12 Oversold Value Stocks to Buy According to Hedge Funds

4. ON Semiconductor Corporation (NASDAQ:ON)

Number of Hedge Fund Holders: 52

​ON Semiconductor Corporation (NASDAQ:ON) designs and manufactures semiconductor components used in power management, sensing, and connectivity applications. The company focuses on intelligent power and sensing solutions that improve energy efficiency and enable automation in key markets such as automotive, industrial, and cloud infrastructure. Its product portfolio includes power modules, image sensors, analog devices, and mixed-signal integrated circuits. ON is a major supplier of electric vehicles (EVs), advanced driver-assistance systems (ADAS), factory automation, and data centers. The Arizona-based company ranked second on our recent list of 12 Cheap EV Stocks to Buy According to Hedge Funds.

ON Semiconductor Corporation (NASDAQ:ON) is maintaining a consistent outlook for 2025, focusing on strategic opportunities across automotive electrification, industrial energy management, infrastructure, and AI. The company’s transformation has proven successful, demonstrated by its ability to deliver a 45% gross margin at 65% utilization during the downturn, compared to historical 30% margins in previous downturns. The company is executing a strategic restructuring rather than temporary cost-cutting, implementing automation and AI systems for improved efficiency while maintaining R&D investments in future growth.

In the silicon carbide segment, ON Semiconductor Corporation (NASDAQ:ON) maintains a competitive advantage through superior product performance and efficiency, particularly in the Chinese EV market, without requiring a local manufacturing presence. The company’s Treo Platform, introduced in November, represents a significant growth opportunity with 60-70% gross margins, targeting automotive, industrial, and AI applications. ON’s manufacturing strategy remains focused on brownfield investments aligned with actual needs rather than external funding opportunities, maintaining a disciplined approach to capacity expansion. Despite current market headwinds, particularly in the Chinese EV sector, the company maintains strong free cash flow expectations with targets of 25-30% margins for the year. With a forward P/E of 11.51, ON is one of the oversold stocks to buy according to hedge funds.