and more of the companies that we evaluate for investment. In the first quarter, Valvoline’s stock declined partially because investors worried about the increasing popularity of electric vehicles (EVs)—which are much less dependent on petroleum products. But the stock rebounded in the second quarter, we think partly based on the realization that EVs still represent a tiny percentage of new cars sold and an even smaller percentage of cars in service. Moreover, Valvoline Inc. (NYSE:VVV) reported strong earnings and raised projections for the future.”