10 Cheap Stocks Hedge Funds Are Talking About

In this article, we discuss 10 cheap stocks hedge funds are talking about. You can skip our comprehensive analysis of the financial markets today and go directly to 5 Cheap Stocks Hedge Funds Are Talking About.

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10 Cheap Stocks Hedge Funds Are Talking About

10. Pfizer Inc. (NYSE:PFE)

Price as of March 11, 2022: $50.27 per share

Saturna Capital, an investment management firm, published its “Amana Funds” third-quarter 2021 investor letter late last year – a copy of which can be downloaded here. For the third quarter of 2021, the Amana Income Fund Investor Shares lost 2.54% and the Institutional Shares lost 2.50%. The Amana Growth Fund Investor Shares returned 0.95%, ahead of the 0.58% return of the S&P 500 Index, as well as the NASDAQ Composite’s dip of 0.22% for the same period. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2022.

Saturna Capital Amana Funds, in its Q3 2021 investor letter, mentioned Pfizer Inc. (NYSE:PFE) and discussed its stance on the firm. Pfizer Inc. (NYSE:PFE) is a New York, New York-based pharmaceutical industry company with a $282.6 billion market capitalization. Pfizer Inc. (NYSE:PFE) has lost 14.87% since the beginning of the year, while its 12-month returns still up by 43.88%. The stock closed at $50.27 per share on March 11, 2022.

Here is what Saturna Capital Amana Funds had to say about Pfizer Inc. (NYSE:PFE) in its Q3 2021 investor letter:

“The Fund’s strongest performer during the quarter was pharmaceutical manufacturer Pfizer Inc. (NYSE:PFE). The company submitted trial data to the FDA for use of its COVID-19 vaccine for younger children, and it is widely expected that the FDA will approve it. Health authorities also began recommending booster shots of the Pfizer vaccine for select populations, further increasing demand for vaccinations.”

9. Wells Fargo & Company (NYSE:WFC)

Price as of March 11, 2022: $48.47 per share

L1 Capital, an investment management firm, published its ‘L1 Long Short Fund Limited’ fourth quarter 2021 investor letter – a copy of which can be downloaded here. A quarterly loss of 1.7% was recorded by the fund for the fourth quarter of 2021, underperforming its S&P ASX 200 AI benchmark by 3.8 percentage points. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

In its Q4 2021 investor letter, the fund mentioned Wells Fargo & Company (NYSE:WFC) and discussed its stance on the firm. Wells Fargo & Company (NYSE:WFC) is a San Francisco, California-based financial services company with a $184.8 billion market capitalization. Wells Fargo & Company (NYSE:WFC) has delivered a 1.02% return since the beginning of the year, while its 12-month returns are 21.27%. The stock closed at $48.47 per share on March 11, 2022.

Here is what L1 Capital Long Short Fund Limited had to say about Wells Fargo & Company (NYSE:WFC) in its Q4 2021 investor letter:

“Detailed, bottom-up stock research remains the investment team’s primary focus and the core driver of portfolio performance. 2021 once again demonstrated the team’s ability to identify ‘winners’ through extensive company and industry research across a diverse range of sectors. Key contributors included Wells Fargo & Company (NYSE:WFC), (due to its) improving compliance and operational performance, falling bad debts and progress towards removal of ‘asset cap’. Exited our holding in June at a >50% gain.”

8. Intel Corporation (NASDAQ:INTC)

Price as of March 11, 2022: $45.83 per share

Third Point Management has published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. A loss of 5.3% was suffered by its flagship Offshore Fund during the final quarter of 2021, bringing its year-to-date returns to 22.7%. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Third Point Management, in its Q4 2021 investor letter, mentioned Intel Corporation (NASDAQ:INTC) and discussed its stance on the firm. Intel Corporation (NASDAQ:INTC) is a Santa Clara, California-based semiconductor company with a $186.6 billion market capitalization. Intel Corporation (NASDAQ:INTC) has lost 11.01% of its value since the beginning of the year, while its 12-month returns are down by 27.14%. The stock closed at $45.83 per share on March 11, 2022.

Here is what Third Point Management had to say about Intel Corporation (NASDAQ:INTC) in its Q4 2021 investor letter:

“2021 was a highly productive year for Intel Corporation (NASDAQ:INTC)‘s new CEO, Pat Gelsinger. Despite the stock’s tepid results, we see a compelling, underappreciated fundamental story. Intel’s “brain drain” – a key part of our thesis when we first sought to help the company confront its long-time underperformance – appears to be reversing. Since joining Intel, Mr. Gelsinger has not only brought back prominent Intel former employees but has also attracted talents from competitors such as AMD, Nvidia, Apple, and, most recently, Micron’s stellar Chief Financial Officer, David Zinsner.

We are encouraged by Intel’s aggressive investment plan, including a recently announced fabrication plant in Ohio and acquisition of Tower Semiconductors. We knew from the start that Intel’s turnaround would be complex and lengthy, and we have been pleased to see Mr. Gelsinger sacrifice near-term earnings for long-term growth.

Finally, after a series of blunders across its PC and Server product lines, Intel is finally receiving good reviews for one of its upcoming processors: Alder Lake. Tom’s Hardware, a preeminent hardware publication, called Alder Lake “a cataclysmic shift in Intel’s battle against AMD’s potent Ryzen 5000 chips.” While this is just one product across a broad lineup, and given it will take time to achieve leadership across them all, we are encouraged by these tangible signs of progress under Mr. Gelsinger’s leadership. With talent returning, an improving product suite, and a willingness to invest for growth, we believe Intel’s prospects have turned the corner. We expect that the company’s upcoming analyst day will be an ideal time for Mr. Gelsinger to articulate the progress he has made and begin to reset expectations for the company.”

7. Comcast Corporation (NASDAQ:CMCSA)

Price as of March 11, 2022: $45.02 per share

Artisan Partners, a high value-added investment management firm, published its “Artisan Value Fund” fourth quarter 2021 investor letter – a copy of which can be downloaded here. A return of 4.48% was recorded by its Investor Class: ARTLX, 4.55% by its Advisor Class: APDLX, and 4.54% was gained by its Institutional Class: APHLX for the fourth quarter of 2021, all below the Russell 1000® Value Index that delivered a 7.77% return, and the Russell 1000® Index that gained 9.78% for the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Artisan Value Fund mentioned  Comcast Corporation (NASDAQ:CMCSA) in its Q4 2021 investor letter and discussed its stance on the firm. Comcast Corporation (NASDAQ:CMCSA) is a Philadelphia, Pennsylvania-based telecommunications company with a $204 billion market capitalization. Comcast Corporation (NASDAQ:CMCSA) shares are down by 10.55% since the beginning of the year, while their 12-month losses stand at 21.14%. The stock closed at $45.02 per share on March 11, 2022.

Here is what Artisan Value Fund had to say about Comcast Corporation (NASDAQ:CMCSA) in its Q4 2021 investor letter:

“Comcast Corporation (NASDAQ:CMCSA) is the leading broadband cable company in North America and a global content producer. Comcast and other cable companies are seeing decreased net subscriber additions as they are lapping tough comparisons from a year ago when net additions were high earlier in the pandemic. Interestingly, churn remains at record low levels—a positive metric that speaks to cable’s value proposition. For Comcast, an additional headwind is a delayed recovery in its theme parks business due to the ongoing pandemic. Additionally, increased investment in 5G by wireless competitors may be weighing on shares. However, 5G is not currently competitive with cable, and based on the economics of 5G capex, it’s unlikely to be competitive for many years, if ever. Cable continues to have a competitive advantage with respect to network speeds and reliability. High recurring revenue, pricing power and low capital intensity make for a powerful economic model that contribute to Comcast’s free cash flow generation, allowing the company to play offense with regards to capital allocation. In summary, Comcast is a well-financed business with a wide competitive moat, that trades cheaply at under 13X our estimate of normalized earnings.”

6. General Motors Company (NYSE:GM)

Price as of March 11, 2022: $41.51 per share

RLT Capital, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. In the eight years since the Fund’s inception, its portfolio has finished the year in negative territory only twice. A return of 1.76% was recorded by the Fund for the fourth quarter of 2021, versus the S&P 500 TR Index which gained 11.03% for the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

RLT Capital, in its Q4 2021 investor letter, mentioned General Motors Company (NYSE:GM) and discussed its stance on the firm. General Motors Company (NYSE:GM) is a Detroit, Michigan-based automotive manufacturing company with a $60.3 billion market capitalization. General Motors Company (NYSE:GM) has sank by 29.20% since the beginning of the year, while its 12-month returns are down by 29.95%. The stock closed at $41.51 per share on March 11, 2022.

Here is what RLT Capital had to say about General Motors Company (NYSE:GM) in its Q4 2021 investor letter:

“Despite my enthusiasm for General Motors Company (NYSE:GM)’s competitive positioning in the years to come, it’s the decidedly unsexy legacy operations that keep GM’s cash registers ringing in the here and now. On that front, investor enthusiasm for the current manufacturing – and financing – of internal combustion engines remains pretty muted by most measures. And understandably so:

-GM’s operations are capital intensive,
-GM’s marketplace is highly competitive (and with excess capacity to boot),
-GM’s supply chain is super complex (e.g., semi shortage, tariffs, etc),
-GM’s labor force is (very) unionized,
-GM’s liabilities are aplenty and long-dated (e.g., warranties, recalls, lawsuits, etc),
-GM’s operations have ample – and unavoidable – commodity exposure (in both raw materials & the resulting impact on product demand/mix), and
-There’s no shortage of debt to consider.

Although that hardly represents a comprehensive accounting of the risks that crowd GM’s disclosures, it’s more than sufficient to obscure the many positives to be found under GM’s hood. Of particular note is GM’s strong showing across seemingly every facet of the changes looming over the broader automotive industry:

-Internal Combustion Engines (ICE): If you think all the talk about electric and/or autonomous vehicles is either total hogwash or still decades into the future . . . GM’s legacy business has you covered. For as long as consumers continue to demand ICE powered vehicles, GM will capably meet said demand. In fact, despite the many headwinds faced by the entire automotive industry in 2021, GM still capably sold ~6.3 million vehicles, and generated ~$113.6 billion of automotive-related revenues…” (Click here to see the full text)

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