On March 4, David Katz, Chief Investment Officer at Matrix Asset Advisors, joined ‘The Exchange’ on CNBC to share his perspective on the current state of the bull market and what February’s mixed action and sector rotation might signal for the rest of the year. Katz acknowledged that while people might not want to hear it, the volatility seen in February is likely to persist throughout the year, with both upside and downside movements. He emphasized that this creates opportunities for investors but also necessitates caution. Katz highlighted several positive factors supporting the market, which included a strong economy and solid corporate performance. However, he expressed concerns about certain policies from the administration, such as tariffs, immigration, and the relationship with the Fed. While these issues have been largely ignored by the market so far, Katz warned that they could eventually lead to a 3-5% correction. Despite this, he remained optimistic about the economy’s ability to navigate these challenges and recommended buying into market dips rather than chasing rallies.
To support his sentiment, Katz pointed to companies that have already experienced significant corrections and are positioned to perform well regardless of broader market movements. He highlighted their strong fundamentals, attractive valuations (most trading at under 13-14 times earnings), and good outlooks. He also noted that last year’s market leaders have slowed significantly, while sectors that underperformed are beginning to show meaningful improvement, a trend he expects to continue. This sector rotation suggests that investors should be prepared to adapt their strategies as different sectors gain momentum throughout the year.
Given this context, we’re here with a list of the 12 most undervalued large cap stocks to buy now.
Methodology
We used the Finviz stock screener to compile a list of the top stocks trading between $10 billion and $200 billion. We then selected stocks with a forward P/E ratio under 15 and made a list of 12 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
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).
12 Most Undervalued Large Cap Stocks to Buy Now
12. Charter Communications Inc. (NASDAQ:CHTR)
Forward Price-to-Earnings Ratio as of March 4: 9.77
Number of Hedge Fund Holders: 71
Charter Communications Inc. (NASDAQ:CHTR) is a US broadband connectivity and cable operator. It provides internet, video, mobile, and voice services to both residential and commercial customers, alongside advanced business and wholesale communication solutions.
Its Spectrum Mobile business was the star performer in 2024. Spectrum Mobile is the company’s mobile phone service that uses its existing network infrastructure to provide cellular service. This is bundled with its internet services. It added over 2 million new mobile lines in 2024, which positions Spectrum Mobile as the fastest-growing mobile provider in the US. One reason behind this growth is its seamless integration with Charter Communications Inc.’s (NASDAQ:CHTR) existing broadband services. This converged connectivity, which is available across 100% of its network, allows customers to experience a unified service.
As of Q4 2024, Spectrum Mobile had penetrated ~8% of Charter Communications Inc.’s (NASDAQ:CHTR) total passings. It emphasizes the value proposition of bundling Spectrum Mobile with its broadband services. These packages often result in substantial cost savings for customers, which makes them an attractive option.
Despite market skepticism and a delayed merger, Brennan Asset Management sees Charter Communications Inc. (NASDAQ:CHTR) making operational progress, particularly in customer retention and strategic bundling. It stated the following in its Q4 2024 investor letter:
“Charter Communications, Inc. (NASDAQ:CHTR): Still Hated…But Progress Continues and CHTR/Liberty Broadband (LBRDK) Terms Finalized: We discussed Charter (CHTR) in our 2024 Q1 letter and then reviewed CHTR’s offer to repurchase Liberty Broadband shares in our Q3 2024 letter. CHTR continues to show operational progress. While there is likely to be some continued Affordable Connectivity Program (ACP) noise during the early part of 2025, CHTR has done an admirable job in retaining customers, and total losses are far lower than originally feared. While the stock (frustratingly) will bounce around with small changes in quarterly broadband additions/losses versus expectations, we still believe that CHTR’s ultimate success will come down to whether they can create packages that encourage customers to jointly consider broadband and cell phone prices rather than mentally segregating the two bills. As we previously discussed, we are cautiously optimistic that CHTR’s more aggressive broadband/bundling packages can do just that. We also believe that CHTR’s streaming aggregation product could be another positive differentiator. During its third quarter conference call, CHTR announced that it did not expect to be a meaningful participant in the Broadband Equity, Access, and Deployment (BEAD) program. This cutback in expansionary capex after 2025 likely means a more rapid return to aggressive share repurchases, especially once the company’s network investments are completed in 2027.
Separately, CHTR and LBRDK came to terms with the merger proposal that we discussed in our third quarter letter. The final deal was probably viewed somewhat disappointingly by LBRDK investors, considering that the exchange ratio was closer to CHTR’s original proposal — 0.236 shares of CHTR for each LBRDK share with GCI Communications (GCI) not included versus LBRDK’s proposal for 0.29 CHTR/LBRDK including GCI. That said, the part that most frustrated some was disclosure that the LBRDK/CHTR deal will not close until June 2027. This later closing was designed so LBRDK could sell down CHTR and deleverage prior to the merger, but this also means that LBRDK likely will trade at a discount until closer to deal closing. While we understand the criticisms, CHTR was the only likely buyer for LBRDK, and this deal will simplify CHTR’s capital structure and ultimately allow a collapse of the LBRDK discount.”
11. Allstate Corp. (NYSE:ALL)
Forward Price-to-Earnings Ratio as of March 4: 11.4
Number of Hedge Fund Holders: 71
Allstate Corp. (NYSE:ALL) is a US and Canadian insurance provider. It delivers a range of property and casualty, health, and protection products (which includes auto, home, life, and supplemental) insurance. It also provides consumer protection plans, roadside assistance, and analytics solutions. These are distributed through agents, online platforms, and various partnerships.
The company’s Protection Plans segment offers protection for consumer electronics and appliances. The segment saw policy growth in 2024 and now covers ~160 million policies, which is up by 60 million since 2019. This refers to an increase in the number of active insurance contracts the company holds. In Q4 2024, revenues for this segment reached $528 million, which was a 20.3% increase year-over-year. It hit a revenue of ~$2 billion in the full year 2024, which shows a 23.9% CAGR since 2019. This was driven by both domestic and international growth.
Allstate Corp. (NYSE:ALL) is actively investing in Protection Plans, which is highlighted by the acquisition of Kingfisher to enhance mobile phone protection. Kingfisher specializes in mobile device lifecycle optimization by extending device lifespan through services like refurbishment and reuse.
Diamond Hill Large Cap Concentrated Strategy stated the following regarding The Allstate Corporation (NYSE:ALL) in its Q2 2024 investor letter:
“Among our bottom Q2 contributors were Abbott Laboratories, ConocoPhillips and The Allstate Corporation (NYSE:ALL). Allstate, one of the US’s largest auto and homeowners’ insurance providers, has seen the pace of premium price increases decelerate, weighing on investor sentiment around the stock. However, the company’s underlying fundamentals are intact, margin expansion should continue through the year, and the outlook remains constructive.”
10. Verizon Communications Inc. (NYSE:VZ)
Forward Price-to-Earnings Ratio as of March 4: 9.23
Number of Hedge Fund Holders: 74
Verizon Communications Inc. (NYSE:VZ) is a global telecommunications leader that offers an array of communication, technology, information, and entertainment services. Through its Consumer and Business segments, it provides wireless and wireline services. These include mobile, broadband, fiber-optic connectivity, and enterprise solutions. It caters to individuals, businesses, and government entities.
The company is currently focused on its “AI Connect” initiative. It provides the infrastructure and connectivity solutions needed for businesses to deploy and utilize AI workloads. The company is pursuing it to capitalize on the growing AI infrastructure market, which is projected to see over $1 trillion in investments in the next decade. The initiative uses the company’s existing fiber network and edge computing capabilities. It already has a $1 billion deal funnel as of Q4 2024, with major players like Google and Meta using Verizon Communications Inc.’s (NYSE:VZ) network for AI workloads.
On January 27, Bernstein analysts decreased their price target for Verizon Communications Inc. (NYSE:VZ) from $48 to $46, while reaffirming a Market Perform rating. This adjustment came despite recognizing the company’s strong 2024 performance, which was characterized by growth in postpaid and fixed wireless access (FWA) subscribers, particularly in Q4 2024. It made an overall revenue of $35.68 billion in Q4, which represented a 1.57% year-over-year improvement.
Third Point Management sees Verizon Communications Inc.’s (NYSE:VZ) acquisition of Frontier Communications as a strategic move that validates the value of high-end fiber networks and positively impacts the telecom sector. It stated the following in its Q3 2024 investor letter:
“While some economic activity has been showing signs of slowing, the defensive composition of the current high yield market with a high mix of higher quality credit and short duration has let the rates tailwind overwhelm such concerns. The lowest quality sectors of the market have performed best, fueled by both soft/no landing expectations, as well as two positive events in the beleaguered telecom space. Telecom/cable have been poor performers year to date due to overhang from the growth of FWA (aka “wireless cable”) and increased fiber building, however the sector re-rated materially on two deals. Second, Verizon Communications Inc. (NYSE:VZ) announced a deal to acquire Frontier Communications (FYBR), a transaction which the fund benefited from by virtue of its investment in FYBR debt. This transaction, aimed at increasing’s VZ fiber footprint, has led to broad revaluation of fiber retail networks that we think is appropriate. While we continue to expect to see FWA rapidly erode non-upgraded cable and especially copper’s share of the low-end broadband market, the VZ deal underscores the value of the higher end footprint.”
9. JD.Com Inc. (NASDAQ:JD)
Forward Price-to-Earnings Ratio as of March 4: 9.75
Number of Hedge Fund Holders: 78
JD.Com Inc. (NASDAQ:JD) is a Chinese supply chain-based technology and service provider. It offers products like electronics, home appliances, and general merchandise. It also offers online marketplace services, marketing solutions, and omni-channel capabilities. Beyond its core retail operations, it develops and manages logistics infrastructure, provides integrated technology and supply chain solutions, and offers online healthcare services.
JD Logistics is a key component of the company’s overall success and is building a strong logistics network. In Q3 2024, the segment’s revenue grew by 7% year-over-year, with internal revenue up 8% and external revenue up 6%. This growth shows the effectiveness of JD Logistics’ efforts to expand its reach and service both JD.Com Inc. (NASDAQ:JD) and external clients. The company improved its profitability in Q3 through this segment. Non-GAAP operating income saw a 624% year-over-year increase.
JD Logistics is expanding globally with doubled warehouse capacity anticipated by 2025. It’s investing heavily in smart technologies like AI and automation to enhance efficiency and customer experience. These include such intelligent warehousing systems and 5G-powered smart logistics parks.
Ariel Global Fund is highly positive on the company due to its strong performance driven by Chinese stimulus, improved consumer spending, successful diversification strategies, and the ability to capitalize on growth opportunities like home appliance trade-in programs. It stated the following regarding JD.Com Inc. (NASDAQ:JD) in its Q3 2024 investor letter:
“China-based E-commerce company, JD.com, Inc. (NASDAQ:JD) was the top contributor in the quarter as the People’s Bank of China’s (PBOC) comprehensive stimulus measures bolstered investor confidence in the Chinese economy. The improving economic sentiment is fueling consumer spending which benefits the company’s retail operations. Additionally, the company’s strategic decision to diversify general merchandise product offerings, expand its third-party marketplace business and monetize advertising streams has contributed to consecutive quarterly earnings beats. JD.com is also poised to capitalize on the home appliance trade-in program, which is one of its largest product categories. Given the favorable market environment, the company’s strategic positioning and supply chain efficiency improvements, we continue to like its long-term growth prospects.”
8. Comcast Corp. (NASDAQ:CMCSA)
Forward Price-to-Earnings Ratio as of March 4: 8.46
Number of Hedge Fund Holders: 80
Comcast Corp. (NASDAQ:CMCSA) is a media and technology company that operates across sectors like residential and business connectivity, media, studios, and theme parks. Through its segments, it delivers broadband, wireless, and video services. It also manages national and international television networks, produces and distributes film and television content, operates theme parks worldwide, and provides streaming platforms.
The company’s Residential Connectivity grew by 3% year-over-year in 2024 and drove its overall growth. This segment provides services to connect homes to the internet and other communication networks, primarily broadband internet. However, Q4 2024 saw a loss of 139,000 broadband subscribers, which reflected intense market competition. To counter this, Comcast Corp. (NASDAQ:CMCSA) is prioritizing its Xfinity Mobile wireless service.
Xfinity Mobile wireless service is the company’s mobile phone service that uses Verizon’s network and Comcast’s WiFi hotspots to provide cellular connectivity to its customers. With 7.8 million lines and 12% broadband customer penetration, it has growth potential. The company will bundle mobile with premium broadband and enhance mobile speeds via the WiFi network.
7. Schlumberger (NYSE:SLB)
Forward Price-to-Earnings Ratio as of March 4: 11.89
Number of Hedge Fund Holders: 80
Schlumberger (NYSE:SLB) is a global technology provider for the energy industry. It offers digital, reservoir, well construction, and production systems. It delivers services spanning field development, hydrocarbon production, carbon management, and well optimization. This includes subsurface evaluation, drilling, completion, and production enhancement.
The company’s Digital and Integration segment’s revenue reached $1.2 billion in Q4 2024, which was a 6% sequential increase. This segment offers digital energy solutions and integrates them into operations. Its growth was driven by a 10% rise in Digital revenue. For the full year 2024, Digital revenue hit $2.44 billion, which was a 20% increase. Customers are adopting cloud computing, AI, and digital operations to improve efficiency, which is contributing to the segment’s success.
Schlumberger (NYSE:SLB) expects Digital revenue to continue its growth trajectory in 2025. This will be supported by ongoing demand for digital operations, data, and AI solutions. While revenue from APS (Asset Performance Solutions) is expected to decline due to the Palliser divestiture (sale of its interest in the Palliser APS project in Canada), the performance of the Digital business will drive the company’s overall growth.
Ariel Focus Fund initiated a position in the company, viewing its current market weakness as a buying opportunity based on its strong fundamentals and expected medium-term demand growth. It stated the following regarding Schlumberger (NYSE:SLB) in its Q4 2024 investor letter:
“Also in the quarter, we initiated a position in Schlumberger Limited (NYSE:SLB), the largest oilfield services company in the world by revenue. SLB provides equipment, services, and digital tools to help oil and gas producers operate more efficiently, including reservoir characterization, rig and well construction and production enhancement. We believe the company’s scale and technical expertise serves as a key differentiator. Weak near-term demand, an oil glut, falling commodity prices and concerns about future spending amid a global shift to renewable energies presented an attractive entry point. We believe there are tailwinds supporting rising demand over the medium-term, as national oil companies invest in long-cycle projects to grow capacity and address the natural decline of production. Additionally, we expect SLB will continue to evolve their capabilities to help clients with rising energy needs going forward.”
6. Goldman Sachs Group Inc. (NYSE:GS)
Forward Price-to-Earnings Ratio as of March 4: 13.4
Number of Hedge Fund Holders: 81
Goldman Sachs Group Inc. (NYSE:GS) provides financial services across investment banking, asset and wealth management, and platform solutions. Through its three main segments, it offers strategic advisory, trading, and underwriting services, manages assets across various asset classes, provides wealth management and private banking, and delivers digital financial solutions.
The firm’s Asset & Wealth Management managed a record $3.1 trillion in assets in Q4 2024. This segment manages investments and provides financial advice for individuals and institutions to grow their wealth. The segment’s stable fee-based income is crucial for the company’s market valuation. The firm is shifting away from equity and debt investments to focus on capital-efficient and fee-generating activities. To capitalize on the growing private credit market, the company created the Capital Solutions Group. This initiative combines investment banking and market expertise to offer services in financing, origination, structuring, and risk management.
The firm is investing heavily in digital capabilities, scaling fund programs, and developing new wealth client strategies. These efforts are expected to drive high-single-digit annual growth. Additionally, Goldman Sachs Group Inc. (NYSE:GS) is optimizing expenses and using AI and automation to improve efficiency.
Ariel Appreciation Fund is positive on Goldman Sachs Group Inc. (NYSE:GS) due to its strong quarterly earnings, expected benefits from a new political administration’s policies, and the positive outlook on its core businesses and the overall economy. It stated the following in its Q4 2024 investor letter:
Several stocks in the portfolio delivered solid returns in the quarter. Global investment bank, The Goldman Sachs Group, Inc. (NYSE:GS) outperformed on a robust quarterly earnings beat, highlighted by strength across its investment banking, trading and asset management segments. Meanwhile, the U.S. election has been widely viewed as a positive catalyst across the industry. Investors expect the incoming administration to 1 The “Magnificent Seven” are the largest stocks in the S&P 500 Index driving market performance: Apple Inc. (AAPL), Amazon.com, Inc. (AMZN), Alphabet Inc. (GOOGL), Meta Platforms Inc. (META), Microsoft Corp. (MSFT), NVIDIA Corp. (NVDA) and Tesla, Inc. (TSLA). 2 Hobson, Mellody and John W. Rogers Jr. “What the Stock market Taught Us This Year: Don’t Fall for These Investing Traps.” Wall Street Journal, 5 December 2023. emphasize deregulation and exhibit a greater openness to business combinations compared to the prior regime. Hence, management’s positive commentary around the operating momentum of its core franchises, an improving M&A outlook and the resilience of the U.S. economy sent shares higher.
5. HCA Healthcare Inc. (NYSE:HCA)
Forward Price-to-Earnings Ratio as of March 4: 12.27
Number of Hedge Fund Holders: 81
HCA Healthcare Inc. (NYSE:HCA) owns and operates a network of hospitals and healthcare facilities across the US. This network provides services like acute care, outpatient procedures, and specialized treatments in areas like behavioral health. All of these are aimed at serving diverse patient needs.
In 2024, the company’s network of hospitals saw a 3% increase in inpatient admissions, a 2.4% rise in ER visits, and a 2.8% growth in inpatient surgeries, year-over-year. Overall revenue grew by 6%, with net revenue per equivalent admission up 2.9%. The company is investing in network expansion with $5 to $5.2 billion allocated in capital expenditures for 2025. It’s focused on workforce development and shareholder returns. It recently authorized a new $10 billion share repurchase program. The company also noted that the 2024 hurricanes created a 250 million dollar impact on the 2024 financial year.
For 2025, HCA Healthcare Inc. (NYSE:HCA) projects revenues between $72.8 and $75.8 billion, with an earnings per share value of $24.05 to $25.85. The company expects equivalent admissions to grow 3-4% and revenue per equivalent admission to increase 2-3%.
Delaware Ivy Core Equity Fund stated the following regarding HCA Healthcare Inc. (NYSE:HCA) in its Q3 2024 investor letter:
“HCA Healthcare, Inc. (NYSE:HCA) – While long-term growth trends favor the healthcare sector, HCA is also benefiting from a short-term surge in healthcare utilization, likely the consequence of consumers catching up on care that was deferred during the pandemic. Growth in the insured population through healthcare exchanges also appears to be a more secular driver of increased demand.”
4. Delta Air Lines Inc. (NYSE:DAL)
Forward Price-to-Earnings Ratio as of March 4: 7.99
Number of Hedge Fund Holders: 84
Delta Air Lines Inc. (NYSE:DAL) provides scheduled air transportation for passengers and cargo both domestically and internationally. It operates through two segments, Airline and Refinery. It has a robust network centered on core hubs in the US and significant international hubs, which offers tickets through various channels and provides additional services like aircraft maintenance and vacation packages.
Its customer loyalty strategy is centered on SkyMiles (a frequent flyer program) and its American Express partnership. It contributed $7.4 billion in 2024 revenues with plans to reach $10 billion in the long-term. The company is investing in technology and introduced AI-powered Delta Concierge to simplify travel. It partnered with YouTube for enhanced in-flight entertainment, and collaborated with Uber to expand SkyMiles’ earning opportunities beyond flights.
The company’s full-year 2024 revenue reached a record $57 billion, which was a 4% increase from 2023. Delta Air Lines Inc. (NYSE:DAL) now projects revenue growth of 7% to 9% for 2025. It also expects to generate over $4 billion in free cash flow. It’s focused on improving efficiency through better fleet utilization and workforce optimization, which will contribute to its financial goals.
Oakmark Fund views Delta Air Lines Inc. (NYSE:DAL) as a competitively advantaged, premium brand with strong fundamentals and an attractive valuation, even within a currently out-of-favor industry. It stated the following regarding the company in its first quarter 2024 investor letter:
“Delta Air Lines, Inc. (NYSE:DAL) is a leading global airline. Of the big three U.S.-based airlines (Delta, United and American), we see Delta as the most competitively advantaged. We believe the company’s years of industry-leading operational performance and investments in the customer experience have established Delta as the premium brand in the industry. We also think its geographically optimal hubs, high local market share, robust loyalty program and unique corporate culture all support healthy returns on capital. Delta currently trades at 6x our estimate of normalized earnings per share. We believe this is an attractive valuation for a competitively advantaged and growing business in an out-of-favor industry.”
3. PDD Holdings Inc. (NASDAQ:PDD)
Forward Price-to-Earnings Ratio as of March 4: 8.76
Number of Hedge Fund Holders: 85
PDD Holdings Inc. (NASDAQ:PDD) is a multinational commerce group that operates a portfolio of e-commerce businesses. Specifically, it owns and operates Pinduoduo, which is a platform that offers a range of consumer products. It also owns and operates Temu, which is an online marketplace with a focus on facilitating the integration of businesses and consumers into the digital economy.
This company is supporting its merchants and building a strong platform ecosystem. It launched a $10 billion fee reduction program in Q3 2024, which aims to save money for over 10 million merchants through refunds and reduced fees. It introduced a high-quality merchant support program, which provides help with product development and marketing. During the harvest festival, it allocated $1 billion RMB in subsidies and $2 billion in online traffic to support agricultural merchants.
To expand reach, it eliminated transshipment fees for orders in Western China, which reduced delivery costs by ~70% for some products. This led to growth in orders from remote areas. The company’s total revenues increased by 44% year-over-year in Q3 2024. Revenues from transaction services were up 72%. PDD Holdings Inc. (NASDAQ:PDD) is adapting to changing consumer preferences, and emphasizes quality and personalized products.
Baron Global Advantage Fund is highly optimistic about PDD Holdings Inc. (NASDAQ:PDD) due to its unique business model, rapid growth, international expansion, and undervalued stock price as strong indicators of substantial long-term value. Here’s what it said in its Q3 2024 investor letter:
“During the third quarter we re-initiated a small investment in PDD Holdings Inc. (NASDAQ:PDD). We believe the company is truly unique in the global e-commerce landscape, with an innovative business model, and very strong growth prospects. Founded in 2015 as Pinduoduo, the company has grown into China’s second-largest e-commerce player, capturing over 20% market share. PDD’s Consumer-to-Manufacturer (C2M) model, which connects manufacturers directly to consumers eliminated intermediaries, allowing for ultra-low prices that attract price-sensitive consumers and small merchants. Its discovery-based, algorithm-driven shopping experience has created a highly engaging platform, driving user and merchant growth in a virtuous cycle. We expect PDD to continue gaining share in China given its dominance in the value-for-money segment, growing branded product offerings at affordable prices, and high operational efficiency. PDD’s network effects and cost advantage, supported by its lean structure and efficient C2M model, are set to grow as it scales, both domestically and internationally. Its cross-border e-commerce platform, Temu, launched in September 2022, has rapidly become one of the world’s fastest-growing apps. Leveraging China’s excess capacity and PDD’s supply-chain efficiency, Temu wields strong pricing power over Chinese suppliers and attracts overseas consumers with competitively priced products. While still in early stage, Temu has achieved 2% of the global ex-China e-commerce market and a variable breakeven in the U.S. market, underscoring PDD’s focus on sustainable growth. Despite its rapid growth and profitability, PDD trades at a double-digit free cash flow yield (despite losses from the early-stage international expansion through Temu), significantly below sector peers. While concerns over geopolitical tensions exist, we believe PDD’s growing competitive edge, strong cash flow, and disciplined management position it to create substantial long-term value for shareholders.”
2. ConocoPhillips (NYSE:COP)
Forward Price-to-Earnings Ratio as of March 4: 11.16
Number of Hedge Fund Holders: 86
ConocoPhillips (NYSE:COP) is a global energy company that is engaged in the exploration, production, transportation, and marketing of crude oil, natural gas, LNG, and natural gas liquids. Operating across six segments, its portfolio spans unconventional and conventional assets in North America, Europe, Asia, and Australia, along with global LNG developments and oil sands assets in Canada.
The company’s Lower 48 operations are a major source of its production growth. This refers to the oil and gas exploration and production activities within the contiguous 48 states of the US, excluding Alaska and Hawaii. In 2024, it increased production in this region by 5%, which contributed to a total company growth of 4%. The company plans to continue this growth in 2025. In Q4 2024, the Lower 48 produced 1,308,000 barrels of oil equivalent per day, with the Permian basin contributing 833,000, Eagle Ford 296,000, and Bobcat 151,000 barrels.
To improve efficiency, ConocoPhillips (NYSE:COP) plans to reduce capital spending in the Lower 48 by $1.4 billion in 2025. This will be led by cost savings from its acquisition of Marathon and improvements in drilling and completion. The company expects to save over $1 billion from this acquisition by the end of 2025, with over half of those savings already factored into the 2025 budget.
1. Citigroup Inc. (NYSE:C)
Forward Price-to-Earnings Ratio as of March 4: 10.59
Number of Hedge Fund Holders: 101
Citigroup Inc. (NYSE:C) is a global financial services holding company that offers an array of products and services to a diverse clientele. Operating through five segments, it provides services that range from treasury and trade solutions and securities services to markets, banking, US personal banking, and wealth management. It serves consumers, corporations, governments, and institutions.
Its Services division is a major contributor to the company’s revenue. In 2024, this division generated $19.6 billion in revenue, which was a 9% increase from the previous year. In Q4 alone, the revenue jumped by 15%. This growth came from the strong performance in both Treasury and Trade Solutions (TTS) and Security Services. A part of the division’s success comes from its fee-based revenue.
This growth is attributed to higher activity in areas like US dollar clearing, commercial card spending, and cross-border transactions. Citigroup Inc. (NYSE:C) has been gaining market share in both TTS and Security Services. It has expanded its client base among large institutions and commercial clients through strategic digital investments and enhanced client service offerings. This has solidified its position as a leading global financial services provider.
Earlier last year, here is what Diamond Hill Capital Long-Short Fund said about Citigroup Inc. (NYSE:C) in its first quarter 2024 investor letter:
“Other top Q1 contributors included Meta Platforms, Citigroup Inc. (NYSE:C) and Walt Disney. Banking and financial services company Citigroup’s restructuring efforts are ongoing, and it continues remediating regulatory issues and building capital in anticipation of increased requirements. The company expects to see expenses fall meaningfully in the second half of 2024, bolstering the outlook from here.”
While we acknowledge the growth potential of Citigroup Inc. (NYSE:C), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than C 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.
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