In this article, we discuss the 5 dirt cheap stocks to buy according to hedge funds. To read the detailed analysis of the current economic conditions and forecasts, go directly to the 12 Dirt Cheap Stocks To Buy According to Hedge Funds.
5. Cheniere Energy, Inc. (NYSE:LNG)
PE Ratio as of April 3: 3.89
Number of Hedge Fund Holders: 64
Cheniere Energy, Inc. (NYSE:LNG) is an oil and gas midstream company that is engaged in the ownership and operation of two natural gas liquefaction and export facilities and LNG and natural gas marketing. The company conducts its business through its various subsidiaries, including Cheniere Marketing, LLC, Cheniere Energy Partners, L.P. (NYSE:CQP), Cheniere Corpus Christi Pipeline, L.P., and others.
Cheniere Energy, Inc. (NYSE:LNG) is one of the top dirt cheap stocks to buy according to hedge funds, as 64 hedge funds held stakes in the stock in the fourth quarter of 2023, with positions worth $2.10 billion. As of December 31, 2023, Millennium Management is the most prominent shareholder in the company. The firm has increased its stake in the company by 175% to 2.338 million shares worth $399.17 million.
As of April 3, the stock has a PE ratio of 3.89. Based on 12 Wall Street analysts’ ratings in the last three months, Cheniere Energy, Inc. (NYSE:LNG) has a consensus rating of Strong Buy. The average price target of $201.08 implies an upside of 27.03% from the current levels as of April 3.
TimesSquare Capital Management stated the following regarding Cheniere Energy, Inc. (NYSE:LNG) in its fourth quarter 2023 investor letter:
“We often see the ebb and flow of the Energy sector tied to underlying commodity prices. In this area, we seek low-cost exploration & production companies with high-yielding acreage or specialized service providers. Cheniere Energy, Inc. (NYSE:LNG) operates liquefied natural gas terminals in Louisiana and Texas. Third quarter results were solid with lower than anticipated levels of expected capital expenditures, and management maintained full year guidance. Its shares edged forward by 3% on this report.”
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4. AT&T Inc. (NYSE:T)
PE Ratio as of April 3: 8.94
Number of Hedge Fund Holders: 66
AT&T Inc. (NYSE:T) is one of the largest wireless carriers in the U.S. and offers telecommunication and technology services, including Virtual Private Networks, AT&T Dedicated Internet, Ethernet, and more. According to the company’s website, its wireless network covers over 99% of Americans.
On March 29, AT&T Inc. (NYSE:T) announced a quarterly dividend of $0.277, payable by May 1 to the shareholders of record on April 10. As of April 3, the stock has a dividend yield of 6.30%. The stock has a PE ratio of 8.94 as of April 3.
Hedge fund sentiment was positive toward AT&T Inc. (NYSE:T) in Q4 of 2023 as hedge funds with investments in the stock were 66 in the quarter, with positions worth $3.905 billion. This is compared to 52 funds with positions worth $1.746 billion in the preceding quarter. Citadel Investment Group is the top investor in the company as of Q4 of 2023. In the quarter, the firm increased its stake by 139% to 50.767 million shares worth $851.867 million. Additionally, in Q4, Millennium Management also increased its position in the company by 530%, and its position is worth $380.127 million.
Miller Value Partners made the following comment about AT&T Inc. (NYSE:T) in its Q3 2023 investor letter:
“Our third-largest holding at quarter end was AT&T Inc. (NYSE:T), a leading provider of communications and connectivity services in the US. At $15/share, the stock trades at the same price it did almost thirty years ago. The share price is much less interesting to us in relation to where it has traded in the past than in relation to how much cash the company generates and what management is doing with it. At just over 6x earnings, the stock trades near its lowest price-to-earnings (P/E) multiple ever, also representing close to its largest-ever P/E discount to the stock market. The business converts most of its earnings to free cash flow, implying a forward free cash flow yield north of 15%. Just under half of free cash flow is going toward the dividend (7.5% yield), while much of the balance is going to debt paydown. In other words, if the stock does not fall below its lowest-ever valuation, investors clip a rock-solid 7.5% in cash, while owning a growing portion of a very steady business as management reduces debt outstanding. A discounted cash flow model will suggest that intrinsic value for shares begins with a “2,” suggesting the stock is undervalued on an absolute basis. The lack of volatility in the underlying fundamentals also makes it unique when compared to many other things we own, which reduces the probability of permanent capital impairment and argues for a significant weight in the portfolio.
AT&T looks particularly attractive when compared to some of the larger names dominating the S&P 500. Compare the stock to Apple, for instance, whose revenues and profits are likely to shrink this year, even as it trades at 29x this year’s earnings estimate. The ongoing return to rationality and capital accountability, along with extreme valuations in the megacap tech stocks, have us more excited about our portfolio’s prospects than we can remember for quite some time. As always, we remain the largest investors and welcome any questions or comments.”
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3. Charter Communications, Inc. (NASDAQ:CHTR)
PE Ratio as of April 3: 9.19
Number of Hedge Fund Holders: 69
Charter Communications, Inc. (NASDAQ:CHTR) is a Connecticut-based company that provides a host of services, including subscription-based internet, video, mobile, voice communications services, broadband communications solutions, and more. As per the company’s website, it serves 57 million homes in 41 states, has 7.8 million mobile lines in its network, and 30.6 million broadband internet customers.
The stock has a PE ratio of 9.19 as of April 3 and is a dirt cheap stock to buy according to hedge funds. On March 18, Bernstein analyst Laurent Yoon upgraded Charter Communications, Inc. (NASDAQ:CHTR) to Outperform from Market Perform rating and maintained a price target of $370.
Charter Communications, Inc. (NASDAQ:CHTR) was part of 69 hedge funds’ portfolios, and the total stake value was $5.358 billion in the fourth quarter of 2023. As of December 31, 2023, Harris Associates is the largest shareholder in the company and has a position worth $2.01 billion.
Weitz Investment Management mentioned Charter Communications, Inc. (NASDAQ:CHTR) in its Q3 2023 investor letter. Here is what it said:
“We swapped the Fund’s Liberty Broadband Corporation (NASDAQ:LBRDK) shares back to Charter Communications, Inc. (NASDAQ:CHTR) (Charter is by far Liberty Broadband’s largest asset), and the combined position was the most notable quarterly contributor. Investor sentiment around broadband’s competitive position became less negative, and the stocks rebounded nicely from what we considered oversold levels. ”
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2. General Motors Company (NYSE:GM)
PE Ratio as of April 3: 6.17
Number of Hedge Fund Holders: 83
General Motors Company (NYSE:GM) is a designer, manufacturer, and seller of automobiles and automobile parts. The company sells its vehicles under different brands, including Buick, Cadillac, Chevrolet, GMC, Baojun, and Wuling. The stock has a PE ratio of 6.17 as of April 3.
20 Wall Street analysts have covered General Motors Company (NYSE:GM) in the last three months, and 13 keep a Buy-equivalent rating on the stock. As of April 3, the average price target of $50.16 represents an upside of 11.05% from present levels.
On April 2, General Motors Company (NYSE:GM) unveiled its Q1 sales figures, which showed that the company delivered 594,233 vehicles in the U.S. in the quarter, and its retail sales went up by 6% year-over-year.
In the fourth quarter of 2023, hedge fund sentiment was positive toward General Motors Company (NYSE:GM), which is why it is the 2nd dirt cheap stock to buy according to hedge funds. In the quarter, 83 hedge funds held positions in the company, and their stakes amounted to $3.929 billion. This is compared to 66 funds in the third quarter, with positions worth $2.033 billion. As of December 31, 2023, Harris Associates is the most dominant shareholder in the company and has a position worth $1.284 billion.
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1. Berkshire Hathaway Inc. (NYSE:BRK-B)
PE Ratio as of April 3: 9.49
Number of Hedge Fund Holders: 117
Berkshire Hathaway Inc. (NYSE:BRK-B), through its many subsidiaries, runs different types of businesses, including insurance, freight rail transportation, and utility.
According to Insider Monkey’s database that tracks 933 elite hedge funds, 117 hedge funds held stakes in Berkshire Hathaway Inc. (NYSE:BRK-B) in the fourth quarter of 2023, with positions worth $15.103 billion.
Berkshire Hathaway Inc. (NYSE:BRK-B) tops our list of dirt cheap stocks to buy according to hedge funds and has a PE ratio of 9.49 as of April 3.
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Disclosure: None. You can also look at the 15 Fastest Growing African Economies in 2024 and Wall Street Analysts See Upside Potential for 10 Stocks with Rising Price Targets.
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