In this article, we will take a look at the 5 most undervalued value stocks to buy according to hedge funds. To see more such companies, go directly to 15 Most Undervalued Value Stocks To Buy According To Hedge Funds.
5. Wells Fargo & Company (NYSE:WFC)
Number of Hedge Fund Holders: 77
Wells Fargo & Company (NYSE:WFC) is yet another bank stock in our list of the most undervalued value stocks to buy according to hedge funds. Earlier this month, the bank announced a quarterly dividend of $0.30 per share. Forward dividend yield at the time came in at 2.68%. The dividend is payable on March 1.
Wells Fargo & Company (NYSE:WFC) stock was recently downgraded by Jefferies analyst Ken Usdin after the company posted fourth-quarter results. The analyst said positive news from the operating cost front was offset by lower earnings power.
4. Citigroup Inc. (NYSE:C)
Number of Hedge Fund Holders: 85
Insider Monkey’s database of 920 hedge funds shows 85 hedge funds had stakes in Citigroup Inc. (NYSE:C) at the end of the third quarter of 2022. The biggest stakeholder of Citigroup Inc. (NYSE:C) was Warren Buffett’s Berkshire Hathaway, which had a $2.3 billion stake in the company. The second biggest stakeholder in Citigroup Inc. (NYSE:C) was Natixis Global Asset Management’s Harris Associates, with a $958 million stake.
3. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders: 97
Of the 920 hedge funds tracked by Insider Monkey, 97 hedge funds reported owning stakes in Bank of America Corporation (NYSE:BAC). This makes Bank of America Corporation (NYSE:BAC) one of the most popular value stocks according to the smart money. Bank of America Corporation (NYSE:BAC) has a PE ratio of 11.1 as of January 27. Bank of America Corporation (NYSE:BAC) joins the list of major companies facing the heat of tough economic conditions. It was reported by Bloomberg earlier this month that Bank of America Corporation (NYSE:BAC)’s top management has asked its managers to stop hiring except for crucial roles as the company looks to cut costs. The hiring freeze is expected to remain effective until at least the first half of the year or until the economy begins to turn the corner.
2. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 110
One of the biggest banks in the world, JPMorgan Chase & Co. (NYSE:JPM) ranks 2nd in our list of the most undervalued value stocks to buy according to hedge funds. Of the 920 hedge funds tracked by Insider Monkey, 110 funds had stakes in JPMorgan Chase & Co. (NYSE:JPM) as of the end of the third quarter. The total value of these stakes was $6.4 billion. The biggest stakeholder of JPMorgan Chase & Co. (NYSE:JPM) among the elite hedge funds was Ken Fisher’s Fisher Asset Management, with an $821 million stake.
Earlier in January, JPMorgan Chase (NYSE:JPM) CEO Jamie Dimon said in an interview with CNBC that the Federal Reserve could continue to increase interest rates amid stubbornly high inflation. Dimon said that he thinks rates are “probably going to go higher than 5%.” He thinks there’s a “lot of underlying inflation, which won’t go away quick.”
1. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 177
Meta Platforms, Inc. (NASDAQ:META) shares shot up about 4% on January 26 after a Wall Street Journal report said Meta Platforms, Inc. (NASDAQ:META) will pay BuzzFeed millions of dollars to generate content for Facebook platform. Meta Platforms, Inc. (NASDAQ:META) is investing heavily to reinvigorate growth on its platform as it faces several challenges such as slowing growth of Instagram and Facebook and tough competition from TikTok. Earlier in January, Michael Nathanson of MoffettNathanson said Meta Platforms, Inc. (NASDAQ:META) and Google present “really attractive” entry points for investors. The analyst thinks people are overblowing the fears regarding the ads industry. He thinks the challenges in the ads industry are cyclical in nature.
Rowan Street Capital made the following comment about Meta Platforms, Inc. (NASDAQ:META) in its Q4 2022 investor letter:
“Meta Platforms, Inc. (NASDAQ:META) Stock declined -64% in 2022, while their revenues fell just -2% and earnings per share (EPS) declined -37% due to a ramp-up in investment expenses, which we have covered to a great extent in our recent write-up on META). Meta is our second biggest holding in the fund and one that has been a significant detractor from performance in 2022. We published a write-up back in November: Does a $750 billion decline in Meta’s market cap make sense? We strongly encourage you to read it if you have not had a chance to do so. We expect our META holding to be a solid contributor to the fund’s performance over the next several years as well.”
You can also take a peek at 15 Biggest Non-Tech Companies in the World and 23 Most Powerful Countries in the World.
