We recently compiled a list of the 11 Cheap ESG Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where Seagate Technology Holdings plc (NASDAQ:STX) stands against the other cheap ESG stocks.
These days, it seems like everyone wants to wear the “saving the world” cape. Whether this urge to make a real impact on the world stems from a desire to ride the social trend wave or simply out of genuine concern is, well, a debate for another day. For now, let’s focus on the fact that all companies must adhere to Corporate Social Responsibility (CSR) by law.
In other words, ESG companies are those that incorporate Environmental, Social, and Governance factors into their operations and decision-making. This framework is utilized to measure an organization’s practices and performance on sustainability and ethical grounds. In capital markets, some investors employ ESG criteria to assess companies and make their investment decisions accordingly, a practice known as ESG investing. While investing delivers financial returns, ESG investing offers both financial returns and societal impacts, and that’s what is most valued by some investors.
Some believe ESG investing is aligned with reduced risk exposure, stakeholder interests, and superior returns. Not only attractive in theory, but there are reports that back this form of investing. For instance, the Sustainability Megatrends Report by Cushman & Wakefield reveals that ESG companies are gaining traction from institutional investors. A survey of 250 institutional investors indicated that around 60% noted higher performance yield from ESG investments, and 78% were willing to pay higher premiums for these funds.
“Institutional investors are showing increased demand for properties with strong ESG-related management and activities,” the report underscores.
A US SIF “Trends Report” reveals that out of the US market size of $52.5 trillion, $6.5 trillion (12%) is identified as a sustainable or ESG investment. Having said that, as many as 73% of respondents believe the sustainable investment market will grow over the next few years. Therefore, community investing continues to shine with rising enthusiasm across several types of investors.
ESG companies are mainly ranked by third-party ranking agencies based on how well they perform across Environmental, Social, and Governance indicators. Using standardized metrics, proprietary models, and disclosures, the companies are then assessed and compared. Among the most notable agencies are MSCI, Sustainalytics (by Morningstar), Refinitiv ESG Scores, and S&P Global ESG Scores. In this analysis, we have used the ratings by Sustainalytics, which covers over 15,000 firms across 42 industries globally. The firm recently disclosed its 2025 list of ESG Top-Rated Companies, identifying Global 50 Top-Rated companies and other regional and industry leaders. Given this, we will take a look at some of the best ESG stocks to consider.
Our Methodology:
We have compiled a list of 11 companies ranked by Sustainalytics (by Morningstar) in its recent ESG Top-Rated Companies report. From the report, we identified companies with a forward P/E less than 15, extracted from FINVIZ. From there, we picked companies with the highest number of hedge fund investors, as per Insider Monkey’s database of Q4 2024. From less preferred to highly preferred, according to hedge funds, the selected stocks are listed in either the global, regional, or industry standings in the report.
At Insider Monkey, we are obsessed with hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A technician configuring a network-attached storage drive.
Seagate Technology Holdings plc (NASDAQ:STX)
Number of Hedge funds holding: 52
Forward P/E as of May 06, 2025: 10.06
Seagate Technology Holdings plc (NASDAQ:STX) is a leading provider of hard disk drives for data storage for both enterprise and consumer markets. With a presence in Singapore, the United States, the Netherlands, and internationally, the core offerings of the company include mass capacity storage products, legacy applications, and the Lyve edge-to-cloud mass capacity platform. The technology giant remains focused on delivering sustainable value for customers, stakeholders, and communities. With a P/E ratio of 10.06, STX is one of the cheap stocks to buy.
Waste Management is an integral part of Seagate Technology Holdings plc (NASDAQ:STX). In doing so, programs have been established to carefully track, manage, and report all kinds of waste across the global footprint. These programs are then used to organize various waste streams and effectively dispose of waste whilst complying with the regulatory requirements. Among these programs is the Circularity Program, which allows the company to minimize environmental impact, improve supply chain resilience, and support the company’s strategy. Extending the useful life involves obtaining warranty-returned drives, buying back products from customers, and refurbishing and reselling useful drives. In 2023 alone, the company was able to extend the life of around 1.19 million drives.
A way of supporting a culture of inclusivity is its Employee Resource Groups (ERG), whereby Seagate Technology Holdings plc (NASDAQ:STX) provides a haven for discussion, connection, networking, and professional development. This aids in bridging a connection with the company’s workforce by making them feel safe, valued, and respected. One project that is of true importance is the company’s STEM and education outreach. From interacting with students at STEM events to providing nutritious meals to those in need and joining hands in the war against cancer and other diseases, the company has a strong footing in community engagements.
While implementing strong data security protocols to maintain good governance, Seagate Technology Holdings plc (NASDAQ:STX) continues to ensure that the suppliers work with equally valued ESG morals. This accountability is a part of the annual monitoring and audit process, making STX one of the most ESG-responsible companies to watch.
Overall STX ranks 10th on our list of cheap ESG stocks to buy according to hedge funds. While we acknowledge the potential of STX as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than STX but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
