In this article, we will take a look at the 13 cheap stocks to buy today according to media.
Constant bombardment of news and making decisions based on day to day market updates gives a false sense of knowledge which often distracts investors and distorts their long-term outlook. When we examine the investment philosophies of those who made it while investing in the stock market, we notice a common theme: successful investors and billionaires don’t give in to the temporary pressures and keep their horizons vast and outlook wide.
For example, Stanley Druckenmiller, one of the most famous hedge funds and billionaires, often talks in detail about his journey in the investing world. There was a time he used to spend hours and hours analyzing a stock based on its fundamentals and then present his research report to his bosses. But Druck learned a lesson: he has to look at the factors that actually cause a stock price go up or down. Druckenmiller said many investors, even the experienced ones, don’t have a clue what makes their stocks rise and fall.
Staying disconnected from the short-term news cycle does not mean at all that you don’t pay attention to the important market forces at work. For example, the Federal Reserve is currently in a wait and see more when it comes to inflation. The central bank controls the most important lever in the economic system: credit/money. Coincidentally, Druckenmiller has been extremely vocal about the importance of liquidity and he’s been talking about the importance of paying attention to the central bank’s moves for years. Druckenmiller once said:
“The major thing we look at is liquidity, meaning as a combination of an economic overview. Contrary to what a lot of the financial press has stated, looking at the great bull markets of this century, the best environment for stocks is a very dull, slow economy that the Federal Reserve is trying to get going… Once an economy reaches a certain level of acceleration… the Fed is no longer with you… The Fed, instead of trying to get the economy moving, reverts to acting like the central bankers they are and starts worrying about inflation and things getting too hot. So it tries to cool things off… shrinking liquidity… [While at the same time] The corporations start having to build inventory, which again takes money out of the financial assets… finally, if things get really heated, companies start engaging in capital spending… All three of these things, tend to shrink the overall money available for investing in stocks and stock prices go down…”
In this backdrop, it’s important to see which stocks are currently cheap and have the potential to rebound once the economy comes out of the volatility and uncertainty.
Our Methodology
For this article we consulted at least 10 mainstream and credible financial news media outlets and compiled a list of stocks that were repeatedly labeled as cheap and undervalued by financial news media.
Cheap Stocks to Buy Today According to Media
13. Kinross Gold Corporation (NYSE:KGC)
Number of Hedge Fund Holders: 26
Several media outlets we consulted believe Kinross Gold Corporation (NYSE:KGC) is an undervalued stock. In August Kinross Gold Corporation (NYSE:KGC) posted second quarter results. Adjusted EPS in the quarter came in at $0.14, beating estimates by $0.05. Revenue in the quarter jumped 32.7% year over year to $1.09 billion, surpassing estimates by $80 million.
As of the end of the second quarter, 26 hedge funds out of the 910 funds tracked by Insider Monkey reported owning stakes in Kinross Gold Corporation (NYSE:KGC).
12. Snap Inc. (NYSE:SNAP)
Number of Hedge Fund Holders: 29
Dan Ives of Wedbush Securities in August said that Snap Inc. (NYSE:SNAP)’s performance has been weak over the past few months amid growth concerns but he believes this weakness could be temporary. Goldman Sachs also named Snap Inc. (NYSE:SNAP) among its list of stocks that could see potential growth catalysts in the coming months. Snap Inc. (NYSE:SNAP) will announce Q3 results in October and analysts will be watching the company’s AI-related progress or announcements.
A total of 29 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Snap Inc. (NYSE:SNAP) as of the end of the June quarter.
Here is what RiverPark Large Growth Fund has to say about Snap Inc. (NYSE:SNAP) in its Q3 2022 investor letter:
“SNAP shares were our top detractor for the quarter on its July decline from weaker revenue growth relative to guidance (which had been reduced in May) and the fact that management did not provide an outlook for 3Q. Shares subsequently rebounded somewhat as the company announced better-than-expected near-term revenue growth, while announcing a broadbased cost restructuring.
Although the company continues to face near-term macro headwinds and difficult year-over-year comparisons from COVID-fueled quarters last year, we believe SNAP can reaccelerate its revenue growth to greater than 20% annually over the next several years. With TTM revenue of $4.5 billion (as compared with Meta’s $120 billion), 347 million daily average users (about 1/10 of Meta’s), and $14 TTM ARPU (about 1/3 of Meta’s), we believe SNAP has a long runway for both revenue growth and expanded profitability as it improves its platform functionality, continues to grow its audience (daily active users continue to grow at a double-digit rate), and expands its monetization.”
11. Campbell Soup Company (NYSE:CPB)
Number of Hedge Fund Holders: 29
Campbell Soup Company (NYSE:CPB)’s PE ratio as of September 20 stands at 14.85.
A total of 29 hedge funds in Insider Monkey’s database of 910 hedge funds were long Campbell Soup Company (NYSE:CPB). The biggest stakeholder of Campbell Soup Company (NYSE:CPB) during this period was Ken Griffin’s Citadel Investment Group which owns a stake worth over $90 million.
In its fiscal Q4 earnings call Campbell Soup Company (NYSE:CPB)’s management talked about future expectations and said:
“As we think about the phasing for the year, we expect the first quarter adjusted earnings growth rate to be the lowest of the year due to the concentration of higher inflation, increased marketing and selling expenses, the highest quarter impact from lower pension income and some costs related to a nonmaterial cyber incident. As you know, we don’t provide quarterly guidance. Given the unique dynamics in Q1, however, we expect first quarter adjusted EPS likely in the upper $0.80 range with momentum building as the year progresses. As I wrap up guidance, capital expenditures are expected to be approximately 4.7% of net sales. Our priorities for fiscal 2024 include select capacity expansion projects, including the recently announced Goldfish investment, our headquarter consolidation and other programs to support our Snacks margin improvement plan as well as important IT and productivity investments.”
Read the full earnings call transcript here.
10. Wingstop Inc. (NASDAQ:WING)
Number of Hedge Fund Holders: 31
Restaurant chain company Wingstop Inc. (NASDAQ:WING) ranks 10th in our list of the cheap stocks to buy today according to media. TD Cowen called Wingstop Inc. (NASDAQ:WING) its top SMID (small and mid-cap) pick after the company posted strong Q2 results.
Cowen praised Wingstop Inc. (NASDAQ:WING)’s 98% franchised business model with operational simplicity and robust “omni-channel” digital penetration for pick-up and third-party delivery. Cowen’s analyst Andrew Charles said he’s “excited” about Wingstop Inc. (NASDAQ:WING)’s ability to reach a target of $2 million AUV in 20206.
As of the end of the second quarter of 2023, 31 hedge funds in Insider Monkeys database of funds had stakes in Wingstop Inc. (NASDAQ:WING).
Carillon Eagle Small Cap Growth Fund made the following comment about Wingstop Inc. (NASDAQ:WING) in its first quarter 2023 investor letter:
“Wingstop Inc. (NASDAQ:WING) is a franchisor and restaurant operator that specializes in cooked-to order chicken wings in a fast-casual setting. The stock performed well, driven by continued quarterly results in excess of Wall Street expectations. Wingstop continues to benefit from its new chicken sandwich, a new relationship with a leading food delivery service, and chicken wing input costs that are moderating.”
9. Paylocity Holding Corporation (NASDAQ:PCTY)
Number of Hedge Fund Holders: 34
Human capital management and payroll software solutions company Paylocity Holding Corporation (NASDAQ:PCTY) ranks 9th in our list of the cheap stocks to buy according to media. In August Paylocity Holding Corporation (NASDAQ:PCTY) posted fiscal Q4 results, beating estimates on both EPS and revenue. Adjusted EPS in the period came in at $1.32 beating estimates by $0.19. Revenue in the quarter jumped 35% year over year to $308.5 million, beating estimates by $6.94 million.
As of the end of the second quarter of 2023, 34 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Paylocity Holding Corporation (NASDAQ:PCTY). The biggest stakeholder of Paylocity Holding Corporation (NASDAQ:PCTY) was Greg Poole’s Echo Street Capital Management which had a $171 million stake in the company.
TimesSquare U.S. Small/Mid Cap Growth Strategy made the following comment about Paylocity Holding Corporation (NASDAQ:PCTY) in its Q4 2022 investor letter:
“Some industry influences in the Information Technology sector weighed on our relative performance, such as the market preference for hardware over software. That included this quarter’s greatest detractor, Paylocity Holding Corporation (NASDAQ:PCTY). A provider of cloud-based payroll and human capital management software for medium-sized organizations, Paylocity reported revenues, earnings, and forward guidance that were higher than anticipated. The company won new clients, which combined with cross selling and higher employment levels at existing clients added to Paylocity’s growth. However, it seemed that Paylocity was caught by negative market sentiment for either employment-related stocks or high growth software, and its shares retreated by -19%. That was counter to our view on its fundamentals, so we added to Paylocity on that weakness.”
8. VICI Properties Inc. (NYSE:VICI)
Number of Hedge Fund Holders: 40
VICI Properties Inc. (NYSE:VICI) is a high-yield dividend stock in our list of cheap stocks to buy now according to the media. VICI Properties Inc. (NYSE:VICI) recently announced a 6.4% increase in its quarterly dividend.
As of the end of the second quarter of 2023, 40 hedge funds out of the 910 funds tracked by Insider Monkey were long VICI Properties Inc. (NYSE:VICI). The biggest stakeholder of VICI Properties Inc. (NYSE:VICI) during this period was Ken Griffin’s Citadel Investment Group which owns a $164 million stake in the company.
Baron Real Estate Income Fund made the following comment about VICI Properties Inc. (NYSE:VICI) in its Q4 2022 investor letter:
“We remain optimistic about the Fund’s triple net gaming REIT investments in VICI Properties Inc. (NYSE:VICI) and Gaming and Leisure Properties, Inc. The companies primarily own quality casino and gaming real estate properties. They have attractive dividend yields in the 5% to 6% range that are well covered, accretive acquisition growth opportunities, and are, in our opinion, attractively valued.
We remain mindful of the rising interest rate environment and the possibility that higher debt costs and lower equity prices could negatively impact the ability for net lease REITs to invest in an accretive fashion.”
7. Tapestry, Inc. (NYSE:TPR)
Number of Hedge Fund Holders: 40
Luxury fashion brands company Tapestry, Inc. (NYSE:TPR) has a PE ratio of 7.79 as of September 20. In August Tapestry, Inc. (NYSE:TPR) upped its quarterly dividend by a whopping 16.7%.
As of the end of the second quarter of 2023, 40 hedge funds out of the 910 hedge funds tracked by Insider Monkey were long Tapestry, Inc. (NYSE:TPR).
6. EQT Corporation (NYSE:EQT)
Number of Hedge Fund Holders: 51
Energy company EQT Corporation (NYSE:EQT) ranks 6th in our list of the cheap stocks to buy according to the media. However, recently, Scotiabank downgraded EQT Corporation (NYSE:EQT) to Sector Perform.
As of the end of the second quarter of 2023, 51 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in EQT Corporation (NYSE:EQT).
5. MSCI Inc. (NYSE:MSCI)
Number of Hedge Fund Holders: 51
Finance company MSCI Inc. (NYSE:MSCI) ranks 5th in our list of the cheap stocks to buy according to the media. Recently, Argus started covering MSCI Inc. (NYSE:MSCI) with a Buy rating. Among the catalysts for MSCI Inc. (NYSE:MSCI) according to Argus include the rise of passive investing, ESG and climate-based investing in developed and emerging economies.
Out of the 910 hedge funds in Insider Monkey’s database, 51 hedge funds had stakes in MSCI Inc. (NYSE:MSCI) as of the end of the second quarter. The biggest stakeholder of MSCI Inc. (NYSE:MSCI) was Henry Ellenbogen’s Durable Capital Partners which owns a $318 million stake in the company.
Here is what Carillon Eagle Mid Cap Growth Fund has to say about MSCI Inc. (NYSE:MSCI) in its Q2 2023 investor letter:
“MSCI provides investment decision support tools to investment institutions worldwide. The stock underperformed in the period as investors focused on the sales slowdown of MSCI’s environmental, social, and governance (ESG) and climate-related business. While we expect this business unit to continue to slow from very high growth rates, we remain comfortable with the strength of the overall MSCI franchise.”
4. D.R. Horton, Inc. (NYSE:DHI)
Number of Hedge Fund Holders: 54
D.R. Horton, Inc. (NYSE:DHI) earlier this year upped its Q3 earnings guidance, driven by a shortage of houses in the US that is causing demand to surge. During the company’s Q2 earnings call D.R. Horton, Inc. (NYSE:DHI) management talked about its outlook:
“For the full year, we currently expect to close between 82,800 and 83,300 homes in our homebuilding operations and between 6,500 and 7,000 homes and units in our rental operations. We expect our consolidated revenues for fiscal 2023 to be in a range of $34.7 billion to $35.1 billion. We expect to generate greater than $3 billion of cash flow from operations in fiscal 2023, primarily from our homebuilding operations. We also expect our fiscal 2023 share repurchases to be approximately $1.1 billion, similar to last year.
For the fourth quarter, we currently expect to generate consolidated revenues of $9.7 billion to $10.1 billion, and homes closed by our homebuilding operations to be in the range of 22,800 to 23,300 homes. We expect our home sales gross margin in the fourth quarter to be approximately 23.5% to 24%, and homebuilding SG&A as a percentage of revenues in the fourth quarter to be in the range of 6.7% to 6.8%. We anticipate our financial services pre-tax profit margin of around 30% to 35%, and we expect our income tax rate to be approximately 24.5% in the fourth quarter. We will continue to balance our cash flow utilization priorities among our core homebuilding operations, our rental operations, maintaining conservative homebuilding leverage and strong liquidity, paying an increased dividend and consistently repurchasing shares.”
Read the full earnings call transcript here.
Baron Real Estate Fund made the following comment about D.R. Horton, Inc. (NYSE:DHI) in its second quarter 2023 investor letter:
“Our investments in homebuilder companies – Toll Brothers, Inc., Lennar Corporation, and D.R. Horton, Inc. (NYSE:DHI) – performed well in the first six months of 2023. The share price of Toll Brothers increased nearly 60% and the shares prices of Lennar and D.R. Horton each gained more than 35%.
Year-to-date, each company has witnessed a meaningful uptick in demand to buy homes:
- Home buyers continue to come off the sidelines and buy homes despite 30-year mortgage rates remaining in the 6.5% to 7.0% range. Several factors are contributing to the recent strength, including pent-up demand to buy homes and fears that mortgage rates could move higher. • The sticker shock of rapidly rising mortgage rates appears to have cooled down. Homebuilders have made homes more affordable to prospective home purchasers by offering mortgage rate buydowns to the mid-5% mortgage rate range while maintaining strong profitability margins. • A dearth of inventory in the existing home market and an overall housing supply shortage is driving home buyers to “stretch their wallet” due to fears that they could miss the opportunity to buy a home.
We remain optimistic about the long-term potential for the Fund’s investments in Toll Brothers, Lennar, and D.R. Horton for several reasons…” (Click here to read the full text)
3. Expedia Group, Inc. (NASDAQ:EXPE)
Number of Hedge Fund Holders: 57
Morgan Stanley in August named Expedia Group, Inc. (NASDAQ:EXPE) among its list of stocks that could see potential AI catalysts in the coming months. Expedia Group, Inc. (NASDAQ:EXPE) could announce generative AI features integration with its platform later this year.
As of the end of the second quarter 57 hedge funds out of the 910 hedge funds tracked by Insider Monkey reported owning stakes in Expedia Group, Inc. (NASDAQ:EXPE).
Aristotle Atlantic Core Equity Strategy made the following comment about Expedia Group, Inc. (NASDAQ:EXPE) in its first quarter 2023 investor letter:
“Expedia Group, Inc. (NASDAQ:EXPE) provides online travel services for leisure and small business travelers. The company offers a wide range of travel shopping and reservation services, as well as provides real-time access to schedule, pricing and availability information for airlines, hotels and car rental companies. Expedia serves customers worldwide.
We see Expedia benefiting from the growth of booking travel online, both for leisure and in corporate travel. The company also benefits from rapid growth in alternative accommodations, vacation home rental, through VRBO. The main sources of revenue and profitability are from hotel and vacation home rental. Additionally Expedia has exposure to airline ticket sales and automobile rentals. Post the COVID-19 pandemic, Expedia’s debt has been reduced and share repurchase has resumed and we would expect a dividend to be reinstated.”
2. Wells Fargo & Company (NYSE:WFC)
Number of Hedge Fund Holders: 75
Wells Fargo & Company (NYSE:WFC) is one of the top cheap stocks to buy today according to media. Wells Fargo & Company (NYSE:WFC)’s PE ratio as of September 20 stands at 10.7. HSBC recently started covering Wells Fargo & Company (NYSE:WFC) with a Hold rating. A latest Reuters report said, quoting CFO Mike Santomassimo, that Wells Fargo & Company (NYSE:WFC) is expected to continue its layoff spree to cut costs and increase efficiency.
As of the end of the second quarter of 2023, 75 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Wells Fargo & Company (NYSE:WFC) as of the end of the June quarter.
Here is what Tweedy, Browne has to say about Wells Fargo & Company (NYSE:WFC) in its Q1 2023 investor letter:
“The Funds received very little in the way of return contributions from many of their financial, energy, media, and healthcare holdings. While it would appear that a crisis was avoided by the quick intervention of bank regulators in the US and Switzerland, some uneasiness still remains in the global banking community. This turmoil couldn’t help but have a negative impact on investor sentiment and in turn on Fund bank holdings such as Wells Fargo (NYSE:WFC).”
1. Citigroup Inc. (NYSE:C)
Number of Hedge Fund Holders: 75
With a PE ratio of 6.77 Citigroup Inc. (NYSE:C) is another banking stock that is considered cheap and undervalued by the media.
As of the end of the second quarter of 2023, 75 hedge funds out of the 910 funds tracked by Insider Monkey were long Citigroup Inc. (NYSE:C). The biggest stakeholder of Citigroup Inc. (NYSE:C) was Warren Buffett’s Berkshire Hathaway which owns a $2.5 billion stake in the company.
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Disclosure: None. 13 Cheap Stocks to Buy Today According to Media is originally published on Insider Monkey.
