In this article, we will discuss the 10 blue-chip stocks to buy at 52-week lows.
Despite the stock market indices hitting record highs this year, some stocks edged lower and are currently languishing near their 52-week lows. While it’s common practice to stay clear of stocks under pressure, it could sometimes be a costly error. When the shares of solid companies become unpopular due to macroeconomic factors and concerns, it presents a buying chance that value investors seize.
Deteriorating macroeconomics was the catalyst behind some blue chip stocks imploding in a year when the overall market traded higher. As the high interest rate environment helped push inflation close to the recommended 2%, some companies felt the blunt even as the S&P 500 rallied up to 17%.
READ ALSO: 8 Best Warren Buffett Stocks to Buy According to Analysts and 8 Best Value Stocks to Invest In According To Warren Buffett.
Companies whose core business depend on consumer purchasing power were the hardest hit as consumers became cautious amid the high inflation and liquidity pressures. Likewise, as the U.S. economy came under pressure amid the high interest rates depicted by a struggling U.S. labor market and manufacturing sector, investors shunned stocks in the consumer cyclical and energy sectors susceptible to deteriorating economic conditions.
Fast forward, the Fed swinging into action and initiating a 50 basis points interest rate cut to try and prevent the U.S. economy from plunging into recession has presented a new lease of life in the markets. According to market bull and head of research at Fundstrat Global Advisors Tom Lee, the Federal Reserve cutting cycle has the potential to set up the market for a strong rally heading into year-end.
Large-cap stocks, hard-hit by high interest, increasingly present undiscovered investment opportunities in a volatile market. Even though a stock that is at or close to a recent low may seem like a risky investment, large-cap stocks frequently reflect market sentiment rather than underlying problems.
With the overall market remaining bullish as interest rates around the globe drop, professional investors are increasingly taking note of the best blue-chip stocks to buy at 52-week lows. Astute investors know these large-cap stocks’ current valuations might not accurately represent their long-term potential, as most appear to be trading at a discount.
According to Canaccord Genuity analyst Michael Welch, the fourth quarter presents one of the best opportunities to buy undervalued stocks, as it is usually the strongest quarter for stocks. The fact that the quarter often ends positively in three of every four years underscores why investors should be bullish about blue-chip stocks that have pulled back significantly and are showing signs of bouncing back.
According to Welch, now is not the time to fight the Fed or the tape as the market shows signs of edging higher. The analyst believes now is the time to position one’s portfolio for a potential fourth-quarter rally. Investors have a unique opportunity to secure higher dividend yields and long-term capital gains when the market recovers and high-quality stocks bottom out after the recent slump.
Nevertheless, Lee of Fundstrat Global Advisors believes investors should be cautious as the uncertainty around the U.S. presidential election could turn out to be a significant headwind. The uncertainty around former president Donald Trump and Kamala Harris’s economic platforms should make the markets weary and curtail significant gains.
Source: Pexels
Our Methodology
To make our list of blue chip stocks at 52-week lows, we ranked large-cap firms trading on the NYSE and NASDAQ whose shares are trading at new 52-week lows or are at most 0-10% higher. The blue-chip stocks at 52-week lows with the highest market capitalization were selected, and their share prices are also mentioned. Finally, we ranked the stocks in descending order based on market cap.
At Insider Monkey, we are obsessed with 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Blue-Chip Stocks to Buy at 52-Week Lows
10. PepsiCo, Inc. (NASDAQ:PEP)
52 Week Range: $ 155.83 – $183.41
Current Share Price: $169.74
Number of Hedge Fund Holders: 65
Market Capitalization as of September 30: $233.19 Billion
PepsiCo, Inc. (NASDAQ:PEP) is a consumer defensive play that engages in manufacturing, marketing, distributing, and selling various beverages and convenient foods. It is one of the blue-chip stocks that felt the full impact of high inflation and a spike in interest rates affecting consumer purchasing power.
While the company has always played second fiddle to Coca-Cola in the multibillion beverage sector, it remains in a strong industry position. The company has been strengthening its position in the energy drink segment by acquiring Rockstar Energy for $3.85 billion in 2020 and investing $550 million in Celsius Holdings in 2022.
Amid the acquisition spree, its sales have improved significantly, with its trailing 12 months’ revenues soaring to $92.1 billion, representing an all-time high and a 41% increase from sales of $65.5 billion in 2012
Additionally, PepsiCo, Inc. (NASDAQ:PEP) is also the market leader in the salty snack market segment. With brands ranging from Lays to Rold Gold, the company’s snacks are a must-have on retailers’ shelves, from grocery stores to convenience stores.
PepsiCo, Inc. (NASDAQ:PEP) is committed to enhancing its operational efficiency and effectiveness by cutting expenses and reinvesting the saved money to grow its scale and fundamental strengths. It expects to achieve its productivity goals by leveraging savings from restructuring efforts.
The firm is also well-placed to take advantage of its global footprint. It accounts for a large share of its earnings from sources beyond the United States. Developing and emerging economies offer significant potential for PEP because of their relatively low consumption per person. The firm has been increasing its presence in these developing/emerging economies through customized distribution strategies and introducing relevant products that add value locally.
Trading at a price-to-earnings multiple of 19.8%, the stock is valued at a discount compared to the industry average of 21.5x. Additionally, PepsiCo, Inc. (NASDAQ:PEP)’s dividend yield of 3% is much higher than the S&P 500 average of 1.2%, affirming why it is one of the best blue chip stocks to buy at 52-week lows for passive income.
By the end of Q2 2024, 65 hedge funds included PepsiCo, Inc. (NASDAQ:PEP) in their portfolios with total stakes amounting to $4.35 billion. Fisher Asset Management emerged as the largest stakeholder, with a position worth $1.22 billion.
Artisan Partners mentioned PepsiCo, Inc. (NASDAQ:PEP) in its Q1 2024 investor letter. Here is what the firm said:
“In the demographics/consumer trends theme, slowing sales volumes led us to focus more on services versus goods. As an example, we sold our position in food and beverage leader PepsiCo given slowing growth in its underperforming core beverage business, one which generates about 60% of revenues. Adding to the uncertainty of growth prospects beverages, PepsiCo was forced by local lawmakers and industry wholesalers to shift to a new distribution model during the rollout of Hard Mtn Dew, a new line of drinks that combines Mountain Dew with malt liquor.”
9. TotalEnergies SE (NYSE:TTE)
52 Week Range: $62.28 – $74.97
Current Share Price: $66.15
Number of Hedge Fund Holders: 18
Market Capitalization as of September 30: $149.01 Billion
TotalEnergies SE (NYSE:TTE) is one of the blue-chip stocks to buy at 52-week lows as the global economy receives a boost from central banks worldwide, cutting interest rates. The multi-energy company produces and markets oil and natural gas.
As global central banks led by the Fed cut interest rates, liquidity should improve, and consumer purchasing power should be boosted. In return, consumers could spend more on oil and natural gas, which should benefit TotalEnergies SE (NYSE:TTE)’s core business.
TotalEnergies SE (NYSE:TTE) is one of the companies that has felt the effects of oil prices plunging from above the $80 a barrel level to lows of $70 a barrel. While the company should remain profitable at this level, it should receive a significant boost as the economic outlook improves on lower interest rates. Strong demand on strong consumer purchasing should allow the company to generate more free cash flow.
Expectations are high that the company will grow its free cash flow by $8 billion by 2030. It is also expected to continue its $8 billion share buyback program as part of its commitment to returning value to shareholders.
While trading at a significant discount with a price-to-earnings multiple of 7, TotalEnergies SE (NYSE:TTE) rewards investors with a 5.18% dividend yield, perfect for generating some passive income on the side, affirming why it is one of the best blue-chip stocks to buy at 52-week lows.
According to Insider Monkey, the number of hedge funds holding stakes in the company remained constant at 18 during Q2 2024, the same as in the previous quarter.
Here is what Aristotle Capital Management, L.L.C., an investment management company, said about TotalEnergies SE (NYSE:TTE) in its first quarter 2024 investor letter:
“During the quarter, we sold our positions 66 and Sysco and positions invested in two new positions: Lowe’s Companies and TotalEnergies SE (NYSE: T.T.E.).
Headquartered in Paris, France, TotalEnergies was founded in 1924 and is one of the world’s largest energy companies. The company operates in over 130 countries and spans the entire energy value chain, producing and marketing oil and biofuels, liquid natural gas (L.N.G.), renewables, and electricity.
To meet the challenge of the energy transition and still ensure reliable energy in the short term, TotalEnergies has implemented a two-pillar strategy: on one end, the company continues to develop low-cost exploration and production projects, with L.N.G. playing a vital role in the transition; on the other, it has been building its Integrated Power segment through investments in renewable power. As such, management plans to invest over 30% of total spending in low-carbon businesses and rank among the world’s top five solar and wind energy providers by 2030. To emphasize this ambition, the company changed its name from Total to TotalEnergies in 2021…” (Click here to read the full text)
8. ConocoPhillips (NYSE:COP)
52 Week Range: $101.30 – $135.18
Current Share Price: $104.72
Number of Hedge Fund Holders: 72
Market Capitalization as of September 30: $121.82 Billion
ConocoPhillips (NYSE:COP) is one of the best blue chip stocks to buy at 52-week lows. A lower interest rate environment spurs capital investment, lowers unemployment, and helps fuel economic growth, which should trigger higher demand for the oil and gas it deals in.
Even with oil prices plunging to lows of $70 a barrel, ConocoPhillips (NYSE:COP) remains well positioned to achieve annualized free cash flow of between $120 million and $130 million in 2024 as long as oil prices average between $60 and $90 a barrel.
Similarly, ConocoPhillips (NYSE:COP) has set out to strengthen its competitive edge and prospects in the oil and gas business with a deal to acquire Marathon Oil. The combined company should produce much free cash flow so that it will be able to increase dividends, buy back stock, and accelerate growth.
The acquisition promises significant synergies with ConocoPhillips (NYSE:COP)’s current asset portfolio. The management has stated that they are optimistic that the deal will be closed by the end of 2024 and that synergies will be achieved by the end of 2025. The $500 million synergy target may have benefits the market hasn’t yet fully acknowledged.
ConocoPhillips (NYSE:COP) would become a stronger company with no impact on its balance sheet or dilution to shareholders in the event of success. Although it’s a big ask, ConocoPhillips recently gave its shareholders a huge capital return. ConocoPhillips intends to pay out at least $9 billion in dividends and buybacks to shareholders in 2024 alone.
ConocoPhillips (NYSE:COP)’s capital allocation strategy demonstrates the company’s dedication to generating shareholder value. Because of its strong balance sheet, the company has a competitive edge that allows it to increase shareholder returns during different cycles in commodity prices. While trading at a P/E of 10, the stock yields 2.98% on dividends.
As of the end of June, Insider Monkey’s database shows that 72 hedge funds are optimistic about ConocoPhillips (NYSE:COP), an increase from 62 in the previous quarter. Eagle Capital Management emerged as the top stakeholder in the second quarter, holding over 14.52 million shares.
Here is what Invesco Growth and Income Fund said about ConocoPhillips (NYSE:COP) in its Q2 2024 investor letter:
“Stock selection in the industrials and health care sectors detracted from relative performance during the quarter. Selection and an underweight in consumer staples also hurt relative return as the sector was one of just two index sectors with a positive return for the quarter. ConocoPhillips (NYSE: C.O.P.): The company announced its acquisition of Marathon Oil in May. The deal is expected to increase earnings and will increase the scale of Conoco’s production assets. However, the stock traded lower on the news.”
7. United Parcel Service, Inc. (NYSE:UPS)
52 Week Range: $123.12 – $163.82
Current Share Price: $134.26
Number of Hedge Fund Holders: 44
Market Capitalization as of September 30: $115 Billion
United Parcel Service, Inc. (NYSE:UPS) is a shipping magnate that engages in the transportation, delivery, and distribution of express letters, documents, small packages, and palletized freight. Shares of the shipping company have plunged significantly close to 52-week lows, attributed to disappointing quarterly performance and weak guidance.
United Parcel Service, Inc. (NYSE:UPS)’s underperformance can be attributed to economic challenges, such as supply chain disruptions and consumer demand changes, affecting the global shipping and logistics industries.
Revenue in the second quarter was down by about 1% to $21.8 billion, missing consensus estimates of $22.18 billion. On the other hand, profits fell 32% to $1.41 billion compared to $2.08 billion delivered in the same period last year. The stock also took a hit on management, narrowing the revenue outlook to $93 billion from a previous guidance of between $92 billion and $94.5 billion.
Amid the disappointing quarterly results and guidance, U.P.S. returning to growth in terms of shipping volume for the first time in nine quarters suggests normalization from the pandemic highs. Additionally, United Parcel Service, Inc. (NYSE:UPS) is one of the blue-chip stocks to buy at 52-week lows as it is well poised to benefit from the lower interest rate environment.
The Fed cutting interest rates by 50 basis points should significantly impact consumer purchasing power, allowing United Parcel Service, Inc. (NYSE:UPS) to enjoy increased shipping volumes and generate more revenues.
At 8.24%, United Parcel Service, Inc. (NYSE:UPS)’s operating margin is increasing. In addition, the company’s strong dividend yield of 4.86% is close to its peak of the last ten years. Because of this, UPS is a desirable choice for income-focused investors. The company has also announced plans to return $500 million to shareholders heading into year-end as part of its buyback plan.
At the end of Q2 2024, 44 hedge funds reported holding stakes in United Parcel Service, Inc. (NYSE:UPS), with a total value of $1.31 billion. As of June 30, Citadel Investment Group was the largest stockholder, with a stake valued at $403.7 million.
Artisan Partners’ Artisan Value Fund stated the following regarding United Parcel Service, Inc. (NYSE:UPS) in its first quarter 2024 investor letter:
“United Parcel Service, Inc. (NYSE: U.P.S.) was a Q4 2023 purchase. When we initiated our position, shares were under pressure due to concerns about its new labor contract diverting volumes and driving up costs, as well as the continued normalization of volumes following COVID-related gains. The stock moved higher after we purchased it but gave up those gains in January when the company reported weaker-than-expected shipping volumes and a decline in revenue in the prior quarter. Despite the long-term growth tailwinds from the secular shift toward e-commerce, the shipping business is still cyclical, so disappointments will happen. However, we welcomed the market’s short-term focus as it provided us an opportunity to purchase U.P.S. at an undemanding valuation of less than 11X our view of normalized earnings. U.P.S. is a good transport operation that easily earns its cost of capital, generates significant free cash, has a wide economic moat, has a strong financial profile and pays an attractive dividend yielding 4%. With the new 5-year labor agreement completed, we believe U.P.S. can focus on regaining lost volume and improving its cost structure.”
6. Boeing Co (NYSE:BA)
52 Week Range: $151.65 – $267.54
Current Share Price: $155.65
Number of Hedge Fund Holders: 42
Market Capitalization as of September 30: $94.22 Billion
Boeing Co (NYSE:BA) is one of the blue-chip stocks that has been battered, plunging close to its 52-week lows due to safety concerns over its planes. The company’s sentiment on Wall Street has taken a hit in the aftermath of a door falling off an airplane, a spacecraft getting stranded, and workers striking at its commercial aircraft business.
In its second-quarter financial report, Boeing Co (NYSE:BA) revealed a $4.3 billion quarterly cash burn, a $2.33 per share loss, and a revenue miss. Following a slate of disappointing financial results and operational inefficiencies, Boeing has swung into action, announcing its C.E.O. Dave Calhoun would be retiring, and Robert K. “Kelly” Ortberg, a former executive at Rockwell Collins, taking over as C.E.O.
Management change comes on. Boeing Co (NYSE:BA) announced the biggest increase in 737 deliveries in June, with the company well poised to deliver up to 38 airplanes a month by yearend. Given that the company’s market position on airplane production and delivery is not expected to disappear anytime soon, it remains one of the best blue chip stocks to buy at 52-week lows as it addresses issues that have beleaguered it in recent years.
Management has already laid out plans to achieve $10 billion in free cash flow between 2025 and 2026 as it ramps up the deliveries of 737 and 787 planes. The company is already reaping the rewards of improved airplane production by activating its third production line.
By the end of the second quarter of 2024, a notable 42 out of the 912 hedge funds tracked by Insider Monkey had invested in Boeing Co (NYSE:BA). This indicates significant interest and confidence in Boeing’s potential among these institutional investors.
5. BP p.l.c. (NYSE:BP)
52 Week Range: $30.52 – $40.84
Current Share Price: $31.42
Number of Hedge Fund Holders: 38
Market Capitalization as of September 30: $83.75 Billion
BP p.l.c. (NYSE:BP) is an integrated oil and gas company that produces and distributes oil and gas. It is one of the oil and gas heavyweights trading close to 52-week lows in the aftermath of oil prices falling under pressure and dropping to $70 a barrel.
Investors carefully monitor the energy behemoth as it negotiates a challenging environment that includes shifting oil prices, regulatory constraints, and the global shift to renewable energy sources. The 52-week low represents a pivotal point for BP p.l.c. (NYSE:BP), as investors evaluate the company’s tactical actions to steady and expand during the industry’s revolutionary phase.
The company has already inked a strategic partnership with Palantir Technologies that will allow it to leverage artificial intelligence technology. The push is part of the company’s bid to enhance its exploration and production ability using revolutionary technology.
BP p.l.c. (NYSE:BP) also plans to increase its footprint in India as it looks into more business opportunities in the quickly developing market. The company has confirmed strategic interest in the nation’s oil and gas industry to boost its stagnant oil and gas production. India is the third-largest oil importer and consumer in the world. It has also announced plans to sell off underperforming assets, starting with wind-generating holdings in the U.S. valued at about $2 billion.
Additionally, BP p.l.c. (NYSE:BP) delivered impressive second-quarter results with a free cash flow of $8.1 billion, which allowed it to reduce its net debt by $1.4 billion. The net profit in the quarter was $2.8 billion, which was above analysts’ expectations of $2.6 billion. The better-than-expected results resulted in the company increasing its dividend by 10% to $8 cents a share.
While the stock has underperformed, dropping close to its 52-week lows, it remains one of the best blue-chip stocks to buy at 52-week lows, going by its 6.11% dividend yield.
According to Insider Monkey’s database for the second quarter of 2024, 38 hedge funds held stakes in BP p.l.c. (NYSE:BP), a slight decrease from the 40 hedge funds that held stakes in the previous quarter. Despite this minor drop, the total value of these stakes remains substantial, exceeding $1.48 billion. This indicates that while a few hedge funds may have adjusted their positions, many institutional investors continue to see value in BP p.l.c. (NYSE:BP)’s stock.
4. Occidental Petroleum Corporation (NYSE:OXY)
52 Week Range: $49.75 – $71.19
Current Share Price: $51.79
Number of Hedge Fund Holders: 62
Market Capitalization as of September 30: $47.44 Billion
Occidental Petroleum Corporation (NYSE:OXY) is an energy juggernaut that engages in acquiring, exploring, and developing oil and gas properties. It stands out as one of the best blue chip stocks to buy at 52-week lows as it leverages A.I. tools to analyze geological data and, more precisely, identify possible oil and gas reserves.
Occidental Petroleum Corporation (NYSE:OXY) is a cyclical stock whose performance is affected by the economic outlook influencing oil and gas demand. The company’s earnings and share prices are always susceptible to factors influencing oil prices, such as a recession or declining demand.
While oil prices have tumbled significantly, the company’s outlook remains solid, especially with the Federal Reserve cutting interest rates expected to bolster economic growth. Occidental Petroleum Corporation (NYSE:OXY)’s balance sheet is robust and continues to strengthen as it concentrates on lowering its debt load.
In its earnings call for the second quarter of 2024, Occidental Petroleum Corporation (NYSE:OXY) demonstrated strong performance, generating $1.3 billion in free cash flow and exhibiting its highest quarterly production in four years. Earnings totaled $1.03 a share, beating analyst estimates by 33.8%, as revenues totaled $6.88 billion.
Furthermore, the business reported making noteworthy progress toward its $4.5 billion debt reduction goal, cutting $3 billion from its principal debt in the third quarter of 2024.
Occidental Petroleum Corporation (NYSE:OXY) management projects that its annualized cash flow could rise by as much as $260 million for every $1 increase in crude oil prices per barrel. This implies that an increase in oil prices of $4 per barrel could generate over $1 billion in additional cash flow, which is an amazing accomplishment given that its free cash flow over the previous 12 months was only $6 billion.
While trading at a price-to-earnings multiple of 11, Occidental Petroleum Corporation (NYSE:OXY) is one of the blue-chip stocks to buy at 52-week lows for generating passive income on the side owing to its 1.72% dividend yield.
By the end of the second quarter of 2024, the number of hedge funds holding stakes in Occidental Petroleum Corporation (NYSE:OXY) rose to 62, up from 61 in the previous quarter. This increase, though modest, reflects a growing interest in Occidental Petroleum among institutional investors. The collective value of these stakes is substantial, exceeding $18.50 billion.
3. The Hershey Company (NYSE:HSY)
52 Week Range: $178.82 – $211.92
Current Share Price: $193.24
Number of Hedge Fund Holders: 39
Market Capitalization as of September 30: $39.1 Billion
The Hershey Company (NYSE:HSY) is a consumer defensive company that manufactures and sells confectionery products and pantry items. It offers various products, including chocolate, non-chocolate confectionery, gum, and mints.
The Hershey Company (NYSE:HSY) has been under pressure recently. The stock price has been range-bound due to rising cocoa prices and declining chocolate demand. Nevertheless, Hershey’s Milk Chocolate Bar and Hershey’s Kisses have solidified the company’s position as an American consumer goods market leader.
The Hershey Company (NYSE:HSY) has also started pushing its most well-known confection brands into international markets as it looks to tap new sales opportunities and diversify its revenue stream. It is also in the process of developing a healthier snack line, which includes popcorn and pretzels, as it looks to cater to health-conscious clients. Thus, beyond Hershey’s domestic chocolate operations, there are reasons to be optimistic about the future.
Currently, The Hershey Company (NYSE:HSY)’s price-to-sales ratio (P/S) is approximately 3.58 against a five-year average of 4.1. The company’s price-to-earnings ratio (P/E) is 22.5, which is lower than the five-year average of 25.5. The stock appears reasonably priced when looking at more conventional metrics. Hershey Company stands out as one of the best blue chip stocks to buy at 52-week lows, offering a 2.8% dividend yield, significantly higher than its five-year average of 2%.
Furthermore, by the end of Q2 2024, 39 hedge funds had invested a total of $506 million in the company, according to Insider Monkey’s database. Holocene Advisors emerged as the leading stakeholder for that quarter.
2. Humana Inc. (NYSE:HUM)
52 Week Range: $276.80 – $530.54
Current Share Price: $279.45
Number of Hedge Fund Holders: 71
Market Capitalization as of September 30: $33.64 Billion
Humana Inc. (NYSE:HUM) is one of the best blue chip stocks to buy at 52-week lows as it continues to concentrate on Medicare plan offerings instead of private sector insurance. The company’s competitive edge stems from being a leading provider of Medicare Advantage plans, primarily serving the elderly.
Humana Inc. (NYSE:HUM) continues to be at the forefront of one of the fastest-growing segments of US medical insurance, given US demographic trends and the growing uptake of Medicare Advantage plans among eligible individuals.
The management has attributed disappointing financial results to rising inpatient utilization rates and Medicare Advantage medical costs in recent quarters. Nevertheless, Humana Inc. (NYSE:HUM) has made significant investments in Medicare Advantage, the government-funded program that provides senior citizens with health benefits as they age.
Because Medicare Advantage accounts for the majority of revenue, the company’s earnings are susceptible to higher utilization rates among seniors. Humana has managed these pressures by negotiating with providers and using clinical appropriateness despite rising inpatient costs.
Humana Inc. (NYSE:HUM)’s Medicare business has experienced a notable upswing, contributing to an exceptional performance in the second quarter of 2024 that exceeded forecasts. Revenues in the quarter were up by 10% to $29.5 billion, but earnings per share dropped to $5.62 from $7.66 a year ago in the same quarter.
The business maintained its guidance for benefit ratios and full-year adjusted earnings per share (EPS) for 2024, indicating a promising future for growth, especially in the Medicaid and CenterWell businesses. Moreover, Humana increased its revenue forecast by $3 billion due to growing membership.
Following the steep pullback, the stock trades at a discount relative to the industry standards with a price-to-earnings multiple of 13 while offering a 1.27% dividend yield.
As of Q2 2024, Insider Monkey reported that 71 out of the 912 hedge funds they track held positions in Humana Inc. (NYSE:HUM). Notably, Eagle Capital Management emerged as a leading hedge fund investor with a significant stake in the company, valued at over $1.2 billion.
Diamond Hill Mid Cap Strategy stated the following regarding Humana Inc. (NYSE:HUM) in its Q2 2024 investor letter:
“Other top Q2 contributors included Humana Inc. (NYSE:HUM) and Boston Scientific Corporation. Shares of health insurance company Humana rebounded from their recent downturn, which was tied to investors’ concerns about weaker-than-expected Medicare Advantage rates for 2025 and was the byproduct of an overall difficult operating environment.”
1. Halliburton (NYSE:HAL)
52 Week Range: $27.53 – $43.85
Current Share Price: $28.99
Number of Hedge Fund Holders: 41
Market Capitalization as of September 30: $25.6 Billion
Halliburton (NYSE:HAL) is one of the best blue-chip stocks to buy at 52-week lows as a provider of crucial oilfield services. The company provides products and services to the energy industry worldwide to support oil and natural gas exploration, development, and production.
The stock has closed to 52-week lows as inflation and aggressive interest rate hikes dampened the energy market outlook. The high interest rates made it challenging for some companies to ramp up oil and gas exploration and production from which Halliburton (NYSE:HAL) generates most of its revenues.
The company delivered mixed second-quarter results, with revenues almost flat at $5.83 billion as earnings per share totaled $0.8. It declared a quarterly dividend of $0.17 per share for the third quarter of 2024, demonstrating its commitment to returning value to shareholders
Nevertheless, Halliburton (NYSE:HAL) delivered a return to equity of 29.97%, which indicated efficient utilization of shareholder investments. Additionally, the company ended with a net margin of 11.61%, affirming solid profitability, effective cost management, and maximization.
Halliburton (NYSE:HAL) is actively developing new technologies and investing in them to increase operational effectiveness. This includes implementing artificial intelligence (A.I.) applications and digital solutions, particularly for well-completion and production enhancement. This fits in with the energy industry’s broader trend toward automation and digitalization.
Acknowledging the increasing need for sustainable energy solutions, the company is also venturing into the renewable energy domain. Halliburton is using its knowledge in geothermal energy and other fields to establish itself in this rapidly expanding market. This calculated action shows a dedication to diversification and an understanding of the energy industry’s trend towards sustainability.
While trading at a price-to-earnings multiple of 7, Halliburton (NYSE:HAL) offers a 2.37% dividend yield, ideal for generating passive income. By the end of the second quarter, 41 hedge funds held positions in the company’s stock, with their collective stakes valued at $507.70 million. Point72 Asset Management is the largest shareholder, owning shares worth $103.36 million as of June 30.
While we acknowledge the potential of HAL, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than HAL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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