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.
13. Citigroup Inc. (NYSE:C)
Forward P/E Ratio: 9.27
No. of Billionaire Investors: 17
Citigroup Inc. (NYSE:C) is a diversified financial services holding company. It operates through the Services, Markets, Banking, Wealth, and U.S. Personal Banking segments. The company offers a range of financial services to consumers, corporations, governments, and institutional clients globally. Its offerings include retail banking, investment banking, securities brokerage, wealth management, and more.
Citigroup Inc. (NYSE:C) is expanding its Flex Pay “pay-over-time” tool through strategic partnerships, notably with Apple Pay, to enhance customer awareness and usage. Flex Pay has experienced consistent double-digit growth, growing by 25% from 2023 to 2024, driven by high usage by online customers for short-term financing.
On March 10, Betsy Graseck from Morgan Stanley maintained a Buy rating on C shares, keeping a price target of $110 per share. The analyst remains bullish on Citigroup following its strong 2024 results. For FY2024, the company posted a net income increase of approximately 40% to $12.7 billion. The bank also surpassed its full-year revenue target, by growing the revenue by 5% year-over-year to $81.1 billion. The growth in 2024 was driven by a record year in the Services segment which soared 9%, driven by new mandates and fee growth. Citigroup Inc. expects its expenses to be slightly below 2024 levels, with a focus on delivering positive operating leverage.
Diamond Hill Capital Long-Short Fund stated the following regarding 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.”
12. Universal Health Services, Inc. (NYSE:UHS)
Forward P/E Ratio: 9.08
No. of Billionaire Investors: 17
Universal Health Services, Inc. (NYSE:UHS) is a holding company and operates through its subsidiaries, including its management company. It owns and operates acute care hospitals, outpatient facilities, and behavioural healthcare facilities. The company’s segments include acute care hospital services, behavioural health care services, and others. UHS operates nearly 360 inpatient facilities, and 60 outpatient and other facilities. These facilities are located in 39 states, Washington, D.C., the U.K., and Puerto Rico.
Universal Health Services, Inc. (NYSE:UHS) exceeded both earnings and revenue estimates for FY2024. The company’s earnings came in at $16.61, beating estimates by $0.69, while the revenue was around $15.83 billion, surpassing consensus by $106.13 million. The company’s results were driven by growth in same-facility net revenues in the acute care hospital segment, with a notable 8.7% growth during Q4 2024. UHS has managed its operating expenses efficiently, with premium pay declining notably from a peak of $153 million in Q1 2022 to $60 million in Q4 2024.
In 2024, Universal Health Services, Inc. opened West Henderson Hospital in Las Vegas and has plans to open Cedar Hill Medical Center in Washington, D.C. With these developments, UHS expects positive EBITDA contributions in 2025. In 2024, the company saw a 13% increase in EBITDA, excluding Medicaid supplemental payments.
11. Bristol-Myers Squibb Company (NYSE:BMY)
Forward P/E Ratio: 8.88
No. of Billionaire Investors: 17
Bristol-Myers Squibb Company (NYSE:BMY) is a biopharmaceutical company that discovers, develops, and delivers advanced medicines for serious diseases. BMY’s medicines fall into various therapeutic classes, including hematology, oncology, cardiovascular, immunology, and neuroscience.
Bristol-Myers Squibb Company (NYSE:BMY) achieved double-digit revenue growth in 2024 reaching $48.30 billion. This was mainly driven by key products such as BREYANZI, Krazati, Reblozyl, and Opdivo. Reblozyl, a treatment for anemia patients, has rapidly grown to $1.7 billion in annual sales and is poised to expand further with additional trial results. In addition, BREYANZI has recently obtained approval from the European Commission (EC). This expanded approval applies to all EU member states as well as EEA countries including Iceland, Norway, and Liechtenstein. This expansion will further improve the company’s revenue in the years ahead.
Bristol-Myers Squibb Company has identified an additional $2 billion in savings, with $1 billion anticipated to be realized in 2025, improving financial flexibility. The company expects its 2025 revenue to be around $45.5 billion, driven by its growing portfolios in cardiology, hematology, and neuroscience.
10. Micron Technology, Inc. (NASDAQ:MU)
Forward P/E Ratio: 14.43
No. of Billionaire Investors: 18
Micron Technology, Inc. (NASDAQ:MU) is a memory and storage solutions company that designs, develops, and manufactures DRAM, NAND, and NOR memory technologies. Micron has announced it be the world’s first and only memory company shipping both HBM3E and SOCAMM products for AI servers in the data center. Micron’s SOCAMM is a modular memory solution developed in partnership with NVIDIA to support the NVIDIA GB300 Grace Blackwell Ultra Superchip. This adds to the company’s industry-leading technology, offering low-power DDR (LPDDR) for data center applications.
On March 17, UBS analyst Timothy Arcuri raised the price target on MU shares from $125 to $130, pointing to an “improved pricing outlook” for Micron’s DRAM and NAND memory chips. For the full year 2025, Arcuri upgraded its revenue projection to $35.48 billion, up from $34.52 billion previously.
Parnassus Value Equity Fund stated the following regarding Micron Technology, Inc. (NASDAQ:MU) in its Q2 2024 investor letter:
“Micron Technology, Inc. (NASDAQ:MU) posted fiscal third-quarter results that met expectations. Micron’s DRAM (dynamic random access memory) and NAND (non-volatile storage technology) segments grew revenue strongly, continuing the company’s recovery from a cyclical downturn last year. We believe Micron is well positioned to capitalize on AI-driven demand for greater memory.”
9. Wells Fargo & Company (NYSE:WFC)
Forward P/E Ratio: 12.21
No. of Billionaire Investors: 18
Wells Fargo & Company (NYSE:WFC) is a leading financial services firm that offers banking, investment, mortgage, and finance products. It operates through four key segments including Consumer Banking & Lending, Commercial Banking, Corporate & Investment Banking, and Wealth & Investment Management.
On March 13, Gerard Cassidy from RBC Capital Markets upgraded WFC’s rating from Sector Perform to Outperform, with a new price target of $80. The analyst has confidence in the bank’s leadership and its strategic initiatives to improve profitability and regulatory compliance. In 2024, Wells Fargo & Company (NYSE:WFC) showed strong growth, especially in its credit card division. The company opened more than 2.4 million new credit card accounts. Whereas, credit card spending increased by over $17 billion compared to 2023. Wells Fargo has introduced 11 new card products since 2021, indicating dedication to product development amid higher demand.
Oakmark Fund stated the following regarding Wells Fargo & Co. (NYSE:WFC) in its Q4 2024 investor letter:
“Wells Fargo & Company (NYSE:WFC) was the top contributor during the quarter. The U.S.-headquartered diversified bank’s stock price rose after reporting what we see as solid third-quarter earnings where the company’s efficiency ratio continued to improve as expenses were well controlled. The fee income segment also performed well, growing 12%. In addition, Wells Fargo had the opportunity to repurchase $3.5 billion in shares during the period, bringing the full-year repurchase to roughly $16 billion. In November, the stock price continued its upward trend following the U.S. presidential election as investors were optimistic that the financials sector would benefit from looser regulations and lower corporate taxes, thus stimulating a better environment for dealmaking. We continue to believe that Wells Fargo is a competitively advantaged bank that can use its superior business mix and return potential to unlock further value.”
8. Bank of America Corporation (NYSE:BAC)
Forward P/E Ratio: 11.20
No. of Billionaire Investors: 18
Bank of America Corporation (NYSE:BAC) is a bank and financial holding company that operates in the Consumer Banking, Global Wealth and Investment Management (GWIM), Global Banking, and Global Markets segments. A wide economic moat adds to the company’s competitive market advantages, reducing its chances of operation disruption. Bank of America Corporation operates at a massive scale, generating around $102 billion in revenue in 2024 and ending the year with $3.3 trillion in assets.
On March 7, Baird analyst David George upgraded the rating on BAC from Neutral to Outperform, increasing the price target from $45 to $50. The analyst cited the key factors for the BAC’s positive outlook such as its consistent execution, relatively low credit risk, and robust market businesses.
In 2024, Bank of America Corporation’s (NYSE:BAC) Consumer Banking division generated approximately $11 billion, representing 40% of the company’s total earnings. In Q4 2024, the Consumer Banking division secured more than 200,000 net new checking accounts and continued a six-year streak of quarterly growth. The bank is investing in digital capabilities and maintaining disciplined deposit pricing, with a major focus on continued growth. BAC is also expecting continued growth in consumer loan categories.
7. JD.com, Inc. (NASDAQ:JD)
Forward P/E Ratio: 9.73
No. of Billionaire Investors: 18
JD.com, Inc. (NASDAQ:JD) is a leading supply chain-driven technology and service provider in China. It operates one of China’s largest e-commerce platforms, competing with Alibaba and Pinduoduo. JD differentiates itself through a focus on quality and a direct-sales model. Unlike its competitors, JD operates as a retailer, controlling its supply chain and logistics network to ensure product authenticity. This business model has helped the company to maintain customer loyalty and sustain long-term revenue growth, even during economic downturns.
On March 7, Benchmark analyst Fawn Jiang raised the price target on JD shares from $47 to $58, keeping a Buy rating on the shares. Jiang increased the price target following impressive Q4 2024 results and a positive outlook for 2025. JD.com, Inc. (NASDAQ:JD) surpassed the 2024 earnings estimate of $4.10, posting an EPS of $4.29 per share. The revenue came in at around $159.91 billion, surpassing estimates by $3.36 billion. The strong performance in 2024 was driven by the trade-in program’s positive impact, leading to 16% year-over-year growth in 3C+ home appliances, and fundamental improvements in core categories and ecosystems, with service revenue soaring by 11%.
6. Lennar Corporation (NYSE:LEN)
Forward P/E Ratio: 9.36
No. of Billionaire Investors: 18
Lennar Corporation (NYSE:LEN) is a homebuilding company that is engaged in the construction and sale of single-family attached and detached homes. Lennar also does the purchase, development, and sale of residential land; and the development, construction, and management of multifamily rental properties.
On March 17, Wedbush analyst Jay McCanless reiterated a Neutral rating on LEN shares, keeping the price target at $158 per share ahead of its first quarter FY25 earnings. During Q1 2025, the company posted an EPS of $2.14, beating estimates by $0.39. Lennar’s revenue came in at $7.6 billion, surpassing the consensus estimate of $7.4 billion. LEN’s Q1 earnings and revenue have surpassed McCanless’ estimates as well.
Around 1.5 million homes are needed to be built due to the increase in population and reconstruction of houses due to fires and storms. The construction pace is slow and is expected to take 10-15 years to cope with the increasing demand due to a shortage of land. Lennar Corporation (NYSE:LEN) is expected to gain momentum from underbuilding activities that have led to a shortage of 2-3 million housing units in the U.S. The market has an inelastic demand that would potentially create a sustainable demand for LEN.
5. QUALCOMM Incorporated (NASDAQ:QCOM)
Forward P/E Ratio: 13.59
No. of Billionaire Investors: 19
QUALCOMM Incorporated (NASDAQ:QCOM) develops and commercializes essential wireless technologies worldwide. The company operates through three segments including Qualcomm CDMA Technologies (QCT), Qualcomm Technology Licensing (QTL), and Qualcomm Strategic Initiatives (QSI). Its QCT segment offers chips for mobile, automotive, and IoT devices. QTL licenses its patent portfolio for wireless standards like 5G. Whereas, QSI invests in early-stage tech companies across various sectors, including AI and automotive, and also serves U.S. government agencies.
Qualcomm recently signed an agreement to acquire EdgeImpulse Inc. to strengthen its AI capabilities for IoT. EdgeImpulse will improve Qualcomm’s developer tools and support over 170,000 developers in creating AI-powered applications for edge devices.
As QUALCOMM Incorporated (NASDAQ:QCOM) continues to thrive in the growing AI and chip-making market, it delivered another strong quarter. In Q1 FY2025, the company posted a record revenue of $11.7 billion, with non-GAAP EPS of $3.41 per share. QTL generated around $1.5 billion in revenue with a 75% EBT margin, in line with analyst estimates. QCT posted a record revenue of $10.1 billion. The company continues to meet the strong demand for premium Android smartphones driven by the success of the Snapdragon 8 Elite platform. The company continues to remain a market leader in the cellular baseband processor market.
4. The Allstate Corporation (NYSE:ALL)
Forward P/E Ratio: 12.02
No. of Billionaire Investors: 19
The Allstate Corporation (NYSE:ALL) is a leading insurance provider that offers various property and casualty, health, and protection products. Allstate’s products include auto, home, life, and supplemental insurance. It also provides consumer protection plans, roadside assistance, and analytics solutions. The company’s core business lies around property and casualty insurance in the U.S. and Canada.
In Q4 2024, The Allstate Corporation (NYSE:ALL) posted a significant increase in total revenues, reaching $16.5 billion, up 11.3% from a year ago. The company’s Protection Plans segment experienced notable policy growth in 2024 and now covers 160 million policies, an increase of 60 million since 2019. During Q4, the segment’s revenue reached $528 million, rising by 20.3% year-over-year. Whereas, the segment’s full-year revenue touched $2 billion, representing a 23.9% CAGR since 2019, driven by both domestic and international growth.
On February 28, Paul Newsome from Piper Sandler reiterated an Overweight rating on ALL, maintaining the price target at $248 per share. Newsome expects the company to overcome its ongoing challenges and achieve positive auto policy-in-force (PIF) growth in 2025.
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.”
3. Discover Financial Services (NYSE:DFS)
Forward P/E Ratio: 11.34
No. of Billionaire Investors: 21
Discover Financial Services (NYSE:DFS) provides a wide range of digital banking and payment services across the U.S. Its offerings include Discover-branded credit cards, personal & home loans, and deposit products. The company operates the PULSE (ATM and debit network) and Diners Club (global charge card network) payment networks. DFS is set to merge with Capital One Financial Corporation, pending regulatory approval.
On January 27, Brian Foran from Truist upgraded the price target on DFS shares from $233 to $262, keeping a Buy rating on the stock. Foran’s upgrade follows the Q4 2024 earnings of $5.11, which exceeded analyst estimates of $3.20 per share. Discover Financial Services (NYSE:DFS) posted a revenue of $4.76 billion during the quarter, beating the estimates of $4.41 billion. The analyst’s increased price target reflects an improved earnings outlook based on a higher net interest margin path, improving credit, and a deceleration in expenses.
Middle Coast Investing stated the following regarding Discover Financial Services (NYSE:DFS) in its Q3 2024 investor letter:
“The good transitions tend to tie back to the macroeconomy. Financial companies are seen as the big winners in a soft landing. Each of our winners has good things happening to them, too. Discover Financial Services (NYSE:DFS) is cleaning up many of its problems from the past few years. Whether or not its deal with Capital One goes through, Discover’s business has gotten much stronger in the past six months.”
2. PDD Holdings Inc. (NASDAQ:PDD)
Forward P/E Ratio: 9.94
No. of Billionaire Investors: 21
PDD Holdings Inc. (NASDAQ:PDD) is a leading Chinese e-commerce company, mainly recognized for its social commerce platform, Pinduoduo. PDD practices a unique group-buying model that encourages bulk purchases for discounts, establishing the company as a disruptive force in China’s online retail market. The company is expanding its e-commerce platform, Temu, entering into global markets. On March 12, Temu collaborated with DigitBridge, an American digital commerce operations system, to support SMBs in expanding their sales channels.
At the moment, PDD is facing challenges related to U.S. tariff scrutiny. As reported by Bloomberg in early February, logistics agents have instructed Chinese retailer platforms such as Temu to pay an additional 30% tariff. The administration is tightening regulations on previously exempt packages, increasing the pressure on PDD.
Despite these short-term risks, PDD Holdings Inc. (NASDAQ:PDD) continues to invest in logistics and technology to improve its operations. To enhance its competitive edge, the company’s focus remains on supply chain efficiency, agricultural e-commerce, and AI-powered recommendation engines. The company’s expansion into global markets through Temu will be crucial to overcome tariff challenges in the U.S. In the third quarter of 2024, the company posted a 44% year-over-year growth in revenue to RMB 99.4 billion, driven by growth in online marketing and transaction services. This demonstrates PDD’s ability to grow driven by its strategic investments.
1. Capital One Financial Corporation (NYSE:COF)
Forward P/E Ratio: 10.37
No. of Billionaire Investors: 22
Capital One Financial Corporation (NYSE:COF) is a financial services company that offers a range of banking products including checking and savings accounts, credit cards, auto loans, and commercial lending. Capital One is one of the largest credit card issuers in the U.S. The company is all set to acquire Discover Financial Services following the approval of shareholders from both companies. However, the Department of Justice potentially sees this $35.3 billion acquisition of DFS as “anticompetitive” in the subprime sector.
Despite what happens with the acquisition deal, Capital One Financial Corporation (NYSE:COF) holds a strong position in the market. In Q4 2024, the company posted a net income of $1.1 billion and a full-year profit of $4.8 billion. The company’s EPS was $3.09 for the quarter and $13.96 for the year. COF’s consumer banking deposits continued to grow and upheld a solid liquidity coverage ratio of 155%.
On March 11, Robert W. Baird analyst David George upgraded COF rating from Neutral to Outperform, increasing the price target from $190 to $200. George noted that Capital One’s strong profitability is a key factor to its growth while expecting solid risk-adjusted returns in the coming years. The analyst expects COF to post normalized earnings at $22 per share compared to the consensus estimate of $18.40 per share.
While we acknowledge the potential of COF to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than COF 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 30 Best Stocks To Invest In According to Billionaires.
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