In this article we will be taking a look at 5 stocks to buy according to Roger Ibbotson’s Zebra Capital. To read our detailed analysis, you can go directly to see 10 Best Stocks to Buy According to Yale Finance Professor.
5. Otter Tail Corporation (NASDAQ:OTTR)
Zebra Capital’s Stake Value: $931,000
Number of Hedge Fund Holders:17
Otter Tail Corporation (NASDAQ:OTTR) is an energy company serving more than 400 towns and 14 municipal utilities, with a generating capacity of around 660 megawatts, serving nearly 130,000 customers in three states. In 2021, Otter Tail Corporation (NASDAQ:OTTR) reported revenues of nearly $1.2 billion, which is an increase of 34.5% year on year, while the EPS has increased by nearly 81% to $4.23 per share.
Otter Tail Corporation (NASDAQ:OTTR) is one of the few companies which has stayed consistent with regards to its price in 2022, which is one of the reasons why its among the top 10 stocks to buy according to Roger Ibbotson’s Zebra Capital.
4. Amkor Technology, Inc. (NASDAQ:AMKR)
Zebra Capital’s Stake Value: $957,000
Number of Hedge Fund Holders: 23
A semiconductor company, Amkor Technology, Inc. (NASDAQ:AMKR) recoded more than $6 billion in revenue in 2021, even while its share price has suffered in 2022, in line with other tech companies. With a share price drop of 41% YTD, many investor will be wary of holding on to their investment, but with a median target price of $25.75, it might be worth holding on to your shares for the time being.
According to Seeking Alpha, Amkor Technology, Inc. (NASDAQ:AMKR) has posted a record quarter lately, which combined with its extremely low share price means it has one of the lowest multiples for a tech stock, which shows potential for explosive growth later.
3. Chesapeake Energy Corporation (NASDAQ:CHK)
Zebra Capital’s Stake Value: $1.123 million
Number of Hedge Fund Holders :59
Another one of the top 10 stocks to buy according to Roger Ibbotson’s Zebra Capital is Chesapeake Energy Corporation (NASDAQ:CHK), an energy company and engages in hydrocarbon exploration. Chesapeake Energy Corporation (NASDAQ:CHK) produces around 463,000 barrels of oil every day, with over 70% of it being natural gas, and has nearly 1,600 million barrels of oil reserves. These impressive stats have allowed it to record sales of nearly $5.8 billion in 2021.
Chesapeake Energy Corporation (NASDAQ:CHK) recently doubled its authorization for common stock and warrant repurchase from $1 billion to $2 billion, even as its top executives have bought up more stock in the company, and insiders purchasing shares is always a good indicator of the potential of the stock.
ClearBridge Investments mentioned Chesapeake Energy Corporation (NASDAQ:CHK) in its Q1 2022 investor letter. Here is what it said:
“In the early days of the invasion, we made two measured changes to the portfolio based on longer-term fallout we anticipate from Russia’s invasion of Ukraine. First, we initiated small positions in U.S. natural gas producers Chesapeake (NYSE:CHK).
Given its superior environmental profile compared to other fossil fuels, we have long favored natural gas in our energy holdings. Combustion of natural gas releases 50% less CO2 than coal, 25% less CO2 than gasoline and dramatically less particulate and pollution, per the U.S. Energy Information Administration. With the advances in shale production this century, the U.S. has become a natural gas powerhouse with some of the lowest-cost and largest reserves in the world. But because natural gas is difficult to ship across the ocean (it must be liquefied, which requires expensive infrastructure on both ends of the voyage), America’s gas bounty has ironically proved a burden for U.S. producers.
The surplus of natural gas in North America has resulted in low prices and weak earnings for gas-focused producers. Exports, while growing, are restrained by the high cost of building export infrastructure. Europe, in a Faustian bargain, has relied on abundant, inexpensive Russian gas transported by pipeline.”
2. Ovintiv Inc. (NYSE:OVV)
Zebra Capital’s Stake Value: $1.169 million
Number of Hedge Fund Holders: 44
Exploration and energy companies are abundant among the top 10 stocks to buy according to Roger Ibbotson’s Zebra Capital, and Ovintiv Inc. (NYSE:OVV) is no exception. Initially founded in Canada, the company is now headquartered in Delaware, in the United States. With $8.7 billion in revenue in 2021, Ovintiv Inc. (NYSE:OVV) has a land position of more than 1.3 million net acres in Canada, and 929,000 acres in the United States.
Ovintiv Inc. (NYSE:OVV) is also one of the very few companies to have seen its share price increase in 2022, registering an increase of nearly 14%, and a double digit increase in 2022 is nothing to scoff at in this economy. J.P. Morgan upgraded its target price of Ovintiv Inc. (NYSE:OVV) to $64 from $56.
In their Q4 2021 investor letter, Miller Value Partners mentioned Ovintiv Inc. (NYSE:OVV). Here is what it said:
“The outlook for high multiple favorites depends to a great degree on interest rates. Warren Buffett likened interest rates to the force of gravity for asset prices. At current low levels, high valuations on long-duration assets can be justified. If interest rates move up, the adjustment will be painful. Market action early in the new year, with the swift moves up in interest rates and down in the Nasdaq, offers a taste of the medicine.
We underwrite all our names to have sufficient upside even if risk-free rates move up to 3% (a scenario, not a forecast!). As we evaluate the opportunity set, we find more attractive prospects in the classic value names. We often hear that people think value investing is dead, which only strengthens our conviction. Our gross exposure to classic value has risen from 44% a year ago to 62% currently.
One new name that illustrates the potential we see is Ovintiv (OVV), an oil and gas producer. We’ve seen a huge shift in the industry away from growth towards returns on capital, cash generation, and capacity discipline. OVV exemplifies the change.”
1. Ryerson Holding Corporation (NYSE:RYI)
Zebra Capital’s Stake Value: $1.175 million
Number of Hedge Fund Holders: 16
Topping the list of the top 10 stocks to buy according to Roger Ibbotson’s Zebra Capital is Ryerson Holding Corporation (NYSE:RYI), which makes up nearly 2.7% of the fund’s portfolio. Ryerson Holding Corporation (NYSE:RYI) is a value-added processor and distributor of industrial metals, and maintains operations in various countries including the United States, Mexico, China and Canada.
Even though its share price has been decimated in 2022, Ryerson Holding Corporation (NYSE:RYI) has still recorded an increase of 41% over the past one year, and currently has a Zacks Rank rating of “Buy”. However, Zebra Capital has reduced its stake by 7% in the company in the latest quarter, a move which Ritholtz Wealth Management also undertook, decreasing its position in Ryerson Holding Corporation (NYSE:RYI) by 22.6%, while other funds have increased their position.
See also 10 Best Construction Materials Stocks To Buy Now and 10 Best Dividend Stocks for Passive Income
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