In this article, we discuss 10 Cash-Rich Undervalued Stocks To Invest In.
Currently, big tech and high-growth stocks dominate the stock market, making up a much larger share of the broader market than they have historically. This means many investors may be missing out on value stocks, which are companies that are priced lower but have strong fundamentals. In the past, when this gap between growth and value stocks was this wide, value stocks ended up performing better over the next few years. In case the market changes its tide, investors who are too focused on growth stocks could face higher risks.
Recently, value stocks have started to show signs of a comeback. However, after trailing growth stocks by almost 10% in 2024, value stocks took the lead in January, with the Morningstar US Value Index rising 4.5%, outperforming the 3.9% gain of the Morningstar US Growth Index. The boost came mainly from healthcare stocks, which jumped 6.8%, and financial services stocks, which surged 6.7%. Among different stock categories, mid-sized growth stocks performed the best, rising 6.1%, followed by small growth stocks at 5.1% and large value stocks at 5%. Looking at history, value stocks have performed better than growth stocks in 46% of months over the past 20 years, showing that the market shifts between favoring one type over the other.
Market experts see opportunities in undervalued parts of the market. Ben Inker, a portfolio manager at GMO, is staying cautious as markets hit extreme highs, with Bitcoin topping $100,000 and mega-cap tech stocks driving the broader market’s rally. With so much uncertainty in the economic and policy landscape, he remains skeptical of making bets based on long-term predictions.
Instead, Inker is focusing on “deep value” stocks, which are the cheapest 20% of the US market. He sees some of the biggest discounts in that market segment. He is also looking at small-cap stocks in Japan, especially as US stocks trade at record-high premiums compared to global markets. Inker favors the cheaper equal-weighted S&P index as well, which has historically delivered better long-term returns than the standard market cap-weighted version. Let’s take a look at some of the best cash-rich undervalued stocks below.
A senior executive looking up at a large boardroom filled with the stocks their company manages.
Our Methodology
For this article, we used the Finviz stock screener to identify cash-rich undervalued stocks. We applied a filter to select companies with P/E ratios under 15. Additionally, we used a current ratio (CR) filter of over 2 to identify stocks with strong current assets. CR is a company’s current assets divided by its current liabilities. If the CR is over 1, it means the company has more assets than liabilities, usually because of high cash reserves, receivables, or inventory. After filtering, we manually searched for companies with TTM operating cash flow exceeding $2 billion as of December 31, 2024, and selected 10 stocks with the highest cash reserves. The list below is ranked in ascending order based on TTM operating cash flow. We have also included hedge fund sentiment as of Insider Monkey’s Q4 2024.
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).
10. Aflac Incorporated (NYSE:AFL)
P/E Ratio as of March 3: 11.37
TTM Operating Cash Flow as of December 31, 2024: $2,707,000,000
Number of Hedge Fund Holders: 31
Aflac Incorporated (NYSE:AFL) was founded in 1955 and is headquartered in Columbus, Georgia. It is a health and life insurance company that operates through the Aflac Japan and the Aflac US segments. Aflac US offers coverage for cancer, accidents, disabilities, critical illnesses, hospital stays, dental, vision, and life insurance, while Aflac Japan provides insurance products covering cancer, medical needs, nursing care, life insurance, and savings plans. It is one of the best cash rich stocks to invest in. On February 25, the company announced that it is teaming up with the American Cancer Society to raise awareness about early cancer detection and help people deal with the physical, emotional, and financial challenges that come with it.
Aflac Incorporated (NYSE:AFL) delivered a strong performance in Q4 2024, with revenue surging to $5.4 billion from $3.8 billion in the same period last year. Net earnings for the quarter stood at $1.9 billion, a significant increase from $268 million in Q4 2023. The board also declared a quarterly dividend of $0.58 per share, which was paid on March 3, 2025. Additionally, the company repurchased $750 million in shares and retains authorization to buy back 47.3 million more shares.
According to Insider Monkey’s fourth quarter database, 31 hedge funds were bullish on Aflac Incorporated (NYSE:AFL), compared to 32 funds in the earlier quarter. Ken Griffin’s Citadel Investment Group was the leading stakeholder of the company, with 578,962 shares worth approximately $60 million.
9. D.R. Horton, Inc. (NYSE:DHI)
P/E Ratio as of March 3: 8.97
TTM Operating Cash Flow as of December 31, 2024: $2,989,900,000
Number of Hedge Fund Holders: 60
D.R. Horton, Inc. (NYSE:DHI) is a Texas-based homebuilding company that develops land, constructs, and sells single-family and multi-family homes. On February 19, the company announced that it is raising $700 million through a public offering of 5.500% senior notes set to mature on October 15, 2035. Interest will be paid twice a year, and the deal was set to close on February 26, 2025. The company plans to use the funds for general corporate purposes. It is one of the best cash rich stocks to monitor.
D.R. Horton, Inc. (NYSE:DHI) exceeded analysts’ expectations in Q1 2025, driven by robust housing demand and incentives. The company reported $7.61 billion in revenue, surpassing the $7.08 billion estimate, and earnings of $2.61 per share, above the expected $2.36. It closed sales on 19,059 homes, a slight 1% drop from last year. In the quarter ending December 31, the company generated $647 million in operating cash flow and returned $1.2 billion to shareholders through buybacks and dividends, distributing nearly all generated cash to investors.
According to Insider Monkey’s fourth quarter database, 60 hedge funds were long D.R. Horton, Inc. (NYSE:DHI), compared to 69 funds in the prior quarter. Greenhaven Associates was the biggest stakeholder of the company, with 3.6 million shares valued at $513.3 million.
8. Tenaris S.A. (NYSE:TS)
P/E Ratio as of March 3: 10.09
TTM Operating Cash Flow as of December 31, 2024: $3,209,725,000
Number of Hedge Fund Holders: 33
Tenaris S.A. (NYSE:TS) is a global manufacturer and supplier of steel pipes used in the energy industry and other industrial applications. It produces casings, tubing, line pipes, and specialized pipes for drilling, transport, and construction. The company also offers oilfield services and coating solutions. On December 16, ExxonMobil named Tenaris S.A. (NYSE:TS) its 2024 Supplier of the Year, recognizing its strong performance and reliability. A longtime partner, Tenaris supplies OCTG solutions and Rig Direct services for ExxonMobil’s US operations and supports its drilling projects worldwide, including deepwater exploration.
In the fourth quarter of 2024, Tenaris S.A. (NYSE:TS) reported sales of $2.8 billion, a 17% drop year-over-year and a 2% decline sequentially. The decrease was primarily due to lower volumes and selling prices, though a favorable product mix offset some of the price declines in North America. By the end of 2024, the company recorded an EBITDA of $3.1 billion and a net income of $2.1 billion on total sales of $12.5 billion. Free cash flow reached $2.2 billion, all of which was returned to shareholders through dividends and share buybacks. Tenaris is proposing a 38% increase in the annual dividend per share compared to last year, while retaining a net cash position of $3.6 billion.
According to Insider Monkey’s fourth quarter database, 33 hedge funds were bullish on Tenaris S.A. (NYSE:TS), up from 22 funds in the prior quarter. Israel Englander’s Millennium Management was the top stakeholder of the company, with 2.8 million shares worth $106.4 million.
7. Halliburton Company (NYSE:HAL)
P/E Ratio as of March 3: 9.32
TTM Operating Cash Flow as of December 31, 2024: $3,865,000,000
Number of Hedge Fund Holders: 49
Halliburton Company (NYSE:HAL) is a global energy services company that assists oil and gas companies with operations ranging from well stimulation and cementing to artificial lift and pipeline solutions. On February 26, Halliburton and Sekal AS introduced the world’s first fully automated on-bottom drilling system, combining Halliburton’s LOGIX automation, Sekal’s Drilltronics, and rig automation controls. The technology was successfully used on an Equinor well in Norway, allowing real-time drilling optimization and precise well placement with the push of a button. It is one of the best cash rich stocks to buy.
On February 12, 2025, Halliburton declared a $0.17 per share dividend for Q1 2025, payable on March 26 to shareholders on record as of March 5. The company reported $22.9 billion in revenue for 2024. Halliburton Company (NYSE:HAL) brought in $3.9 billion in operating cash flow and $2.6 billion in free cash flow. Investors received a 60% return on free cash flow, with $1 billion spent on stock buybacks and $600 million paid out in dividends.
According to Insider Monkey’s Q4 data, 49 hedge funds reported owning stakes in Halliburton Company (NYSE:HAL), compared to 38 funds in the previous quarter.
6. Barrick Gold Corporation (NYSE:GOLD)
P/E Ratio as of March 3: 14.55
TTM Operating Cash Flow as of December 31, 2024: $4,491,000,000
Number of Hedge Fund Holders: 44
Barrick Gold Corporation (NYSE:GOLD) ranks 6th on our list of the best cash rich stocks. It is a Toronto-based mining company specializing in gold and copper exploration, development, production, and distribution. Barrick Gold saw a big jump in its gold reserves, which climbed 23% to 17.4 million ounces by the end of 2024, driven by its Reko Diq copper-gold project. After completing a feasibility study, the company added 13 million ounces to its probable reserves. Barrick owns half of the project, while the rest is controlled by Pakistan’s federal and provincial governments.
2024 was a good year for Barrick Gold Corporation (NYSE:GOLD), with adjusted earnings per share jumping 50% to $1.26. The company maintained its quarterly dividend at $0.10 per share and repurchased nearly $500 million in stock. It also added major new gold and copper reserves, bringing total replacements to the equivalent of 73 million ounces of gold. Gold production climbed 15% from the previous quarter, while costs went down. Copper output also hit a new high.
According to Insider Monkey’s Q4 database, 44 hedge funds were long Barrick Gold Corporation (NYSE:GOLD), compared to 42 funds in the prior quarter. Jean-Marie Eveillard’s First Eagle Investment Management was the leading stakeholder of the company, with 46.5 million shares worth $721.8 million.
5. Genmab A/S (NASDAQ:GMAB)
P/E Ratio as of March 3: 13.26
TTM Operating Cash Flow as of December 31, 2024: $7,771,000,000
Number of Hedge Fund Holders: 19
Danish biotechnology company, Genmab A/S (NASDAQ:GMAB) specializes in antibody-based treatments for lymphoma, cervical cancer, multiple myeloma, thyroid eye disease, multiple sclerosis, and hemophilia. On February 20, the company announced that Japan has approved EPKINLY (epcoritamab) to treat follicular lymphoma (FL) in patients who have already tried at least two other treatments. This makes EPKINLY the first injectable antibody in Japan approved for both FL and other similar cancers. The approval is based on studies showing it works safely and effectively.
Genmab A/S (NASDAQ:GMAB) had a great year in 2024, with revenue jumping 31%, supported by the commercial success of its medicines like EPKINLY and TIVDAK. Even after significant investments, like acquiring ProfoundBio for $1.8 billion and spending $500 million on share buybacks, the company still ended the year with nearly $3 billion in cash. This strong financial position means GMAB can continue investing in new treatments while keeping the business growing.
Among the hedge funds tracked by Insider Monkey, 19 funds were bullish on Genmab A/S (NASDAQ:GMAB) at the end of Q4 2024, compared to 14 funds in the prior quarter. Ken Griffin’s Citadel Investment Group was the leading stakeholder of the company, with 3 million shares worth $64.5 million.
4. EOG Resources, Inc. (NYSE:EOG)
P/E Ratio as of March 3: 11.28
TTM Operating Cash Flow as of December 31, 2024: $12,143,000,000
Number of Hedge Fund Holders: 62
EOG Resources, Inc. (NYSE:EOG) is a Texas-based company engaged in the exploration, development, production, and sale of crude oil, natural gas liquids, and natural gas. EOG Resources announced on February 28 that it is taking its shale expertise to the Persian Gulf, collaborating with Bahrain’s Bapco Energies to develop an onshore tight-gas field. Drilling is set to start in the second half of 2024 once the final approvals are in, but production will not commence until 2026. EOG Resources, Inc. (NYSE:EOG) is one of the best cash rich stocks to watch out for.
EOG brought in $6.6 billion in adjusted net income last year, delivering a 25% return on capital. It also returned 98% of its free cash flow to shareholders through dividends and stock buybacks. In 2024, the company invested $6.2 billion in new projects, which helped grow oil production by 3% and total company volume by 8%. EOG Resources, Inc. (NYSE:EOG)’s reserves also increased by 6% to 4.7 billion barrels of oil equivalent, replacing 201% of what was produced, excluding price changes. Driven by this robust performance, the company returned a record $5.3 billion to shareholders, far surpassing its 70% free cash flow return commitment.
Insider Monkey’s fourth quarter database suggests that 62 hedge funds were bullish on EOG Resources, Inc. (NYSE:EOG), up from 56 funds in the last quarter. Harris Associates was the largest position holder in the company, with 8 million shares worth $989.3 million.
3. MetLife, Inc. (NYSE:MET)
P/E Ratio as of March 3: 14.51
TTM Operating Cash Flow as of December 31, 2024: $14,598,000,000
Number of Hedge Fund Holders: 54
MetLife, Inc. (NYSE:MET) is a New York-based global financial services company specializing in insurance, annuities, employee benefits, and asset management. MetLife is the first insurer to add mental health support to its New Hampshire Paid Family Medical Leave (PFML) program, offering TELUS Health’s Cognitive Behavioral Therapy to help employees with anxiety, depression, and more. It ranks 3rd on our list of the best cash rich stocks to buy.
The company reported a net income of $4.2 billion in 2024, a significant increase from $1.4 billion in 2023, with earnings per share rising 228% to $5.94. The return on equity stood at 16.9%, and MetLife, Inc. (NYSE:MET) maintained $5.1 billion in cash and liquid assets as of December 31, 2024, exceeding its target buffer of $3 billion to $4 billion. The company also increased its free cash flow commitment to $25 billion over five years, up from $20 billion. On January 7, 2025, MetLife, Inc. (NYSE:MET) declared a quarterly dividend of $0.545 per share, payable on March 11 to shareholders on record as of February 4.
According to Insider Monkey’s fourth quarter database, 54 hedge funds held stakes in MetLife, Inc. (NYSE:MET), up from 37 funds in the prior quarter. Pzena Investment Management was the biggest stakeholder of the company, with 8.80 million shares worth $720.8 million.
2. Berkshire Hathaway Inc. (NYSE:BRK-B)
P/E Ratio as of March 3: 12.52
TTM Operating Cash Flow as of December 31, 2024: $30,592,000,000
Number of Hedge Fund Holders: 131
Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK-B) is one of the best cash rich stocks to buy, with an impressive $30.6 billion in operating cash flow as of December 31, 2024. Berkshire paid a massive $26.8 billion in taxes in 2024, which is the largest corporate tax payment ever, even more than trillion-dollar tech giants. This accounted for 5% of all corporate taxes collected last year. In his latest investor letter, Buffett urged the US government to utilise the money wisely, help those in need, and keep the financial system stable.
Berkshire Hathaway Inc. (NYSE:BRK-A) saw a huge boost in Q4 earnings, with operating profit rising 71% to $14.5 billion, mainly due to a 302% surge in insurance underwriting. Insurance investment income also grew nearly 50%. For the full year, operating earnings grew 27% to $47.4 billion. Meanwhile, the company’s cash reserves hit a record $334.2 billion as Warren Buffett continues to hunt for his next major investment.
Among the hedge funds tracked by Insider Monkey in Q4, 131 funds were bullish on Berkshire Hathaway Inc. (NYSE:BRK-A), compared to 120 funds in the earlier quarter.
1. United Microelectronics Corporation (NYSE:UMC)
P/E Ratio as of March 3: 10.24
TTM Operating Cash Flow as of December 31, 2024: $87,111,640,000
Number of Hedge Fund Holders: 18
United Microelectronics Corporation (NYSE:UMC) is a Taiwanese semiconductor foundry that manufactures and sells integrated circuits globally. It offers backend and design support services for the mobile communications, IoT, computing, and automotive industries. UMC is one of the best cash rich stocks to watch, with a whopping $87 billion in TTM operating cash flow as of December 31, 2024. UMC earned the highest ‘A’ rating in Climate Change and Water Security from CDP for the third year in a row. The company aims for net-zero emissions by 2050 and 100% renewable energy use.
United Microelectronics Corporation (NYSE:UMC) brought in NT$60.39 billion in revenue for Q4 2024, staying nearly flat from the previous quarter but up 9.9% from last year. The company maintained a solid 30.4% gross margin and reported NT$8.50 billion in net income, with earnings per share at NT$0.68. Cash flow from operations hit NT$32.98 billion, while capital spending reached NT$18.93 billion, leaving NT$14.04 billion in free cash flow. UMC had a net cash inflow of NT$1.59 billion and it plans to repay NT$5.53 billion in bank loans over the next year.
According to Insider Monkey’s fourth quarter database, 18 hedge funds were bullish on United Microelectronics Corporation (NYSE:UMC), compared to 11 funds in the last quarter. Israel Englander’s Millennium Management was the leading stakeholder of the company, with 14.3 million shares worth $93 million.
Overall, United Microelectronics Corporation (NYSE:UMC) ranks first on our list of the best cash-rich undervalued stocks to buy. While we acknowledge the potential of UMC to grow, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than UMC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
