11 Oversold Blue Chip Stocks to Buy According to Hedge Funds

2. Merck & Co., Inc. (NYSE:MRK)

% Decline Over Past 1 Year: ~22%

Number of Hedge Fund Holders: 91

Market Cap as on March 7: $239.0 billion

Merck & Co., Inc. (NYSE:MRK) operates as a healthcare company. Nico Chen, an analyst from DBS, maintained a “Buy” rating on the company’s stock and the associated price target remains the same at $100.00. The rating is backed by factors highlighting the company’s healthy market position and growth potential. The analyst further added that a significant driver of this favourable outlook is Keytruda, Merck & Co., Inc. (NYSE:MRK)’s blockbuster drug, which has placed the company as a leader in oncology.

Furthermore, another critical factor is the promising development of sac-TMT, which is an antibody-drug conjugate for treating advanced non-small cell lung cancer, which has received a Breakthrough Therapy Designation from the US FDA. The analyst opines that this designation is expected to expedite its market entry and drive Merck & Co., Inc. (NYSE:MRK)’s share price. Overall, the rating stems from the company’s strong financial outlook, with an anticipated ramp up of net income growth and a comparatively low risk of patent expiries versus the industry peers.

GreensKeeper Asset Management, an investment management company, released its Q3 investor letter. Here is what the fund said:

“Merck & Co., Inc. (NYSE:MRK) was our second-largest detractor this quarter, declining -8.3%. MRK’s leading HPV vaccine, GARDASIL 9, faced challenges internationally due to inventory buildup within its Chinese distributor, which is expected to reduce shipments for the remainder of 2024. Despite this short-term impact, the long-term outlook for GARDASIL 9 remains promising. Meanwhile, the company’s $27 billion Keytruda cancer juggernaut continues to grow at a healthy clip, powering earnings growth.”