In this article, we will list the 5 Most Undervalued Stocks to Buy and Hold for 2 Years. Please visit 10 Most Undervalued Stocks to Buy and Hold for 2 Years to see the extended list and the methodology behind it.
5. Block Inc. (NYSE:XYZ)
Number of Hedge Fund Holders: 63
Block Inc. (NYSE:XYZ) is one of the most undervalued stocks to buy and hold for 2 years. On May 7, Block reported Q1 2026 earnings, exceeding guidance with gross profit up 27% to $2.91 billion and adjusted diluted EPS reaching an all-time high of $0.85 (up 52% year-over-year). Growth was driven by broad-based strength in both the Cash App and Square ecosystems, with adjusted EBITDA hitting $1 billion.
The company is aggressively integrating AI solutions like “Moneybot” and “Managerbot” to automate operations and improve customer engagement, resulting in significant internal productivity gains. Strategic initiatives such as the expansion of “Neighborhoods,” new ISO partnerships, and deeper integration of “Buy Now, Pay Later” across the Cash App platform are accelerating network connectivity and transaction volume.
Management raised its full-year 2026 outlook, now expecting $12.33 billion in gross profit (19% growth) and adjusted EPS of $3.85 (62% growth). Block Inc. (NYSE:XYZ) remains focused on a long-term strategy of evolving into an “intelligence company,” using AI to provide proactive financial services and deeper, personalized value to both consumers and sellers.
Block Inc. (NYSE:XYZ), founded in 2009 by Jack Dorsey, is an American financial services company. It offers point-of-sale systems and credit solutions to merchants through its Square subsidiary. It offers peer-to-peer payment, banking, and Bitcoin trading through its Cash App platform.
4. Phillips 66 (NYSE:PSX)
Number of Hedge Fund Holders: 64
Phillips 66 (NYSE:PSX) is one of the most undervalued stocks to buy and hold for 2 years. On May 18, Phillips 66 is advancing its integrated wellhead-to-market strategy by moving forward with the Zeus Gas Plant in the Permian Basin and a third Coastal Bend Fractionator on the Texas Gulf Coast. Both projects are scheduled to come online in 2028 and are designed to increase gas processing and NGL fractionation capacity to support growing Permian production volumes.
The Zeus project includes a 300 MMcf/d gas processing facility and the new 45-mile Midland Express/MEX Pipeline, which will integrate gathering systems and provide increased operational flexibility. The third Coastal Bend Fractionator, a 100 MBD facility in Robstown, Texas, will further enhance the company’s ability to move NGLs efficiently through its value chain.
These investments fall within Phillips 66’s existing capital spending guidance and support its broader financial goals of debt reduction and shareholder returns. By expanding these midstream assets, the company aims to better connect Permian supply to key market centers and capture additional value across its integrated network.
Phillips 66 (NYSE:PSX) operates as an integrated downstream energy provider across the United States, the United Kingdom, Germany, and international markets.
3. Centene Corporation (NYSE:CNC)
Number of Hedge Fund Holders: 72
Centene Corporation (NYSE:CNC) is one of the most undervalued stocks to buy and hold for 2 years. On April 28, Centene Corporation reported strong Q1 2026 financial results, with adjusted diluted EPS of $3.37, outperforming internal expectations by ~$0.50. Driven by this solid start, the company has increased its full-year 2026 adjusted diluted EPS guidance to greater than $3.40. During the quarter, Centene also successfully reduced its debt by $1.0 billion.
Operational performance remained robust across its primary business lines. The Medicaid segment achieved an 87.3% health benefits ratio/HBR, aided by effective medical cost management and moderate flu trends, while the Medicare segment saw outperformance in both Medicare Advantage and Prescription Drug Plans/PDP. Although the Commercial segment’s HBR of 75.3% was slightly above expectations due to higher-acuity Marketplace members, total premium and service revenues grew 5% year-over-year to $44.7 billion.
Centene continues to balance its financial growth with significant community engagement, including new initiatives for affordable housing, diabetes-related nutritional support, and provider accessibility for patients with disabilities. Fortune also recognized the company as one of the World’s Most Admired Companies for the eighth consecutive year, reflecting Centene’s ongoing commitment to operational discipline and its long-term enterprise earnings power.
Centene Corporation (NYSE:CNC) is a healthcare enterprise that provides programs and services to government-sponsored healthcare programs. The company’s operations are divided into the following segments: Medicaid, Medicare, Commercial, and Other.
2. Nu Holdings Ltd. (NYSE:NU)
Number of Hedge Fund Holders: 104
Nu Holdings Ltd. (NYSE:NU) is one of the most undervalued stocks to buy and hold for 2 years. On June 4, Nu Holdings announced a share repurchase program authorizing the buyback of up to $1.0 billion of its Class A ordinary shares over the next 12 months, beginning June 4. This initiative reflects the company’s current capital generation strength and its commitment to a deliberate capital allocation policy.
The program is designed to deliver value to shareholders while ensuring that all existing growth investments across Brazil, Mexico, Colombia, and the United States, including necessary regulatory capital buffers, remain fully funded.
The repurchases will be conducted periodically in the open market in accordance with applicable securities regulations. Nu Holdings Ltd. (NYSE:NU) noted that the program is discretionary, meaning it is not obligated to acquire a specific number of shares and maintains the flexibility to suspend, modify, or discontinue the plan at any time.
Nu Holdings Ltd. (NYSE:NU) operates as a digital banking platform provider across the United States, Mexico, the Cayman Islands, Colombia, and Brazil. The company provides spending solutions, including Nubank+ Tier, Nu credit and prepaid card, Ultraviolet credit and prepaid card, mobile payment solutions, and Nu Shopping. It also offers transactional Solutions, and savings & investing solutions.
1. Citigroup Inc. (NYSE:C)
Number of Hedge Fund Holders: 106
Citigroup Inc. (NYSE:C) is one of the most undervalued stocks to buy and hold for 2 years. On June 4, Citigroup announced the full redemption of two series of notes due in 2027, comprising $2.75 billion of its 1.462% Fixed Rate / Floating Rate Notes and $400 million of its Floating Rate Notes. Both redemptions are scheduled to take place on June 9, 2026.
Investors will receive the cash redemption price, which equals the par value of the notes plus any accrued and unpaid interest up to the redemption date. This payout ensures that holders of the affected securities are compensated for the early retirement of the debt.
The decision is part of Citigroup’s ongoing liability management strategy to enhance the efficiency of its capital and funding structure. The company continues to actively evaluate its debt portfolio and may pursue further redemptions or repurchases based on market conditions, regulatory changes, and broader capital objectives.
Citigroup Inc. (NYSE:C) is a major global financial services holding company offering banking, credit, markets, wealth management, and advisory services to consumers, corporations, governments, and institutions. Headquartered in New York City, the company traces its roots back to 1812.
While we acknowledge the potential of C to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than C and that has 100x upside potential, check out our report about the cheapest AI stock.
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