In this article, we will take a look at 5 best stocks under $50 to buy now. If you’d like to go through our overview of investing and some recent financial news, then please take a look at the 13 Best Stocks Under $50 to Buy Now.
5. Pfizer Inc. (NYSE:PFE)
Number of Hedge Fund Holders: 73
Share Price as of November 28: $30.08
Founded in 1849 by German entrepreneurs Charles Pfizer and Charles F. Erhart, Pfizer Inc. (NYSE:PFE) is a renowned multinational pharmaceutical and biotechnology corporation headquartered at The Spiral in Manhattan, New York City. Globally recognized for its extensive contributions to medical research, development, and production, Pfizer operates across various medical fields, including immunology, oncology, cardiology, endocrinology, and neurology. In 2022, Pfizer Inc. (NYSE:PFE) achieved remarkable success with its COVID-19 vaccine Comirnaty, generating an impressive $37.8 billion in alliance revenues and direct sales.
As of the conclusion of Q3 2023, data from Insider Monkey’s database revealed that 73 hedge funds maintained stakes in Pfizer Inc. (NYSE:PFE), a figure unchanged from the previous quarter. The combined value of these stakes exceeds $2.4 billion.
4. Teck Resources Ltd (USA) (NYSE:TECK)
Number of Hedge Fund Holders: 75
Share Price as of November 28: $37.08
Teck Resources Ltd (USA) (NYSE:TCK) is a mining and mineral development company involved in the extraction and exploration of diverse minerals, including copper, coal, zinc, and oil. The company operates in Canada, Chile, Peru, and the US, organized into five distinct business segments: Steelmaking, Coal, Copper, Zinc, Energy, and Corporate.
On November 13, Teck Resources Ltd (USA) (NYSE:TCK) disclosed agreements to divest its complete interest in its steelmaking coal business, valuing it at $9.0 billion. The deal involves selling a 77% stake to Glencore plc for $6.9 billion in cash, along with a minority stake to Nippon Steel Corporation. The proceeds from this transaction are earmarked for bolstering the company’s balance sheet, returning cash to shareholders, and unlocking value from its copper growth portfolio.
As of Q3 2023, Teck Resources Ltd (USA) (NYSE:TCK) was held by 75 hedge funds with the total shares valued at $2.7 billion. Eric Mandelblatt’s Soroban Capital Partners held the most shares with ownership of 10.1 million shares valued at $434 million.
3. Wells Fargo & Company (NYSE:WFC)
Number of Hedge Fund Holders: 77
Share Price as of November 28: $43.78
Established in 1852, Wells Fargo & Company (NYSE:WFC) stands as a prominent financial services entity, offering a comprehensive range of banking, investment, mortgage, consumer, and commercial finance products and services. With assets nearing $1.9 trillion, it holds a significant position as one of the leading financial services providers in the United States.
Wells Fargo & Company (NYSE:WFC) unveiled its third-quarter 2023 financial results on October 13, revealing a 7% year-over-year increase in total revenue to $20.9 billion. Concurrently, net income experienced a substantial surge, rising by 61% year-over-year to $5.8 billion. In response to these financial outcomes, on October 16, BMO Capital raised the price target for Wells Fargo & Company (NYSE:WFC) shares to $54 from $52 while maintaining a ‘Market Perform’ rating for the shares.
During Q3 2023, 77 out of the 910 hedge funds tracked by Insider Monkey were the bank’s investors. Wells Fargo & Company (NYSE:WFC)’s largest hedge fund shareholder is Eisler Capital due to its $2.23 billion stake.
2. Citigroup Inc. (NYSE:C)
Number of Hedge Fund Holders: 79
Share Price as of November 28: $45.75
Citigroup Inc. (NYSE:C), commonly known as Citi, is an American multinational investment bank and financial services corporation. It is incorporated in Delaware and has its headquarters in New York City.
On November 2, Bloomberg disclosed that Citigroup Inc. (NYSE:C) and The Goldman Sachs Group were selected to spearhead the initial public offering (IPO) of Ibotta, a digital marketing software firm. The anticipated valuation for the listing is $2 billion, and it is projected to take place in the coming year.
By the end of this year’s third quarter, 79 out of the 910 hedge funds surveyed by Insider Monkey had bought and owned Citigroup Inc. (NYSE:C)’s shares. The banks’ biggest investor out of these is Warren Buffett’s Berkshire Hathaway courtesy of its $2.2 billion stake.
Silver Beech Capital mentioned Citigroup Inc. (NYSE:C) in its third quarter 2023 investor letter. Here is what it said:
“Citigroup (“Citi”) is a large-capitalization global diversified financial services holding company that primarily serves multinational institutional and high net worth consumer clients. Citi is one of three large American banks to be designated in “bucket 3 or 4” of the “global systemically important bank” (“G-SIB”) framework by The Basel Committee on Banking Supervision. The other banks in this group are J.P. Morgan and Bank of America.
As a G-SIB, Citi is subjected to increased regulatory supervision by global bank regulators and central banks. Enhanced regulatory supervision was an important post-crisis reform to strengthen the global financial system by increasing bank capital ratios, transparency, and decreasing risk-taking. These reforms resulted in the largest G-SIBs moving away from risk-oriented banking activities such as advisory, high-yield lending, and trading, towards lower-risk activities. Indeed, Citi’s most valuable, high-growth segment, Treasury and Trade Solutions, is in lower-risk and entrenched activities such as liquidity and cash management, payments, trade solutions, and automated receivables processing. In our view, somewhat unintuitively, Citi’s increased regulatory supervision contributes to the company’s less risky banking business model, and thus its attractiveness as a downside-oriented investment opportunity.
Citi’s market perception suffers from the bank’s negative historical reputation. In 2008 during the Great Financial Crisis, Citi received the most TARP funding (the largest “bailout”) of the U.S. banks. TARP funding was provided by the U.S. government to forestall a liquidity problem that threatened to become a solvency problem. More recently, Citi mistakenly used its own capital to pay lenders when acting as Revlon’s loan agent, resulting in a $400M fine by the Federal Reserve and orders to resolve internal controls (which Citi fulfilled). Citi’s large global consumer bank was assembled by prior management in the early 2000s to attract and service high-end global consumers. Unfortunately, this pivot was costly and ill-timed in the context of increasingly complex multi-jurisdictional regulation to prevent money laundering and tax evasion. The global consumer bank has been a drag on Citi’s overall performance.
We believe the market dislikes Citi for these historical reasons and because Citi earns lower returns on equity (“ROE”) than its peers. In 2023, Citi has so far earned an ROE of ~7%, compared with peers that earn 10%+ ROEs. Recognizing that Citi is less valuable than its peers because it is a lower performance bank, we would argue that Citi’s valuation is still far too low. We believe the market is over-discounting Citi at its current valuation of ~0.48x tangible book value (“TBV”)…” (Click here to see the full text)
1. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders: 88
Share Price as of November 28: $30.31
Bank of America Corporation (NYSE:BAC) stands as a prominent American multinational investment bank and financial services holding company, headquartered at the Bank of America Corporate Center in Charlotte, North Carolina. Catering to a diverse clientele, including individual consumers, small and mid-sized businesses, institutional investors, large corporations, and governments globally, the bank offers a quarterly dividend of $0.24 per share, resulting in a dividend yield of 3.25% as of November 28.
By the end of Q3 2023, 88 out of the 910 hedge funds part of Insider Monkey’s database had invested in Bank of America Corporation (NYSE:BAC). Warren Buffett’s Berkshire Hathaway owned the biggest stake in the company due to its $28.2 billion investment.
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