15 best very cheap stocks to buy right now
Stock valuations are again a topic of discussion currently as some analysts are warning against
the market’s optimism that is sending tech valuations soaring to record levels. While several
analysts believe the Federal Reserve to raise interest rates just one more time in 2023 before
hitting a temporary pause, there’s a section in the market that is hoping for rate cuts. This
optimism is having a direct effect on the technology sector which looks great in the short term.
The S&P 500 Information Technology Index is up 23% in 2023, compared to a 7.7% gain of the
broader S&P 500 index in the same period. According to an analysis by Bloomberg, this was the
IT sector’s strongest start to a year since 2009. However, this optimism is unfounded and could
cause pain for investors in the coming weeks or months. The Bloomberg report said that tech
stocks in the S&P 500 are trading at about 25 times their prospective earnings.
“To justify such a multiple, the Fed would need to cut rates by at least 300 basis points,” the
report said, citing data from Bloomberg Intelligence.
The report cited Quincy Krosby, chief global strategist at LPL Financial, who said the following:
“Traders are betting on a big about-face in the Fed’s interest-rate policy, but there is no certainty
as to whether, and when, this will happen. Longer-term, the sector’s growth prospects are
attractive, but not at the current valuations.”
Data from Research Affiliates shows that valuations of US stocks are reaching extremely high
levels.
Research Affiliates looked the CAPE ratio metric and found that the US stock benchmark trades
at a multiple around 29, pricier than it has been more than 90% of the time since 1881.
But not all sectors emit this euphoria. The banking sector, which was devastated the collapse of
multiple banks earlier this year, is still reeling from steep share price declines. Some analysts
believe the stock is offering attractive entry points since the fundamentals of several banks that
are currently down remain strong.
Baird analyst David George recently said in a note that the sentiment around bank stocks has
been “abysmal” over the past few weeks and “market participants seem to be pricing in
permanent profitability destruction, which we think is unlikely.” The analyst said that the
banking sector’s risk/reward is “very attractive following panic selling.” George believes these
stocks have priced in a “catastrophe.”
Methodology
For this article, we scanned Insider Monkey’s database of 943 hedge funds and picked 15 tech
stocks with PE ratios less than 15 as of April 25. These are the best very cheap stocks to buy
according to hedge funds.
15. GSK plc (NYSE:GSK)
Number of Hedge Fund Holders: 39
British pharmaceutical giant GSK plc (GSK) ranks x in our list of the very cheap stocks to buy
now. Recently, the European Medicines Agency (EMA) accepted GSK plc (GSK)’s application
requesting an expanded approval of Jemperli to treat a type of uterus cancer.
Earlier this month, GSK plc (GSK) announced to acquire Canadian biotech company Bellus
Health (NASDAQ:BLU) for about $2 billion. Bellus Health is focused in developing treatment
of cough.
As of the end of the fourth quarter of 2022, 39 hedge funds have stakes in GSK plc (GSK). The
biggest stakeholder of GSK plc (GSK) is Steve Cohen’s Point72 Asset Management which owns
a $227 million stake in the company.
https://www.insidermonkey.com/blog/should-you-hold-gsk-plc-gsk-stock-1093646
14. Shell plc (NYSE:SHEL)
Number of Hedge Fund Holders: 40
Shell plc (NYSE:SHEL) is gaining after the company posted upbeat guidance for the fiscal first
quarter. Shell plc (NYSE:SHEL) expects solid performance for its integrated gas and oil
products division in the quarter as compared to the last quarter of 2022.
As of the end of the last quarter of 2022, 40 hedge funds tracked by Insider Monkey were long
Shell plc (NYSE:SHEL). The biggest stakeholder of Shell plc (NYSE:SHEL) was William B.
Gray’s Orbis Investment Management which owns a $393 million stake in the company.
https://www.insidermonkey.com/blog/is-shell-plc-shel-a-good-long-term-bet-1132317
13. Canadian Natural Resources Limited (NYSE:CNQ)
Number of Hedge Fund Holders: 41
Canadian Natural Resources Limited (NYSE:CNQ) in March increased its quarterly dividend by
5.9%. The latest dividend was payable on April 5 to shareholders of record as of March 17. As of
the end of the fourth quarter of 2022, 41 hedge funds had stakes in Canadian Natural Resources
Limited (NYSE:CNQ), according to Insider Monkey’s database of 943 hedge funds. The biggest
hedge fund stakeholder of Canadian Natural Resources Limited (NYSE:CNQ) was Donald
Yacktman’s Yacktman Asset Management which owns an $843 million stake in the company.
12. Altria Group, Inc. (NYSE:MO)
Number of Hedge Fund Holders: 45
Dividend yield over 8%. Over five decades of consistent dividend increases. PE ratio under 15.
These are just a few reasons that make Altria Group, Inc. (NYSE:MO) one of the best long-term
stocks to buy now.
Hedge funds also like Altria Group, Inc. (NYSE:MO). 45 hedge funds in Insider Monkey’s
database had stakes in Altria Group, Inc. (NYSE:MO) as of the end of the fourth quarter of 2022.
The most significant stakeholder of Altria Group, Inc. (NYSE:MO) was Rajiv Jain’s GQG
Partners which owns a $557 million stake in the company.
https://www.insidermonkey.com/blog/should-you-sell-altria-group-mo-now-1133320
11. Definitive Healthcare Corp. (NASDAQ:DH)
Number of Hedge Fund Holders: 46
With a strong dividend growth history and a PE ratio is under 8, Definitive Healthcare Corp.
(NASDAQ:DH) is one of the very cheap stocks to buy now. Earlier this month, Definitive
Healthcare Corp. (NASDAQ:DH) jumped after the company posted strong quarterly results. For
2023 Definitive Healthcare Corp. (NASDAQ:DH) expects its revenue to come in the range of
$31.5 billion to $33 billion, versus the consensus estimate of $28.5 billion.
A total of 46 hedge funds tracked by Insider Monkey had stakes in Definitive Healthcare Corp.
(NASDAQ:DH), up from 42 funds in the previous quarter. The biggest hedge fund stakeholder
of Definitive Healthcare Corp. (NASDAQ:DH) is Edgar Wachenheim’s Greenhaven Associates
which owns a $335 million stake in the company
https://www.insidermonkey.com/blog/macro-headwinds-dragged-definitive-healthcare-corp-dhin-q4-1125535
10. 3M Company (NYSE:MMM)
Number of Hedge Fund Holders: 52
With over six decades of consistent dividend increase and an attractive PE ratio, 3M Company
(NYSE:MMM) is one of the safest and cheapest stocks to buy now. 3M Company
(NYSE:MMM) recently posted Q1 results. Adjusted EPS in the period came in at $1.97, beating
estimates by $0.37. Revenue in the period came in at $7.7 billion, beating estimates by $190
million.
3M Company (NYSE:MMM) revealed its plans to cut 6,000 jobs as part of a broader
restructuring move.
9. Verizon Communications Inc. (NYSE:VZ)
Number of Hedge Fund Holders: 56
Verizon Communications Inc. (NYSE:VZ) is in the spotlight after posting Q1 earnings report.
Verizon Communications Inc. (NYSE:VZ) added 633,000 subscribers in the quarter. Verizon
Communications Inc. (NYSE:VZ) also saw an addition of 127,000 post-paid phone subscribers,
beating analyst estimates of 116,000.
Adjusted EPS in the quarter came in at $1.20, beating estimates by $0.01. Consolidated revenue
in the quarter fell 1.9% year over year to reach $32.9 billion, missing estimates by $740 million.
8. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 57
Chevron Corporation (NYSE:CVX) is in the limelight after the stock was upgraded in April by
Scotiabank's Paul Cheng to Outperform from Sector Perform. The analyst, who believes
Chevron Corporation (NYSE:CVX) could outperform ExxonMobil, also increased his price
target for the oil giant to $200 from $195. Cheng believes the risk/reward profile for Chevron
Corporation (NYSE:CVX) has improved. Over the past 12 months the stock has gained about
8% through April 25.
As of the end of the fourth quarter of 2022, 57 hedge funds tracked by Insider Monkey had
stakes in Chevron Corporation (NYSE:CVX). The biggest hedge fund stakeholder of Chevron
Corporation (NYSE:CVX) is Warren Buffett’s Berkshire Hathaway who has a $29 billion stake
in the company.
https://www.insidermonkey.com/blog/several-reasons-for-the-outperformance-of-chevroncorporation-cvx-in-q4-1129293
7. Deere & Company (NYSE:DE)
Number of Hedge Fund Holders: 63
Agricultural machinery company Deere & Company (NYSE:DE) ranks x in our list of the very
cheap stocks to buy now. In February, Deere & Company (NYSE:DE) posted its fiscal first
quarter results. GAAP EPS in the quarter came in at $6.55, beating estimates by $1.10. Revenue
in the period increased by about 32.2% year over year to totaled $12.65 billion, beating estimates
by $1.51 billion. In the same month Deere & Company (NYSE:DE) increased its quarterly
dividend by 4.2%.
Out of the 943 hedge funds tracked by Insider Monkey, 63 hedge funds had stakes in Deere &
Company (NYSE:DE). The collective worth of these hedge funds’ stakes is $3.6 billion. The
biggest hedge fund stakeholder of Deere & Company (NYSE:DE) is Michael Larson’s Bill &
Melinda Gates Foundation Trust which has a $1.7 billion stake in the company.
https://www.insidermonkey.com/blog/does-deere-company-de-have-long-term-upside-potential1124179
6. HCA Healthcare, Inc. (NYSE:HCA)
Number of Hedge Fund Holders: 64
HCA Healthcare, Inc. (NYSE:HCA) is one the rise after the company posted strong Q1 results
and gave an upbeat guidance. Net income in the quarter came in at $1.36 billion, or $4.85 a
share, much better than the consensus estimate of $1.18 billion, or $4.05 a share.
Revenue in the quarter jumped 4.3% year over year to total $15.59 billion. HCA Healthcare, Inc.
(NYSE:HCA) also increased its full-year 2023 revenue guidance to a range of $62.5 billion $64.5 billion from $61.5 billion to $63.5 billion.
HCA Healthcare, Inc. (NYSE:HCA) is also partnering with HCA Healthcare and Augmedix to
develop an artificial intelligence (AI)-enabled ambient documentation solutions for acute care
providers.
https://www.insidermonkey.com/blog/should-you-hold-hca-healthcare-hca-1137919
5. Pfizer Inc. (NYSE:PFE)
Number of Hedge Fund Holders: 75
With a PE ratio of 7.29 as of April 25 and a solid pipeline, along with impressive dividend
history, Pfizer Inc. (NYSE:PFE) remains one of the very cheap stocks to buy. Pfizer Inc.
(NYSE:PFE) is also highly popular among elite hedge funds tracked by Insider Monkey. As of
the end of the fourth quarter of 2022, 75 hedge funds had stakes in Pfizer Inc. (NYSE:PFE). The
most notable hedge fund stakeholders of Pfizer Inc. (NYSE:PFE) include
Cliff Asness’s AQR Capital Management, D. E. Shaw’s D E Shaw and Ric Dillon’s Diamond
Hill Capital.
4. The Cigna Group (NYSE:CI)
Number of Hedge Fund Holders: 76
Insurance company The Cigna Group (NYSE:CI) is one of the very cheap stocks to buy
according to both analysts and hedge funds due to the company’s attractive valuation and longterm catalysts. Earlier this month, Raymond James upgraded The Cigna Group (NYSE:CI) to
Strong Buy from Outperform. Raymond James kept its price target of $350 for the stock.
Raymond James believes The Cigna Group (NYSE:CI) is positioned to have a strong 2023.
https://www.insidermonkey.com/blog/is-this-the-best-time-to-initiate-a-position-in-cignacorporation-ci-1113838
3. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 79
Over the past 12 months the share of oil giant Exxon Mobil Corporation (NYSE:XOM) have
gained about 43%. Yet Exxon Mobil Corporation (NYSE:XOM) has an attractive PE ratios its
solid dividend history makes it a tempting buy especially during the current economic volatility.
Earlier this month Exxon Mobil Corporation (NYSE:XOM) was upgraded by UBS to Buy from
Neutral. The firm also increased its price target for Exxon Mobil Corporation (NYSE:XOM) to
$144 from $125. UBS believes Exxon Mobil Corporation (NYSE:XOM) is best positioned to
benefit from the current upcycle because of strong balance sheet and a capital-efficient asset
base.
2. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 82
While QUALCOMM Incorporated (NASDAQ:QCOM) sees a lot of volatility because of the
cyclical nature of the semiconductor industry, the stock looks attractive for the long term. In
March, Susquehanna upgraded QUALCOMM Incorporated (NASDAQ:QCOM), along with
Intel and Skyworks, as the firm believe the semiconductor industry is past its bottom.
Susquehanna upgraded QUALCOMM Incorporated (NASDAQ:QCOM) to Positive from
Neutral.
In addition to growth catalysts, QUALCOMM Incorporated (NASDAQ:QCOM) is also a decent
dividend stock. In March, QUALCOMM Incorporated (NASDAQ:QCOM) announced a 6.7%
increase in its quarterly dividend. The increased dividend is payable in June.
A total of 82 hedge funds tracked by Insider Monkey had stakes in QUALCOMM Incorporated
(NASDAQ:QCOM) as of the end of the fourth quarter of 2022. The most notable shareholder of
QUALCOMM Incorporated (NASDAQ:QCOM) is David Goel and Paul Ferri’s Matrix Capital
Management which owns a $367 million stake.
https://www.insidermonkey.com/blog/is-qualcomm-incorporated-qcom-well-positioned-fordiversification-1140901
1. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 87
Semiconductor giant Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM),
which makes chips for some of the biggest tech companies in the world, including Apple, AMD
and Nvidia, saw its shares under pressure recently after the company gave a weak Q2 revenue
guidance. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) expects its
second quarter revenue to be between $15.2 billion and $16 billion, below $18.16 billion posted
in the same quarter last year.
Susquehanna analyst Mehdi Hosseini had upgraded Taiwan Semiconductor Manufacturing
Company Limited (NYSE:TSM) and increased his price target for TSM to $126 from $76,
saying the worst-case scenario was already priced in. The analyst believe the launch of new
products would help Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM).
https://www.insidermonkey.com/blog/taiwan-semiconductor-manufacturing-company-limitedtsm-grew-27-in-the-first-quarter-1140372