In this article, we discuss the 10 best value stocks to buy now. If you want to read about some more value stocks, go directly to 5 Best Value Stocks to Buy Now.
It has been a wild ride for investors on Wall Street for more than a year. Stocks have experienced extreme polarization since the market fell in the first quarter of 2020 due to the coronavirus. The S&P 500 made a record high in less than a year before declining substantially. Fears of a recession, inflation, destabilization of Europe’s political situation, and other macroeconomic factors have heavily contributed to the market decline.
With the Federal Reserve raising interest rates and the economy potentially slowing, stocks could have more downside. Nevertheless, there is also opportunity if investors invest wisely over the long term given the low valuations.
In a more volatile environment, some investors are turning towards value stocks.
A value stock is generally a stock that’s trading below perceived fundamentals. Many value stocks have a higher than average dividend yield or a low forward P/E ratio. Many value stocks have also fallen out of favor for various reasons.
Although many value stocks stay cheap or decline even further, there could also be opportunities if an investor picks the right stocks.
Todd Rosenbluth, a senior director of ETF and mutual fund research at CFRA said in an interview, “it’s a major shift toward value and away from growth that coincides with the prospect of higher interest rates becoming a reality.” He further added, “People frequently assume that particular industries, including finance, energy, and consumer goods, are more value-oriented.”
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Our Methodology:
In order to identify the best value stocks to buy right now, we are going to use the collective wisdom of nearly 900 hedge funds tracked by Insider Monkey. We started with Vanguard Value Index Fund ETF’s nearly 344 holdings and then sorted these stocks by the number of hedge funds with long positions in each stock. Whenever two stocks have the same number of hedge funds, we used the dollar value of total hedge fund holdings as the tie-breaker. So, according to hedge funds, here are the 10 best value stocks to buy right now:
Best Value Stocks to Buy Now
10. Verizon Communications Inc. (NYSE:VZ)
Number of Hedge Fund Holders: 58
Verizon Communications Inc. (NYSE:VZ), an American telecommunications business, provides data and video service solutions to its clients.
The company is regarded as a value stock by many given its strong dividend. In terms of its dividend, Verizon Communications Inc. (NYSE:VZ) recently increased its dividend by 1.25 cents per share to 64 cents per share. The dividend increase amounted to the 16th annual dividend increase.
Although shares are at multi-year lows, Verizon Communications Inc. (NYSE:VZ) could offer a value opportunity if the economy doesn’t go into a recession and the company successfully grows earnings.
Many hedge funds like the stock. At the end of the second quarter of 2022, 58 hedge funds in the database of Insider Monkey held stakes worth $2.29 billion in Verizon Communications Inc. (NYSE:VZ). When looking at the institutional investors followed by Insider Monkey, Fisher Asset Management, managed by Ken Fisher, holds the biggest position in Verizon Communications Inc. (NYSE:VZ). Fisher Asset Management has $879.83 million position in the stock, comprising 0.62% of its 13F portfolio.
Like Bank of America Corporation (NYSE:BAC), JPMorgan Chase & Co. (NYSE:JPM), and Berkshire Hathaway Inc. (NYSE:BRK-B), Verizon Communications Inc. (NYSE:VZ) is a widely held blue chip stock among hedge funds.
9. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 65
Intel Corporation (NASDAQ:INTC) is an American global tech company and one of the largest providers of microprocessors. Although Intel Corporation (NASDAQ:INTC) is no longer the leader in the sector, semiconductors are vital to modern economies and the market opportunity for semiconductors is expected to grow to $1 trillion by 2030 according to CEO Pat Gelsinger.
Intel Corporation (NASDAQ:INTC) is also spending a lot of money on research and development to regain leadership status and the company is co-investing with various firms to expand its semiconductor manufacturing facilities. It recently announced a $30 billion co-investment with Brookfield Asset Management (BAM).
Although shares could continue to fall if Intel Corporation (NASDAQ:INTC) fails to catch up with its competitors, there is also a value opportunity if Intel Corporation (NASDAQ:INTC) sustainably grows earnings again.
As of the end of Q2 2022, 65 of the hedge funds tracked by Insider Monkey owned stakes in Intel Corporation (NASDAQ:INTC). Those stakes held a collective value of over $2.5 billion.
8. The Procter & Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 71
Headquartered in Ohio, the Procter & Gamble Company (NYSE:PG), is a multinational company that sells branded consumer products. According to analysts Procter & Gamble Company (NYSE:PG) is less vulnerable to cyclical variations because of its focus on personal care and hygiene. As a result of its less economically sensitive businesses and its history of earnings growth, many investors view The Procter & Gamble Company (NYSE:PG) as a value stock.
Among the hedge funds tracked by Insider Monkey, 71 funds were bullish on The Procter & Gamble Company (NYSE:PG) at the end of Q2 2022.
As of September 2, Bridgewater Associates owned 6.74 million shares in The Procter & Gamble Company (NYSE:PG). The hedge fund’s total stake in the company stood at over $970 million, which accounted for 4.11% of its 13F portfolio.
7. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 72
Exxon Mobil Corporation (NYSE:XOM) is an American oil and gas company with a strong dividend history. Given its business strength, Exxon Mobil Corporation (NYSE:XOM) has increased its dividend for 38 consecutive years.
Given the higher gas prices, Exxon Mobil Corporation (NYSE:XOM) has also strong profits. In the second quarter, Exxon Mobil Corporation (NYSE:XOM) delivered EPS of $4.14 and revenue of $116 billion, beating estimates by $0.29 and $3.6 billion respectively.
If oil prices remain high, Exxon Mobil Corporation (NYSE:XOM) could be a value stock given its earnings potential and forward P/E ratio of 8.89. If oil prices decline, however, Exxon Mobil Corporation (NYSE:XOM) will need to successfully transition to renewable energy to remain a value stock.
As of the end of Q2 2022, 72 of the hedge funds tracked by Insider Monkey owned stakes in Exxon Mobil Corporation (NYSE:XOM). Those stakes held a collective value of over $7.4 billion.
6. Comcast Corporation (NASDAQ:CMCSA)
Number of Hedge Fund Holders: 75
The American telecom provider Comcast Corporation (NASDAQ:CMCSA) offers home phone and internet services.
Although shares are down almost 29% year to date, Comcast Corporation (NASDAQ:CMCSA) could be regarded as a value stock given its forward P/E ratio of 9.27.
For its second quarter, Comcast Corporation (NASDAQ:CMCSA) also had a strong quarter with EPS of $1.01, beating estimates by $0.09. Revenue was $30.02 billion, beating estimates by $346.88 million.
According to Bloomberg, Comcast Corporation (NASDAQ:CMCSA)’s NBCUniversal unit is also looking to cut as much as $1 billion from the TV network budget.
As of the end of Q2 2022, 75 of the hedge funds tracked by Insider Monkey owned stakes in Comcast Corporation (NASDAQ:CMCSA. Those stakes held a collective value of over $5.39 billion.
In terms of individual funds, Jean-Marie Eveillard’s First Eagle Investment Management is the largest shareholder in Comcast Corporation (NASDAQ:CMCSA) in our database and holds a stake worth $1.18 billion. The investment covers 3.35% of First Eagle Investment Management’s 13F portfolio.
Alongside Comcast Corporation (NASDAQ:CMCSA), Bank of America Corporation (NYSE:BAC), JPMorgan Chase & Co. (NYSE:JPM), and Berkshire Hathaway Inc. (NYSE:BRK-B) are also widely held blue chip stocks among hedge funds.
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Disclosure. None. 10 Best Value Stocks to Buy Now is originally published on Insider Monkey.
