In this article, we will take a look at the 5 most undervalued penny stocks to buy according to hedge funds. To see more such companies, go directly to 13 Most Undervalued Penny Stocks To Buy According To Hedge Funds.
5. Solid Power, Inc. (NASDAQ:SLDP)
Number of Hedge Fund Holders: 15
Solid Power, Inc. (NASDAQ:SLDP) is operating in the high-growth and lucrative battery industry. Solid Power, Inc. (NASDAQ:SLDP) has gained about 53% year to date. It has a PE ratio of 2.13. Of the 920 hedge funds in Insider Monkey’s database as of the end of the third quarter, 15 hedge funds had stakes in Solid Power, Inc. (NASDAQ:SLDP). The biggest stakeholder of Solid Power, Inc. (NASDAQ:SLDP) during the period was Ken Griffin’s Citadel Investment Group which owns a $3.6 million stake.
In December, the stock rose after Solid Power, Inc. (NASDAQ:SLDP) said it will expand its joint development agreement with BMW Group. According to the deal, Solid Power, Inc. (NASDAQ:SLDP) will give BMW an R&D license for its all-solid-state cell design and manufacturing technology.
4. Organogenesis Holdings Inc. (NASDAQ:ORGO)
Number of Hedge Fund Holders: 15
Organogenesis Holdings Inc. (NASDAQ:ORGO) is a regenerative medicine company. Organogenesis Holdings Inc. (NASDAQ:ORGO) has gained about 7% year to date in 2023. Organogenesis Holdings Inc. (NASDAQ:ORGO) has a PE ratio of 6.14 as of February 5. As of the end of the third quarter of 2022, 15 hedge funds out of the 920 funds tracked by Insider Monkey had stakes in Organogenesis Holdings Inc. (NASDAQ:ORGO). The most significant hedge fund stakeholder in this period was Guy Levy’s Soleus Capital $21 million. The second most significant stakeholder in Organogenesis Holdings Inc. (NASDAQ:ORGO) was Israel Englander’s Millennium Management, with over $4.8 million stake.
3. UWM Holdings Corporation (NYSE:UWMC)
Number of Hedge Fund Holders: 17
UWM Holdings Corporation (NYSE:UWMC) is a Michigan-based mortgage lending company. With a PE ratio of 8.64 as of February 5, it is one of the most undervalued penny stocks to buy according to hedge funds. Of the 920 funds tracked by Insider Monkey as of the end of the third quarter of 2022, 17 hedge funds had stakes in UWM Holdings Corporation (NYSE:UWMC). The net worth of these stakes was $13.4 million. Amid the current headwinds in the market driven by mortgage market uncertainty, UWM Holdings Corporation (NYSE:UWMC) could face short-term turbulence. However, UWM Holdings Corporation (NYSE:UWMC) is a solid dividend payer with a high yield. UWM Holdings Corporation (NYSE:UWMC)’s dividend yield stands at over 8% as of February 5.
2. Vacasa, Inc. (NASDAQ:VCSA)
Number of Hedge Fund Holders: 17
Vacasa, Inc. (NASDAQ:VCSA) is a vacation rental management platform company. Vacasa, Inc. (NASDAQ:VCSA) has lost about 68% in value over the past year, as of February 5. At the end of the September quarter of 2022, 17 hedge funds reported owning stakes in Vacasa, Inc. (NASDAQ:VCSA). The net worth of these stakes was about $304 million. The biggest stakeholder of Vacasa, Inc. (NASDAQ:VCSA) was Jim Davidson, Dave Roux, and Glenn Hutchins’s Silver Lake Partners, which had a $192 million stake in the firm. The second biggest stakeholder in Vacasa, Inc. (NASDAQ:VCSA) during the same period was Jeffrey Diehl’s Adams Street Partners which has a $51 million stake in the firm.
1. MultiPlan Corporation (NYSE:MPLN)
Number of Hedge Fund Holders: 24
MultiPlan Corporation (NYSE:MPLN) is operating in the healthcare sector, providing data analytics and technology-enabled cost management solutions to healthcare companies. MultiPlan Corporation (NYSE:MPLN) has a PE ratio of 8.58 as of February 5. It is a popular penny stock among hedge funds. Of the 920 funds tracked by Insider Monkey, 24 funds had stakes in MultiPlan Corporation (NYSE:MPLN) as of the end of the third quarter of 2022. The net worth of these stakes was about $185 million. In November 2022, MultiPlan Corporation (NYSE:MPLN) posted third-quarter results. Its GAAP EPS in the period came in at $0.03, meeting estimates. Revenue in the period fell 13.1% on a YoY basis to $250.5 million. MultiPlan Corporation (NYSE:MPLN) updated its full-year 2022 guidance. It expects revenue of $1,075 million to $1,090 million in the period.
Diamond Hill Capital made the following comment about MultiPlan Corporation (NYSE:MPLN) in its Q3 2022 investor letter:
“On an individual holdings’ basis, top contributors to return in Q3 included short positions in MultiPlan Corporation (NYSE:MPLN), WD-40 Company and United Parcel Service (UPS). MultiPlan is a healthcare services business providing out-of-network cost management solutions to healthcare payors. In our view, MultiPlan was a compelling short opportunity due to a combination of a high valuation and several fundamental risk factors, including a high degree of customer concentration, rising regulatory risk and high leverage limiting its ability to seek strategic alternatives. In Q3, its share price reacted negatively after disclosing that one of its largest customers was renewing its contract on terms less favorable for MultiPlan — which was in line with our thesis. With the share price subsequently trading below our estimate of intrinsic value, we chose to cover the short position.”
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