5 Undervalued S&P 500 Stocks Billionaires Are Loading Up On

3. Cisco Systems Inc (NASDAQ:CSCO)

Number of Billionaire Investors: 19

Cisco Systems Inc (NASDAQ:CSCO) ranks 3rd in our list of the undervalued S&P 500 stocks owned by billionaire hedge fund managers. A total of 19 billionaires had stakes in Cisco Systems Inc (NASDAQ:CSCO) as of the end of the September quarter. In November the stock fell after Cisco Systems Inc (NASDAQ:CSCO) gave a weak full-year revenue guidance.

Oakmark Fund made the following comment about Cisco Systems, Inc. (NASDAQ:CSCO) in its Q3 2023 investor letter:

“Cisco Systems, Inc. (NASDAQ:CSCO) is the leading networking solutions company. Networking equipment becomes more important as businesses modernize their IT infrastructure, and Cisco is well positioned to capture this demand given its broad portfolio and highly effective go-to-market strategy. Cisco is transitioning away from selling mainly transactional hardware and toward selling more software and subscriptions. This shift is expected to accelerate revenue growth, improve operating margins and build recurring revenue. Despite these notable business improvements, Cisco still trades near a trough valuation relative to the S&P 500 Index. More recently, Cisco announced its intention to acquire Splunk, a leader in security and observability, adding to its already strong position in the increasingly important security market. At a low-teens multiple of our estimate of normalized earnings, Cisco is trading comfortably below our estimate of intrinsic value.”