In this article, we will take a look at the 5 best very cheap stocks to buy right now. To see more such companies, go directly to 15 Best Very Cheap Stocks to Buy Right Now.
5. Pfizer Inc. (NYSE:PFE)
Number of Hedge Fund Holders: 75
With a PE ratio of 7.29 as of April 25 and a solid pipeline, along with impressive dividend history, Pfizer Inc. (NYSE:PFE) remains one of the best very cheap stocks to buy. Pfizer Inc. (NYSE:PFE) is also highly popular among elite hedge funds tracked by Insider Monkey. As of the end of the fourth quarter of 2022, 75 hedge funds had stakes in Pfizer Inc. (NYSE:PFE). The most notable hedge fund stakeholders of Pfizer Inc. (NYSE:PFE) include Cliff Asness’s AQR Capital Management, D. E. Shaw’s D E Shaw and Ric Dillon’s Diamond Hill Capital.
4. The Cigna Group (NYSE:CI)
Number of Hedge Fund Holders: 76
Insurance company The Cigna Group (NYSE:CI) is one of the very cheap stocks to buy according to both analysts and hedge funds due to the company’s attractive valuation and long-term catalysts. Earlier this month, Raymond James upgraded The Cigna Group (NYSE:CI) to Strong Buy from Outperform. Raymond James kept its price target of $350 for the stock. Raymond James believes The Cigna Group (NYSE:CI) is positioned to have a strong 2023.
Baron Funds made the following comment about Cigna Corporation (NYSE:CI) in its Q4 2022 investor letter:
“We initiated a position in Cigna Corporation (NYSE:CI), a health services organization with two primary segments, Cigna Healthcare and Evernorth. Cigna Healthcare provides health insurance products, including a business in which Cigna provides administrative services only to plan sponsors (employers, unions, and other groups). Evernorth provides a portfolio of health care services, including pharmacy benefit management (PBM) services, care delivery services, data and analytics solutions, and distribution of specialty drugs. Each segment has a portion of business that provides steady, predictable growth. These foundational businesses, which account for roughly 60% of total revenue, include the U.S. commercial business, the PBM business, and international. The other 40% of revenue comes from higher-growth businesses, including the specialty pharmacy business, care delivery services, and Medicare Advantage. Management targets 10% to 13% annual EPS growth over the long term. The stock trades at a significant discount to industry peers because of the company’s commercial health insurance and PBM business mix. We think the PBM business will benefit from the biosimilar wave in the next few years, and as Cigna’s higher growth businesses become a bigger percentage of the overall mix, we think the stock can appreciate at least in line with its annual EPS growth with potential for valuation expansion.”
3. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 79
Over the past 12 months the shares of oil giant Exxon Mobil Corporation (NYSE:XOM) have gained about 43%. Yet Exxon Mobil Corporation (NYSE:XOM) has an attractive PE ratio and its solid dividend history makes it a tempting buy especially during the current economic volatility. Earlier this month Exxon Mobil Corporation (NYSE:XOM) was upgraded by UBS to Buy from Neutral. The firm also increased its price target for Exxon Mobil Corporation (NYSE:XOM) to $144 from $125. UBS believes Exxon Mobil Corporation (NYSE:XOM) is best positioned to benefit from the current upcycle because of strong balance sheet and a capital-efficient asset base.
2. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 82
While QUALCOMM Incorporated (NASDAQ:QCOM) sees a lot of volatility because of the cyclical nature of the semiconductor industry, the stock looks attractive for the long term. In March, Susquehanna upgraded QUALCOMM Incorporated (NASDAQ:QCOM), along with Intel and Skyworks, as the firm believe the semiconductor industry is past its bottom. Susquehanna upgraded QUALCOMM Incorporated (NASDAQ:QCOM) to Positive from Neutral.
In addition to growth catalysts, QUALCOMM Incorporated (NASDAQ:QCOM) is also a decent dividend stock. In March, QUALCOMM Incorporated (NASDAQ:QCOM) announced a 6.7% increase in its quarterly dividend. The increased dividend is payable in June.
A total of 82 hedge funds tracked by Insider Monkey had stakes in QUALCOMM Incorporated (NASDAQ:QCOM) as of the end of the fourth quarter of 2022. The most notable shareholder of QUALCOMM Incorporated (NASDAQ:QCOM) is David Goel and Paul Ferri’s Matrix Capital Management which owns a $367 million stake.
Madison Sustainable Equity Fund made the following comment about QUALCOMM Incorporated (NASDAQ:QCOM) in its Q1 2023 investor letter:
“QUALCOMM Incorporated (NASDAQ:QCOM) stock was volatile during the quarter but moved higher in March. Qualcomm fundamentals have been hurt over the last several quarters due to excess smartphone inventories. Management messaged in their recent conference call that inventory issues peaked in their first fiscal quarter and should begin to moderate. They are also seeing excess inventory in their IoT (Internet of Things) business, which will take a couple of quarters to work through. By our estimates, Qualcomm fundamentals should trough in the June quarter with a second-half recovery. Qualcomm remains well positioned to diversify away from smartphones with long-term growth in Auto and IoT.”
1. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 87
Semiconductor giant Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), which makes chips for some of the biggest tech companies in the world, including Apple, AMD and Nvidia, saw its shares under pressure recently after the company gave a weak Q2 revenue guidance. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) expects its second quarter revenue to be between $15.2 billion and $16 billion, below $18.16 billion posted in the same quarter last year.
Susquehanna analyst Mehdi Hosseini has upgraded Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) and increased his price target for TSM to $126 from $76, saying the worst-case scenario was already priced in. The analyst believes the launch of new products would help Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM).
Wedgewood Partners made the following comment about Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q1 2023 investor letter:
“Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) contributed to performance as revenues grew +27% (in USD) from the year ago quarter. Despite this strength, the Company’s customers have seen near-term weakness in demand due to Covid-19 normalization as well as the launch timing of new products. However, the Company is well-positioned to continue a long-term growth trajectory because its leading-edge capacity is being absorbed by high-performance computing applications, particularly at nontraditional integrated circuit (IC) design houses, such as Apple, Alphabet and Amazon, which have become IC-design powerhouses over the past decade. Importantly, the Company’s aggressive investment in leading-edge equipment, tight development with fabless IC designers, and embrace of open development libraries, should continue to foster a superior competitive position and attractive long-term growth.”
You can also take a peek at 10 Most Profitable Small Businesses in 2023 and 10 Best April Dividend Stocks To Buy.
