5 Most Undervalued NASDAQ Stocks To Buy According To Hedge Funds

In this article, we discuss 5 most undervalued NASDAQ stocks to buy according to hedge funds. If you want to see more stocks in this selection, 15 Most Undervalued NASDAQ Stocks To Buy According To Hedge Funds. 

5. Moderna, Inc. (NASDAQ:MRNA)

Number of Hedge Fund Holders: 44

P/E Ratio as of January 24: 6.97

Moderna, Inc. (NASDAQ:MRNA) is an American pharmaceutical and biotechnology company that discovers, develops, and commercializes messenger RNA therapeutics and vaccines for infectious diseases, immuno-oncology, rare diseases, cardiovascular diseases, and auto-immune diseases in the United States, Europe, and internationally. On January 4, Moderna, Inc. (NASDAQ:MRNA) announced its acquisition of OriCiro Genomics, a Tokyo-based company that specializes in cell-free synthesis and amplification of plasmid DNAs. The acquisition is intended to strengthen Moderna, Inc. (NASDAQ:MRNA)’s mRNA manufacturing capabilities. It is one of the most undervalued NASDAQ stocks to invest in according to hedge funds.

On January 18, Chardan analyst Geulah Livshits raised the price target on Moderna, Inc. (NASDAQ:MRNA) from $191 to $208, and maintained a Neutral rating on the company’s shares. This update comes after Moderna, Inc. (NASDAQ:MRNA) announced that its respiratory syncytial virus (RSV) vaccine, mRNA-1345, met primary efficacy endpoints in an interim analysis of the phase III ConquerRSV trial in older adults. This suggests that the vaccine could be effective in preventing RSV in older adults.

According to Insider Monkey’s data, 44 hedge funds were long Moderna, Inc. (NASDAQ:MRNA) at the end of Q3 2022, compared to 45 funds in the prior quarter. Patrick Degorce’s Theleme Partners is the largest stakeholder of the company, with 6 million shares worth $710 million. 

Here is what Baron Funds said about Moderna, Inc. (NASDAQ:MRNA) in its Q3 2022 investor letter:

“Within biotechnology, underperformance of Moderna, Inc. (NASDAQ:MRNA) and lower exposure to this better performing sub-industry weighed the most on relative performance. Shares of Moderna, a leader in the emerging field of mRNA-based vaccines and therapeutics, declined due to increasing uncertainty around what a booster market could look like as COVID shifts away from pandemic status and becomes an increasingly commercial market rather than government funded.”

4. APA Corporation (NASDAQ:APA)

Number of Hedge Fund Holders: 47

P/E Ratio as of January 24: 4.29

APA Corporation (NASDAQ:APA) is a Texas-based company that explores for, develops, and produces oil and gas properties. It has operations in the United States, Egypt, and the United Kingdom. APA Corporation (NASDAQ:APA) is one of the most undervalued NASDAQ stocks to consider. On December 14, the company declared a $0.25 per share quarterly dividend, in line with previous. The dividend is distributable on February 22, to shareholders of record on January 23. 

On January 19, Truist analyst Neal Dingmann maintained a Buy recommendation on APA Corporation (NASDAQ:APA) but lowered his price target on the shares from $69 to $63. The analyst noted that the company’s Q4 pre-announcement was relatively negative, with slightly worse-than-expected prices and expenses. He also warned that APA Corporation (NASDAQ:APA) could encounter an even larger relative international stumble. Despite this, he still believes that the company’s 2023 should be largely on track and a continued sizable shareholder return program is expected.

According to Insider Monkey’s third quarter database, APA Corporation (NASDAQ:APA) was part of 47 hedge fund portfolios, compared to 36 in the prior quarter. Harris Associates is the largest stakeholder of the company, with 13.35 million shares worth $456.5 million. 

Here is what Oakmark Select Fund has to say about APA Corporation (NASDAQ:APA) in its Q1 2022 investor letter:

“Our oil holding, APA Corporation (NASDAQ:APA) (+54%) was one of our top contributors in the quarter as oil prices rallied due to tight supplies, which were then exacerbated by the Russian invasion of Ukraine. Although their share prices have increased considerably, both companies still look quite undervalued even using longer term oil prices in the $65-70 dollar range. Meanwhile, if times are good over the next couple of years, we expect these companies to return significant percentages of their market caps to shareholders.”

3. Diamondback Energy, Inc. (NASDAQ:FANG)

Number of Hedge Fund Holders: 55

P/E Ratio as of January 24: 6.06

Diamondback Energy, Inc. (NASDAQ:FANG) was founded in 2007 and is headquartered in Midland, Texas. It is an independent E&P firm that specializes in acquiring, developing, exploring and extracting unconventional and onshore oil and natural gas reserves in the Permian Basin in West Texas. Diamondback Energy, Inc. (NASDAQ:FANG) is one of the most undervalued NASDAQ stocks to monitor. 

On January 23, Barclays analyst Jeanine Wai maintained an Overweight rating on Diamondback Energy, Inc. (NASDAQ:FANG) but lowered the price target on the shares from $173 to $166. The analyst expects a weaker Q4 performance for the integrated oil and exploration and production sector compared to Q3. However, she noted that the main factors for the sector’s investment thesis are capital discipline and cash returns, which support a positive outlook.

According to Insider Monkey’s third quarter database, 55 hedge funds were long Diamondback Energy, Inc. (NASDAQ:FANG), compared to 54 funds in the preceding quarter. Donald Yacktman’s Yacktman Asset Management is the largest stakeholder of the company, with 1.26 million shares worth $152 million. 

In its Q1 2021 investor letter, Miller Value Partners, an asset management firm, highlighted a few stocks and Diamondback Energy, Inc. (NASDAQ:FANG) was one of them. Here is what the fund said:

“Diamondback Energy (FANG) returned 14.4% in the quarter as the oil price rose and fell during the quarter ending the period largely in the same place that it started. The company reported strong 3Q results beating on the top and bottom lines. The company reported revenue of $1.9B beating the consensus of $1.5B with EPS of $2.94 beating expectations for $2.79. The beat was driven by a combination of higher volumes, higher realizations, and efficiency gains. The company increased its total production guidance for the year to 370-372 mboe/d1 (up from 363-370 mboe/d) while lowering Capital Expenditure (CAPEX) guidance for the second time this year to $1.49-1.53B. The company raised the dividend for the third time this year to $2/share annually while authorizing a new $2B share repurchase program. Starting in 4Q21, the company plans to return 50% of Free Cash Flow to shareholders through the base dividend and a combination of buybacks and special dividends. Finally, the CEO Travis Stice announced plans to reduce methane emissions by 70% as part of the firm’s ESG initiative.”

2. Intel Corporation (NASDAQ:INTC)

Number of Hedge Fund Holders: 69

P/E Ratio as of January 24: 9.37

Intel Corporation (NASDAQ:INTC) is a California-based company specializing in the design, manufacture, and sale of computer products and technologies worldwide. It is one of the most undervalued NASDAQ stocks to invest in. On January 24, Truist analyst William Stein raised the firm’s price target on Intel Corporation (NASDAQ:INTC) to $33 from $29 and assigned a Hold rating to the shares. The decision was made as part of a broader research note with a more positive outlook for semiconductor and AI companies. 

According to Insider Monkey’s third quarter database, 69 hedge funds were long Intel Corporation (NASDAQ:INTC), compared to 65 funds in the preceding quarter. John Overdeck and David Siegel’s Two Sigma Advisors is a leading stakeholder in the company, with more than 15 million shares worth $390.5 million. 

ClearBridge Investments made the following comment about Intel Corporation (NASDAQ:INTC) in its Q3 2022 investor letter:

“Also on the detractor side, Intel Corporation (NASDAQ:INTC) delivered a disappointing revenue miss and lowered full-year revenue and earnings guidance as COVID-19-driven demand for PCs abated (where Intel enjoys half its sales) and a delay in its flagship Sapphire Rapids CPU hurt its data center business. Despite these issues, we still believe Intel is an economically sensitive turnaround story with substantial upside.”

1. Chesapeake Energy Corporation (NASDAQ:CHK)

Number of Hedge Fund Holders: 70

P/E Ratio as of January 24: 5.61

Chesapeake Energy Corporation (NASDAQ:CHK) is an Oklahoma-based independent exploration and production company, focused on the acquisition, exploration, and development of properties for the production of oil, natural gas, and natural gas liquids from underground reservoirs in the United States. On January 19, Credit Suisse analyst William Janela reiterated an Outperform rating on Chesapeake Energy Corporation (NASDAQ:CHK) and lowered the firm’s price target on the shares to $130 from $135 after the company announced it will sell its Eagle Ford Brazos Valley assets for $1.425 billion in cash. 

According to Insider Monkey’s data, 70 hedge funds were long Chesapeake Energy Corporation (NASDAQ:CHK) at the end of Q3 2022, compared to 67 funds in the last quarter. Howard Marks’ Oaktree Capital Management is the leading position holder in the company, with 9.80 million shares worth $923.25 million. 

Carillon Tower Advisers made the following comment about Chesapeake Energy Corporation (NASDAQ:CHK) in its Q3 2022 investor letter:

“Chesapeake Energy Corporation (NASDAQ:CHK), a natural gas exploration and production company, emerged from bankruptcy with little fanfare in 2021, despite having rid itself of its debt burden and onerous pipeline contracts. The company was able to make two large acquisitions at very reasonable prices within its core producing areas, allowing for scale and cost savings. Then in 2022, natural gas prices began to rise well above expectations, increasing the value of Chesapeake’s large natural gas resources and production and contributing to its outperformance.”

Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily enewsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also check out 15 Biggest Natural Gas Pipeline Companies in the World and 25 Largest Privately Held Companies in the US.