5 Undervalued High Free Cash Flow Stocks to Buy Amid Recession

In this article, we discuss 5 undervalued high free cash flow stocks to buy amid recession. If you want to read about some more undervalued high free cash flow stocks, go directly to 10 Undervalued High Free Cash Flow Stocks to Buy Amid Recession.

5. Equinor ASA (NYSE:EQNR)

Number of Hedge Fund Holders: 16  

PE Ratio: 7.62

Free Cash Flow TTM: $32 Billion

Equinor ASA (NYSE:EQNR) operates as an integrated oil and gas company. The firm has an impressive dividend profile that stretches back more than a decade. It is slowly trying to build a profile that increases the payouts over time. On July 27, the company declared a quarterly dividend of $0.20 per share, in line with previous. The forward yield was 2.21%. The firm also declared an extraordinary cash dividend of $0.50 per share. The company beat market estimates on earnings for the second quarter of 2022. 

On June 17, JPMorgan analyst Christyan Malek upgraded Equinor ASA (NYSE:EQNR) stock to Neutral from Underweight and raised the price target to NOK 350 from NOK 305, noting that the premium multiple of the firm was sticky owing to the developments from Russia. 

Among the hedge funds being tracked by Insider Monkey, Boston-based investment firm Arrowstreet Capital is a leading shareholder in Equinor ASA (NYSE:EQNR), with 10 million shares worth more than $382 million. 

In its Q2 2021 investor letter, Massif Capital, an asset management firm, highlighted a few stocks and Equinor ASA (NYSE:EQNR) was one of them. Here is what the fund said:

“We currently have two oil-related positions in our portfolio and believe the oil opportunity set is ripe. As one might expect, both positions, (including Equinor: EQNR) performed well during the second quarter, given the steady march higher that oil has made in recent months. We maintain a positive outlook for both companies, although, importantly, our posture is not predicated on an expectation for continued oil price appreciation. This is not because of our inability to imagine scenarios where that does occur, but more out of an abundance of caution for what is a highly volatile commodity that at current price levels should be more than sufficient to generate ample free cash flow for any investable oil firm.

In the future, we expect both firms in the portfolio to generate significant free cash flow and expect EQNR to reinvest that free cash flow into a combination of offshore oil and wind opportunities with high rates of return. The path forward for AOI is more complicated and does warrant a few comments.”