In this article, we will take a look at the 15 Best and Cheap Stocks to Buy According to Billionaires.
The S&P 500 index is trading around its all-time high, and the short-term market indicators aren’t much evident with the latest U.S. tariff policy under implementation.
Billionaire investor and CEO of Berkshire Hathaway Warren Buffett sold a record $134 billion worth of stock in 2024. Buffett’s move is considered a benchmark among investors to assess the market. Historically, when Buffett’s firm becomes a net seller, it’s often followed by below-average market performance. Many believe that this could be a signal of stock market underperformance in 2025. Cheap stocks held by billionaire investors can be a great option considering the current uncertainty in the market.
In an interview with CNBC on March 11, chief market strategist at MAI Capital Management, Chris Grisanti, pointed out the significance of recognizing market signals and valuations to understand the investment landscape effectively. Grisanti noted that entry price is crucial in investing, especially as valuation distortions have spiked in recent years with growth stocks massively outperforming value stocks. He highlighted the change in market trends, pointing out that corrections were often driven by tech stocks impacting the market down, resulting in what he viewed as natural and healthy pullbacks.
Chirs said that the decline in the market has occurred due to the underperformance of economically sensitive sectors such as banks, airlines, and consumer discretionary stocks, indicating a potential economic slowdown. On top of that, President Trump’s tariff policy can be a burden on the economy with local businesses suffering from high tariffs.
Tariff Policy Impact
According to British economist John Ross, President Trump’s tariff policies will negatively impact the U.S. economy. “The only issue with the tariffs is which combination of bad effects will you have,” said Ross in a recent interview with Xinhua.
“But the Federal Reserve’s job is to contain inflation. Therefore, if it sees inflationary pressures, the Federal Reserve will raise interest rates, but it will slow down the economy,” Ross added.
Billionaire investor Leon Cooperman in a recent interview during the Squawk Box show on CNBC said that the president is on the right track, but he is doing things in a very destabilizing manner. “The president is focusing on reducing the deficit, which is the right thing to do,” said Cooperman.
With that said, let’s take a look at the 15 Best and Cheap Stocks to Buy According to Billionaires.
An experienced investor staring at a wall of monitors displaying stocks and mortgaged securities.
Our Methodology
For the best cheap stocks to buy according to billionaires, we analyzed Insider Monkey’s exclusive database of billionaire stock holdings. We selected the 15 best and cheapest stocks to buy with a forward P/E ratio of under 15. The stocks are ranked in ascending order of the highest number of billionaire investors, updated as of Q4 2024. For the stocks with the same number of billionaire investors, we have used the forward P/E ratio as a secondary metric to rank the stocks.
Why are we interested in the stocks that hedge funds and billionaire investors 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).
15 Best and Cheap Stocks to Buy According to Billionaires
15. The Cigna Group (NYSE:CI)
Forward P/E Ratio: 10.68
No. of Billionaire Investors: 17
The Cigna Group (NYSE:CI) specializes in providing insurance and associated services in the U.S. Its offerings include pharmaceutical benefits, home delivery pharmacy, and speciality pharmacy distribution. Under the Cigna Healthcare brand, the company provides a variety of government, employer-based, and private health plans.
The Cigna Group (NYSE:CI) has made changes to C-suite leadership intending to drive focus on customers and patients and accelerate its growth strategy. Here is what the CEO of Cigna Group, David M. Cordani, said:
“The bedrock of our continued success is our exceptional talent. We have one of the most experienced leadership teams in the industry to ensure that we deliver on the bold commitments we have set for ourselves for growth and to further our impact.”
On February 3, Piper Sandler analyst Jessica Tassan dropped CI shares’ price target from $370 to $341. The analyst has reiterated an Overweight rating despite adjusting the price target. Analysts have revised their targets on CI following the company’s unexpected 13% drop in Q4 2024 earnings, recording $1.03 per share. The company reduced its 2025 earnings forecast downward by $1.74, a 6% decline. BofA Securities reiterated a Buy rating on CI shares, with a price target of $420 per share. Despite these risks, BofA Securities believes that the stock’s current value may restrict additional decline.
14. Albertsons Companies, Inc. (NYSE:ACI)
Forward P/E Ratio: 9.84
No. of Billionaire Investors: 17
Albertsons Companies, Inc. (NYSE:ACI) is a U.S.-based food and drug retailer. It offers grocery products, general merchandise, health and beauty care products, pharmacy, fuel, and other items and services in its stores or through digital channels. The company has over 2,269 stores across 34 states and the District of Columbia under 20 banners.
On March 13, RBC Capital analyst Steven Shemesh increased the price target from $22 to $23 on ACI shares, maintaining an Outperform rating on the shares. Albertsons continues to implement strategic initiatives to enhance customer experience and operational efficiency. The company’s resilience and adaptability remain key strengths in a competitive retail market. Analysts remain optimistic about Albertsons as it focuses on strategic growth initiatives.
Albertsons Companies, Inc. (NYSE:ACI) plans to continue investing to deliver consistent omni-execution for brand campaigns across its digital and physical assets. The company is investing in pharmacy and health, which has driven sales penetration to more than 11% of total annual revenue. The company’s focus on its e-commerce business will increase customer engagement. ACI also expects to build new partnerships to add digital inventory and capabilities to its platform.