In this article, we discuss the 5 best low cost stocks to buy under $75. You can go through our detailed analysis of the current stock market investment trends, and go directly to read 15 Best low cost Stocks To Buy Under $75.
5. Wells Fargo & Company (NYSE:WFC)
Share Price as of January 27: $50.32
Number of Hedge Fund Holders: 77
Established in 1852, Wells Fargo & Company (NYSE:WFC) is a prominent financial services entity that offers a comprehensive range of banking, investment, mortgage, consumer, and commercial finance products and services. With assets nearing $1.9 trillion, it holds a significant position as one of the leading financial services providers in the United States.
In the quarter ending December 31, 2023, Wells Fargo & Company (NYSE:WFC) reported a net income of $3.45 billion, or $0.86 per share, a slight increase from $3.16 billion, or $0.75 per share, in the same period in 2022. The earnings were impacted by a $1.9 billion charge related to a Federal Deposit Insurance Corporation special assessment linked to the failures of Silicon Valley Bank and Signature Bank, as well as a $969 million charge attributed to severance expenses. Additionally, Wells Fargo & Company (NYSE:WFC) recorded a $621 million, or $0.17 per share, tax benefit. Excluding these items, the company earned $1.29 per share, surpassing analysts’ predictions.
During Q3 2023, 77 out of the 910 hedge funds tracked by Insider Monkey were investors in the bank. Wells Fargo & Company (NYSE:WFC)’s largest hedge fund shareholder is Eisler Capital, holding a stake valued at $2.23 billion.
4. The Charles Schwab Corporation (NYSE:SCHW)
Share Price as of January 27: $64.20
Number of Hedge Fund Holders: 77
The Charles Schwab Corporation (NYSE:SCHW), headquartered in the United States, is a multinational financial services company that provides an array of services. These services encompass banking, commercial banking, investment-related services, consultancy, and wealth management advisory services, catering to both retail and institutional clients.
On December 12, UBS analyst Brennan Hawken maintained a Buy rating on The Charles Schwab Corporation (NYSE:SCHW) stock and raised the price target to $82 from $72.
At the end of the third quarter of 2023, 77 hedge funds in the database of Insider Monkey held stakes worth $4.6 billion in The Charles Schwab Corporation (NYSE:SCHW), compared to 88 in the previous quarter worth $4 billion.
In its Q3 2023 investor letter, Weitz Investment Management highlighted a few stocks and The Charles Schwab Corporation (NYSE:SCHW) was one of them. Here is what the fund said:
“Lastly, we decided to sell our shares of The Charles Schwab Corporation (NYSE:SCHW) during the first quarter as the regional banking crisis unfolded. The decision effectively locked in Schwab’s negative impact on Fund performance but has no bearing on forward-looking returns. Nevertheless, it is likely Schwab will remain on our detractors list for the balance of 2023.”
3. Citigroup Inc. (NYSE:C)
Share Price as of January 27: $53.90
Number of Hedge Fund Holders: 79
Citigroup Inc. (NYSE:C), commonly referred to as Citi, is an American multinational investment bank and financial services corporation incorporated in Delaware, with its headquarters located in New York City.
On November 2, Bloomberg reported that Citigroup Inc. (NYSE:C) and The Goldman Sachs Group had been chosen to lead the initial public offering (IPO) of Ibotta, a digital marketing software firm. The expected valuation for the IPO is $2 billion, and it is anticipated to take place in the upcoming year.
As of the end of September 2023, 79 hedge funds tracked by Insider Monkey reported owning stakes in Citigroup Inc. (NYSE:C), growing from 75 in the previous quarter. The consolidated value of these stakes is nearly $7 billion.
Silver Beech Capital mentioned Citigroup Inc. (NYSE:C) in its third quarter 2023 investor letter. Here is what it said:
“Citigroup (“Citi”) is a large-capitalization global diversified financial services holding company that primarily serves multinational institutional and high net worth consumer clients. Citi is one of three large American banks to be designated in “bucket 3 or 4” of the “global systemically important bank” (“G-SIB”) framework by The Basel Committee on Banking Supervision. The other banks in this group are J.P. Morgan and Bank of America.
As a G-SIB, Citi is subjected to increased regulatory supervision by global bank regulators and central banks. Enhanced regulatory supervision was an important post-crisis reform to strengthen the global financial system by increasing bank capital ratios, transparency, and decreasing risk-taking. These reforms resulted in the largest G-SIBs moving away from risk-oriented banking activities such as advisory, high-yield lending, and trading, towards lower-risk activities. Indeed, Citi’s most valuable, high-growth segment, Treasury and Trade Solutions, is in lower-risk and entrenched activities such as liquidity and cash management, payments, trade solutions, and automated receivables processing. In our view, somewhat unintuitively, Citi’s increased regulatory supervision contributes to the company’s less risky banking business model, and thus its attractiveness as a downside-oriented investment opportunity.
Citi’s market perception suffers from the bank’s negative historical reputation. In 2008 during the Great Financial Crisis, Citi received the most TARP funding (the largest “bailout”) of the U.S. banks. TARP funding was provided by the U.S. government to forestall a liquidity problem that threatened to become a solvency problem. More recently, Citi mistakenly used its own capital to pay lenders when acting as Revlon’s loan agent, resulting in a $400M fine by the Federal Reserve and orders to resolve internal controls (which Citi fulfilled). Citi’s large global consumer bank was assembled by prior management in the early 2000s to attract and service high-end global consumers. Unfortunately, this pivot was costly and ill-timed in the context of increasingly complex multi-jurisdictional regulation to prevent money laundering and tax evasion. The global consumer bank has been a drag on Citi’s overall performance.
We believe the market dislikes Citi for these historical reasons and because Citi earns lower returns on equity (“ROE”) than its peers. In 2023, Citi has so far earned an ROE of ~7%, compared with peers that earn 10%+ ROEs. Recognizing that Citi is less valuable than its peers because it is a lower performance bank, we would argue that Citi’s valuation is still far too low. We believe the market is over-discounting Citi at its current valuation of ~0.48x tangible book value (“TBV”)…” (Click here to see the full text)
2. Bank of America Corporation (NYSE:BAC)
Share Price as of January 27: $33.50
Number of Hedge Fund Holders: 88
Bank of America Corporation (NYSE:BAC) is a major American multinational investment bank and financial services holding company headquartered in Charlotte, North Carolina, at the Bank of America Corporate Center. Catering to a diverse clientele ranging from individual consumers to large corporations and governments worldwide, the bank offers a quarterly dividend of $0.24 per share, equating to a dividend yield of 2.87% as of January 27.
As of the end of Q3 2023, Insider Monkey’s database indicated that 88 out of the 910 hedge funds tracked had investments in Bank of America Corporation (NYSE:BAC). Notably, Warren Buffett’s Berkshire Hathaway held the largest stake in the company, with a $28.2 billion investment.
1. Uber Technologies, Inc. (NYSE:UBER)
Share Price as of January 27: $65.40
Number of Hedge Fund Holders: 146
Headquartered in San Francisco, California, Uber Technologies, Inc. (NYSE:UBER) operates technology platforms connecting consumers with independent ride service providers. The company extends its services to various forms of transportation, such as public transit, bikes, and scooters. Additionally, Uber provides on-demand food delivery, freight services, business fleet solutions, and same-day delivery options. With a presence in over 70 countries, Uber serves more than 142 million monthly active platform consumers.
Earlier in November of 2023, Uber Technologies Inc (NYSE:UBER) unveiled its intention to issue $1.2 billion in five-year convertible bonds, slated to mature in 2028 and aimed at qualified institutional buyers. The ride-sharing company specified that a portion of the funds would be allocated to cover expenses related to entering capped call transactions, with the goal of mitigating dilution during the conversion into equity. Uber further outlined that the remaining proceeds would be utilized for the repayment, redemption, or repurchase of outstanding debt, including $1 billion of 7.5% notes set to mature in 2025.
At the end of the third quarter of 2023, Insider Monkey’s database showed that 146 hedge funds held stakes worth $8.1 billion in Uber Technologies, Inc. (NYSE:UBER), up from 144 in the preceding quarter worth $7.66 billion.
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