5 Best Undervalued Stocks According to Hedge Funds

3. Wells Fargo & Company (NYSE:WFC) 

Number of Hedge Fund Holders: 94

PE Ratio: 11.24

Wells Fargo & Company (NYSE:WFC) is a diversified financial services firm. Hedge funds have been loading up on the stock in recent months. At the end of the fourth quarter of 2021, 94 hedge funds in the database of Insider Monkey held stakes worth $6.11 billion in Wells Fargo & Company (NYSE:WFC), compared to 88 the preceding quarter worth $6.18 billion.

Wells Fargo & Company (NYSE:WFC) has embarked on an ambitious plan recently to reduce expenses. The fourth quarter results of the firm indicate that the company has been successful in cutting costs and generating a gain from asset sales. Amid rising interest rates, deposits and lending at the bank have also increased. 

In its Q4 2020 investor letter, Davis Funds, an asset management firm, highlighted a few stocks and Wells Fargo & Company (NYSE:WFC) was one of them. Here is what the fund said:

“Detractors to performance relative to the index include financial services holdings such as Wells Fargo. While banks in general have suffered due to the recession and experienced credit losses, Wells Fargo also suffered from operational missteps. It is our expectation, however, that our bank holdings in general will benefit from stronger economic growth as the pandemic recedes; and we believe Wells Fargo in particular, will, over time, lower their costs and successfully grow their businesses.”