Activist investor activity has been high amid the heightened volatility in the equity markets in 2026. Activist hedge funds have targeted companies they believe are undervalued, continue to generate substantial free cash flow, and hold excess cash.
The investors have also pushed for capital allocation changes, operational restructuring, board representation, asset sales, and strategic reviews. They are also pressuring management teams to improve returns on invested capital and return more capital to shareholders.
Elliott Investment Management, Starboard Value, Engine Capital, Irenic Capital, JANA Partners, Oasis Management, and other prominent activist funds have been the most aggressive in trying to unlock value in some of these stocks.
According to Barclays, 179 campaigns were launched globally during the first nine months of the year. As many as 91 activist campaigns targeted U.S. companies. Elliott was the most aggressive, pushing for changes in 16 campaigns worldwide. Explore some of the fund’s top 10 stock picks.
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Likewise, technology and consumer companies were the most targeted, accounting for 60% of the activist campaigns. Activist hedge funds argued that companies needed to adopt AI faster, improve productivity, and communicate their AI strategies effectively.
Although campaign activity moderated in Q3, the broader trend remains significant. For investors looking for top activist targets, companies with low valuation multiples, strong free cash flow, and significant gaps between market value and estimated intrinsic value offer some of the best investment opportunities.
Our Methodology
To compile a list of the 10 activist target stocks with high cash and low valuation, we scanned for some of the biggest activist investor campaigns in 2026. From those campaigns, we selected companies with strong cash flow that are attracting activist investors. We also evaluated the stocks’ valuations and detailed the number of hedge funds holding stakes in them. Finally, we listed the stocks in ascending order based on the number of hedge funds holding stakes in them in Q2 2026.
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. Insider Monkey’s quarterly newsletter strategy selects 14 small-cap and large-cap stocks every quarter and has returned 612% since May 2014, beating its benchmark by 375 percentage points (see more details here).
10. EPAM Systems (NYSE:EPAM)
Activist Investor: Engine Capital
Number of Hedge Fund Holders: 34
Cash and Cash Equivalent: $794.3 Million
EPAM Systems (NYSE:EPAM) has attracted activist investor attention amid its strong cash position, cash flow generation, and low valuation. In August, Engine Capital disclosed a 1.5% stake in the company and called for aggressive measures to unlock shareholder value.
The activist campaign comes as EPAM shares have significantly underperformed the broader market, falling 29% year to date, compared with a 24.9% gain for the Insider Monkey Billionaire Index. See Why is EPAM exploring cybersecurity opportunities?
Engine Capital insists the company is in a solid financial position to finance stock buybacks using its existing cash reserves and future cash flow. It has also urged management to consider a formal strategic review that could entail a potential sale to a strategic buyer or private equity firm.
EPAM Systems’s balance sheet supports Engine Capital’s proposed capital return strategy. At the end of the second quarter of 2026, the company reported $794.3 million in cash and cash equivalents, down from $1.3 billion at the end of 2025.
The market heavily penalized EPAM over fears that Generative AI would cannibalize traditional offshore coding and IT consulting services. Engine’s thesis views AI as an incremental growth driver rather than a structural threat, with EPAM successfully shifting to AI-native architecture.
Meanwhile, the stock’s significant decline has left it trading at a considerable discount to industry peers. It currently trades at approximately a 10.5x forward price-to-earnings multiple, compared with the sector median of 21.3x. Its price-to-sales multiple of 1.3x is also below the sector median of 3.2x.
EPAM Systems could be an interesting undervalued technology stock, particularly given its relatively low sales multiple, cash position, and potential for earnings recovery.
9. Shake Shack Inc. (NYSE:SHAK)
Activist Investor: Starboard Value
Number of Hedge Fund Holders: 36
Cash and Cash Equivalent: $307.9 Million
Shake Shack Inc. (NYSE:SHAK) has attracted activist investor Starboard Value, which established a new stake in the company in August 2026. The activist believes the restaurant chain has a strong brand trading at a significant discount to its underlying value, creating an opportunity to unlock shareholder value through strategic changes.
The hedge fund wants the company to accelerate its US expansion by adopting a franchising strategy. The model would let the company reduce capital expenditure and scale faster. The company currently relies heavily on company-operated restaurants in the United States. Here’s Why Starboard Value stakes could be a game changer.
Additionally, Starboard Value believes Shake Shack Inc. could be worth twice its prevailing valuation if it executes the right strategy. A more asset-light business model could improve capital efficiency and boost the company’s valuation. The sentiment comes as the stock trades at a forward P/E multiple of 50x and a price-to-sales multiple of 1.90x.
Shake Shack Inc. is also in a solid financial position, having exited the second quarter with cash and cash equivalents of $307.9 million. Its robust growth profile supports investor interest. Its growth momentum also remains encouraging, with second-quarter revenue increasing 17% year over year, while adjusted EBITDA rose 3.9%.
8. Is Bio-Rad Laboratories, Inc. (NYSE:BIO)
Activist Investor: Elliott Investment Management
Number of Hedge Fund Holders: 40
Cash and Cash Equivalent: $517 Million
Bio-Rad Laboratories, Inc. (NYSE:BIO) is an interesting activist-investor target as it combines a substantial liquid asset position and an underperforming core business that could benefit from operational restructuring. While the stock has rallied 19% year-to-date, Elliott Investment Management insists it can generate more value. Explore why the stock is rallying.
The activist investor insists Bio-Rad Laboratories, Inc.’s operating margins have lagged industry peers, which has affected the stock’s performance. It wants the company to consider monetizing Sartorius with its 28% stake. The holding has been valued at approximately $5 billion, making it an unusually significant asset relative to Bio-Rad’s own market capitalization.
As of the end of June, Bio-Rad Laboratories, Inc. had $517 million in cash and cash equivalents and $1.01 billion in short-term investments. This is a reasonably strong liquidity position with approximately $1.62 billion in cash and short-term investments. However, the stock is not cheap, trading at a premium with a forward P/E of 40.59x and a P/S of 3.87x versus the sector median of 19.70x and 3.66x, respectively. Can Activist Pressure Close Bio-Rad’s Valuation Discount?
7. Is Snap Inc. (NYSE:SNAP)
Activist Investor: Irenic Capital Management
Number of Hedge Fund Holders: 45
Cash and Cash Equivalent: $960.49 Million
Snap Inc. (NYSE:SNAP) has come under scrutiny amid valuation concerns. In March, Irenic Capital disclosed a 2.5% stake in the company and reiterated that operational changes were needed to unlock substantial shareholder value.
As part of its campaign, Irenic highlighted the substantial costs associated with Snap Inc.’s augmented reality (AR) glasses business, which it estimates have exceeded $3.5 billion. With the unit consuming about $500 million annually, the activist investor wants the company to either fund the business independently or discontinue it. Snap’s Specs Get an Enterprise Boost.
It has also called for lower operating expenses and increased share repurchases to offset shareholder dilution. The push for more stock buybacks came after Snap ended 2025 with $2.9 billion in cash and cash securities and $437.2 million in free cash flow. Its free cash flow in the first half of 2026 rose 194% to $406.54 million. It also ended the quarter with cash and cash equivalents of $960.49 million.
On the valuation front, the stock trades at a significant discount, with a forward P/E multiple of 7.7x versus the sector median of 12.4x. Its price-to-free-cash-flow multiple of approximately 12.8x suggests it could offer value if its cash generation proves sustainable.
6. Tripadvisor, Inc. (NASDAQ:TRIP)
Activist Investor: Starboard Value
Number of Hedge Fund Holders: 37
Cash and Cash Equivalent: $843.21 Million
Tripadvisor, Inc. (NASDAQ:TRIP) has emerged as a major activist investor target following years of underperformance. Earlier this year, Starboard Value pushed for board changes and a potential sale to unlock shareholder value. Explore the company’s underperformance.
The activist pressure follows Tripadvisor shares’ nearly 50% decline since CEO Matt Goldberg took the helm in 2022. Starboard believes that separating or selling Viator and TheFork could help unlock their standalone value and create greater returns for shareholders. Will TheFork Sale Unlock Value?
While Tripadvisor, Inc. is not net cash, it maintains a substantial liquidity reserve. The company had $843.21 million in cash and cash equivalents as of the end of June 2026. The significant cash balance makes it interesting to activist investors who believe management can use it for buybacks and dividends to return value to shareholders
Tripadvisor, Inc. also appears to be trading at a discount, with a forward P/E of 9.1x versus the sector median of 12.4x. It also trades at a much lower price-to-sales multiple of 0.59x against the sector median P/S of 1.10x. The valuation suggests upside potential, especially given the company’s established global travel brand and its other businesses.
5. Why Dynatrace (NYSE:DT)
Activist Investor: Starboard Value
Number of Hedge Fund Holders: 48
Cash and Cash Equivalent: $1.1 Billion
Dynatrace, Inc. (NYSE:DT) has gained more than 30% year-to-date, outperforming the broader market. Despite the strong share-price performance, the software company has attracted activist investor interest, with Starboard Value seeing opportunities to unlock additional shareholder value through its substantial cash generation and capital allocation strategy.
The activist hedge fund is urging the company to return more capital to shareholders and improve operating margins. It insists it has considerable financial flexibility to increase shareholder distributions.
While Dynatrace, Inc. exited June with about $1.1 billion in cash and cash reserves, Starboard Value believes it can return up to $2.5 billion to shareholders over the next three years. Dynatrace has already approved $1 billion in share buybacks. Additionally, it wants the company to focus on margin expansion. Why is the stock rallying?
Adjusted free cash flow in the first quarter of fiscal 2027 increased to $309.18 million, up from $262.16 million in the same quarter last year. The company expects full-year adjusted free cash flow to range between $610 million and $615 million.
Nevertheless, valuation remains a consideration for investors. Dynatrace, Inc. trades at a forward price-to-earnings multiple of 29.14x, above the sector median of 23.26x, suggesting that some of its growth prospects and potential operational improvements may already be reflected in its share price.
4. Voya Financial (NYSE:VOYA)
Activist Investor: Toms Capital Investment Management
Number of Hedge Fund Holders: 50
Cash and Cash Equivalent: $1.09 billion
Voya Financial (NYSE:VOYA) is a potential value-oriented activist investment owing to its capital-return capacity, asset-management business, and potential to improve shareholder returns. In June, the company came under increased pressure from Toms Capital Investment Management.
The activist hedge fund is urging the company to consider strategic options, including a potential sale, to unlock value. According to the hedge fund, the company is at an inflection point, and management cannot be trusted to navigate it. Explore Q2 Financials.
Toms Capital argues that Voya has suffered from a persistent valuation discount despite strong operating fundamentals. It has also criticized management’s handling of its stop-loss insurance business and strategic direction. The hedge fund believes the company is undervalued because it has a substantial retirement services platform, and its asset management business also provides another potential source of value.
Voya Financial boasts significant liquidity, with $1.09 billion in cash and cash equivalents as of the end of June. Excess capital generation reached $150 million in the second quarter, as the company also returned $200 million to shareholders through dividends and buybacks. The stock also trades at a discount, with a forward P/E multiple of 8.59x and a price-to-sales multiple of 1.16x compared to the sector median of 11.23x and 1.15x, respectively.
3. Devon Energy Corporation (NYSE: DVN)
Activist Investor: Toms Capital Investment Management
Number of Hedge Fund Holders: 82
Cash and Cash Equivalent: $1.01 Billion
Devon Energy Corporation (NYSE:DVN) stands out as an interesting value-oriented activist investment candidate because of its substantial operating cash flow, shareholder-return potential, and relatively modest valuation.
In June, Toms Capital Investment Management acquired a sizable stake in the company and started pushing for asset sales and a potential sale of the entire business. Kimmeridge Energy Management is another asset management firm that has also urged the company to streamline its portfolio and improve its strategic direction. Is Devon a top dividend stock?
The activist investors are urging Devon Energy Corporation to consider divesting non-core oil and gas assets to unlock shareholder value. They also want management to focus on higher-return assets, improve capital allocation, and take steps to strengthen shareholder returns.
The activist campaign comes as the company boasts significant cash reserves. It ended the second quarter with cash and cash equivalents of about $1.01 billion and net cash from operating activities of $3.67 billion, providing significant financial flexibility.
Despite gaining approximately 37% and outperforming the broader market, Devon Energy Corporation shares continue to trade at a discount to industry peers. It trades at a forward price-to-earnings multiple of 9.56x versus the sector median of 12.55x, leaving room for further value creation if management responds to activist demands.
2. Hewlett Packard Enterprise Co (NYSE:HPE)
Activist Investor: Elliott Investment Management
Number of Hedge Fund Holders: 85
Cash and Cash Equivalents: $6.21 Billion
Hewlett Packard Enterprise Co (NYSE:HPE) has attracted significant activist investor interest amid concerns it is trading at a discount. Elliott Investment Management reportedly built a $1.5 billion stake in the company last year. At the same time, Irenic Capital also acquired a position in May, adding to pressure on management to unlock shareholder value.
As part of its campaign, Elliott has called for operational improvements, cost reductions, and portfolio restructuring. The activist investor has already secured a board seat and obtained the right to monitor another director, giving it greater influence over the company’s strategic direction. Take a look at HPE’s healthier outlook.
Meanwhile, Hewlett Packard Enterprise Co’s cash position has strengthened, supported by robust demand for AI servers. As of July 31, the company held $6.21 billion in cash and cash equivalents, up from $4.6 billion in the same period last year. Operating cash flow reached $2.62 billion during the first nine months of the fiscal year, providing additional financial flexibility. Explore HPE vs. Super Micro on AI servers.
Despite improving cash generation, the stock trades at a forward price-to-earnings multiple of about 12x, a discount to the sector average of 21x.
1. Synopsys, Inc. (NASDAQ:SNPS)
Activist Investor: Elliott Investment Management
Number of Hedge Fund Holders: 85
Cash and Cash Equivalent: $3.6 Billion
Synopsys, Inc. (NASDAQ:SNPS) has emerged as an activist target stock, combining strong cash-generation potential with a relatively attractive forward valuation. Earlier this year, Elliott Investment Management disclosed a multibillion-dollar stake in the company as it sought to push for operational improvements.
Elliott has engaged with management to push for higher profit margins, arguing that Synopsys could generate greater profitability from its software and services businesses. It is also seeking improvements in overall financial performance to better reflect the company’s strategic importance to the semiconductor industry. Explore Synopsys’ $11 B AI roadmap.
The campaign comes as Synopsys, Inc. boasts of substantial cash-generating potential supported by recurring software revenue. As of July 31, it had $3.6 billion in cash and cash equivalents. Management also projected full-year operating cash flow of $2.8 billion and free cash flow of $2.6 billion. Strong free cash flow allows Elliott to push management to improve capital allocation, reduce debt, and enhance operating efficiency.
Meanwhile, the stock has declined 2.67% year-to-date, reflecting its recent underperformance. It also trades at approximately 25x forward P/E, significantly below its trailing P/E of 82x, suggesting investors are pricing in an earnings recovery and stronger future profitability. Is its growth worth a premium?
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