10 Most Undervalued Mid Cap Stocks to Buy According to Hedge Funds

3. Bath & Body Works Inc. (NYSE:BBWI)

Forward P/E Ratio as of March 5: 9.51

Number of Hedge Fund Holders: 57

Bath & Body Works Inc. (NYSE:BBWI) is a leading specialty retailer. It provides a variety of home fragrance, body care, and soap products through its retail stores and online platforms, both domestically and internationally.

The company’s North American Stores segment generated $2.1 billion in net sales during Q4 2024. While this is a 2% decrease year-over-year, the company shifted its store portfolio to better align with consumer preferences. One development is the transition to a predominantly off-mall retail model, with 57% of its North American stores now located in off-mall locations. In 2024, it opened 106 new stores in North America, with the majority being off-mall locations. It also expanded the overall store square footage by 3% throughout the year.

Its loyalty program has 39 million active members. Bath & Body Works Inc. (NYSE:BBWI) plans to expand its off-mall presence, targeting a 75% off-mall store mix over time. Enhancements to the loyalty program are planned to improve customer engagement and redemption rates. The company is planning capital expenditures between $250 million and $270 million in 2025, with a focus on real estate and technology.