In this article we will take a look at the 5 best undervalued stocks to buy now. For a detailed analysis of these companies, go directly to the 10 Best Undervalued Stocks to Buy Now.
5. Companhia Siderúrgica Nacional (NYSE: SID)
Number of Hedge Fund Holders: 12
PE Ratio: 17.6
Companhia Siderúrgica Nacional (NYSE: SID) is a Brazil-based steel producer that is one of the largest such firms in South and Central America. Some of the products made and sold by the firm include flat steel, interstitial free slabs, hot-rolled products, galvanized products, and tin mill products. The firm also mines precious metals, including iron. It has a large export business as well. The firm was founded in 1941 and is ranked fifth on our list of 10 best undervalued stocks to buy now.
In February, Companhia Siderúrgica Nacional (NYSE: SID) announced that it would be raising steel prices by more than 25% in the second quarter of 2021 as part of a plan to reduce the firm’s debt. The rise in prices will benefit the firm as sales are expected to increase by almost 15% compared to the same period last year.
Out of the hedge funds being tracked by Insider Monkey, Boston-based firm Capital Growth Management is a leading shareholder in the firm with 4.8 million shares worth more than $28 million.
4. PulteGroup, Inc. (NYSE: PHM)
Number of Hedge Fund Holders: 40
PE Ratio: 11.3
PulteGroup, Inc. (NYSE: PHM) is a Georgia-based construction firm. The company primarily takes up home building ventures by acquiring and developing land for residential purposes. The firm makes several different types of houses, including single-family, townhouses, condominiums, and duplexes. The firm also arranges financing for home seekers, and presently controls more than 180,000 lots across the US. It was founded in 1960 and is placed fourth on our list of 10 best undervalued stocks to buy now.
PulteGroup, Inc. (NYSE: PHM) was named among the stocks to watch by real estate brokerage Redfin on March 28 amid a boom in competition for home ownership. Redfin detailed that low mortgage rates and a moving trend had been encouraged by remote working and led to an increase in the demand for houses.
At the end of the fourth quarter of 2020, 40 hedge funds in the database of Insider Monkey held stakes worth $1 billion in the firm, down from 43 in the preceding quarter worth $1.01 billion.
In one of their investor letters, Diamond Hill Capital highlighted a few stocks and PulteGroup Inc (NYSE:PHM) is one of them. Here is what Diamond Hill Capital said:
“Shares of homebuilder PulteGroup, Inc. declined, despite a strong start to the year. The company’s business is cyclical and as recession fears mounted due to the impact of COVID-19, the stock dropped precipitously.”
3. SLM Corporation (NYSE: SLM)
Number of Hedge Fund Holders: 19
PE Ratio: 6.2
SLM Corporation (NYSE: SLM) is a Delaware-based banking company. It was founded in 1972 and is ranked third on our list of 10 best undervalued stocks to buy now. Some of the services the firm offers include education loans, retail deposit accounts, money market deposit accounts, and high-yield savings accounts, among others. The company was named as New BLC Corporation but changed its name in December 2013.
On April 20, SLM Corporation (NYSE: SLM) released quarterly results stating that it had generated net interest income of $331 million and given out more than $3 billion in private education loans in the first three months of 2021. The firm also posted an earnings-per-share value of $1.77, beating estimates by a healthy $0.72.
Out of the hedge funds being tracked by Insider Monkey, California-based investment firm ValueAct Capital is a leading shareholder in the firm with 32.2 million shares worth more than $400 billion.
2. FirstEnergy Corp. (NYSE: FE)
Number of Hedge Fund Holders: 50
PE Ratio: 15
FirstEnergy Corp. (NYSE: FE) is an Ohio-based electric power company. The firm makes and distributes electricity in the states of Ohio, Pennsylvania, West Virginia, Maryland, New Jersey, and New York. The firm has more than 6 million customers and runs more than 24,000 miles of overhead and underground transmission lines. It was founded in 1996 and is placed second on our list of 10 best undervalued stocks to buy now. The firm also provides energy management services to select consumers.
FirstEnergy Corp. (NYSE: FE) reported quarterly results last week and posted a revenue of $2.7 billion, a 0.4% decrease from the same period last year. The earnings per share value stood at $0.69, beating estimates by $0.02. The firm said that it hoped to increase earnings to upto $315 million in the second quarter.
At the end of the fourth quarter of 2020, 50 hedge funds in the database of Insider Monkey held stakes worth $1.3 billion in the firm, down from 59 in the preceding quarter worth $1.2 billion.
In their Q3 2020 investor letter, Heartland Advisors highlighted a few stocks and FirstEnergy Corp (NYSE:FE) is one of them. Here is what Heartland Advisors said:
“The portfolio’s Utility names lagged on a relative basis with the shortfall stemming from a stock-specific issue in the group. FirstEnergy (FE) is a business we’ve owned in the past and sold out of after shares had appreciated following its successful transition to a pure regulated utility through the divestiture of its merchant power unit.
We initiated a new stake in FirstEnergy in March after shares sold off due to concerns that the recession would have an outsized impact on the company’s industrial-oriented client base. Similar to our successful experience in the past, we felt that the company was attractive given its meaningful discount to its peers.
Subsequent to our investment, FirstEnergy was named in an investigation related to $60 million of payments made by the merchant power entity to Ohio politicians. Our initial reaction when news broke was to reduce our exposure to the company, however, we continued our due diligence on the matter and believe that market reaction overestimated the likely fallout from the investigation.
As shares fell in price, we added to our position in the belief that as the matter proceeds, some of the clouds casting a shadow on the business will subside.”
1. Nucor Corporation (NYSE: NUE)
Number of Hedge Fund Holders: 29
PE Ratio: 15
Nucor Corporation (NYSE: NUE) is a North Carolina-based company that makes steel and steel-related products. The company is one of the largest steel makers in the United States and was founded in 1958. It is placed first on our list of 10 best undervalued stocks to buy now. Some of the products that the company makes and sells include electrical conduits, steel joists and joist girders, steel decks, fabricated concrete reinforcing steel, cold finished steel, steel fasteners, metal building systems, and steel grating, among others.
On April 20, Nucor Corporation (NYSE: NUE) stock was given an upgraded rating by the Bank of America as steel prices reached record highs in the US. The bank rated Nucor a Buy with a price target of $80, raised from $56 given earlier. According to the bank, the prices of steel had gone up due to production disruptions caused by COVID-19 but would soon stabilize.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm DE Shaw is a leading shareholder in the firm with 1 million shares worth more than $54 million.
You can also take a peek at 10 Best Travel Stocks to Buy Right Now, and 10 Best Automotive Stocks to Invest in Now.
