5 Best Undervalued Large-Cap Stocks According to Hedge Funds

3. Intel Corporation (NASDAQ:INTC) 

Number of Hedge Fund Holders: 72 

PE Ratio: 9.90     

Intel Corporation (NASDAQ:INTC) makes and sells semiconductor products. On April 4, the firm announced that it was partnering with defense and aviation firm Lockheed Martin to develop 5G capable communications solutions. Intel products already power the Hybrid Base Station of the US military that handles critical communication with emerging platforms such as satellites, aircraft, ships and ground vehicles. In late March, Intel had also signed an agreement to purchase Granulate Cloud Solutions, an Israel-based software optimization firm. 

On February 23, Raymond James analyst Chris Caso upgraded Intel Corporation (NASDAQ:INTC) stock to Sector Perform from Underperform without a price target, noting that the firm’s long-term plan to dominate the chip market was “long and expensive” but little chance of underperformance. 

At the end of the fourth quarter of 2021, 72 hedge funds in the database of Insider Monkey held stakes worth $5.5 billion in Intel Corporation (NASDAQ:INTC), compared to 66 in the previous quarter worth $6.4 billion.

Among the hedge funds being tracked by Insider Monkey, Boston-based investment firm Baupost Group is a leading shareholder in Intel Corporation (NASDAQ:INTC) with 18 million shares worth more than $928 million. 

In its Q4 2021 investor letter, Davis Funds, an asset management firm, highlighted a few stocks and Intel Corporation (NASDAQ:INTC) was one of them. Here is what the fund said:

“Within technology and communication services, we own a number of online businesses and semiconductor related companies, including Alphabet, Amazon, Intel Corporation (NASDAQ:INTC), Applied Materials and Texas Instruments. Within the realm of high technology, we believe that leadership positions reflect enduring and widening competitive advantages over smaller competitors, with few exceptions. This is because online businesses, as well as semiconductor companies, benefit from economies of scale. An online search and advertising engine will, in general, be more profitable per unit of cost as it grows larger in terms of users and advertising dollars. It is a hub-and-spoke model, in other words, where it is generally not necessary to grow expenses at the same rate that revenues grow beyond a certain threshold. Therefore, returns on capital tend to be higher, the larger and more dominant the online search company is.”