5 Undervalued High Free Cash Flow Stocks to Buy Amid Recession

4. AT&T Inc. (NYSE:T)

Number of Hedge Fund Holders: 74

PE Ratio: 7.02

Free Cash Flow TTM: $14.7 Billion

AT&T Inc. (NYSE:T) is a media, communications, and technology firm. On July 21, the company announced that it was cutting the 2022 free cash flow forecast to $14 billion from $16 billion previously. With the firm generating $4 billion in free cash flow in the first half of 2022, this means it is expecting to rake in $10 billion in free cash flow during the second half. The company said it would generate this amount through wireless customer growth, price increases, and lower cash interest expenses. 

On July 22, Cowen analyst Colby Synesael maintained a Market Perform rating on AT&T Inc. (NYSE:T) stock and lowered the price target to $24 from $27, noting that elongated collection cycles and increased investment were some of the reasons for the downward cash flow guidance of the firm.  

At the end of the first quarter of 2022, 74 hedge funds in the database of Insider Monkey held stakes worth $4 billion in AT&T Inc. (NYSE:T), compared to 70 in the preceding quarter worth $4.9 billion.  

In its Q4 2021 investor letter, Weitz Investment Management, an asset management firm, highlighted a few stocks and AT&T Inc. (NYSE:T) was one of them. Here is what the fund said:

“After several quarters of pandemic-induced outsized growth, new broadband connection growth has slowed for U.S. cable operators. This slower growth has coincided with a renewed push by competitors like Verizon and AT&T Inc. (NYSE:T) to offer high-speed data (either via wireless connects or by building new fiber-optic networks).”