In this article, we discuss 5 of the best undervalued stocks to buy now. If you want to check out some more of the best undervalued stocks to buy, go directly to 12 Best Undervalued Stocks To Buy Now.
5. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders: 109
The Walt Disney Company (NYSE:DIS) has high quality assets such as theme parks and content studios that will be worth more once the economy recovers. With a forward P/E ratio of 17.53, The Walt Disney Company (NYSE:DIS) is arguably undervalued given the earnings power of its businesses and the potential for Disney+ to become a potential next Netflix if it continues its growth.
109 hedge funds in our database owned The Walt Disney Company (NYSE:DIS) at the end of Q2 2022.
4. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 128
Apple Inc. (NASDAQ:AAPL) hasn’t declined as much as the S&P 500 or the NASDAQ this year and the stock still trades at a rather premium forward P/E ratio of 21.48. Nevertheless, Apple Inc. (NASDAQ:AAPL) is still considered an undervalued stock given its earnings per share growth potential in the future and its steady history of capital returns over the years. In the second quarter alone, Apple Inc. (NASDAQ:AAPL) repurchased $24.56 billion of its own shares. In the last 12 months, the company has bought back over $91 billion.
3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 184
Meta Platforms, Inc. (NASDAQ:META) is an undervalued stock given its huge userbase, and its forward P/E ratio of 11.8. Although analysts don’t see much earnings per share growth in the next five years given its EPS Next 5 year ratio of 6.8%, Meta Platforms, Inc. (NASDAQ:META) still has earnings growth potential given improvements in AI and machine learning. There could be more EPS growth if Meta Platforms, Inc. (NASDAQ:META)’s metaverse investments are a success or if the company fends off the challenge from TikTok.
2. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 252
Amazon.com, Inc. (NASDAQ:AMZN) may have a P/E ratio of almost 100, but it is still considered undervalued given its earnings potential in the future. Given its dominance in e-commerce and the cloud, Amazon.com, Inc. (NASDAQ:AMZN) has considerable scale and analysts expect Amazon.com, Inc. (NASDAQ:AMZN) to grow EPS on average by 33.25% per annum for the next 5 years. Amazon.com, Inc. (NASDAQ:AMZN) is also investing in future technologies such as robotics that could one day become another big business if successful. With 252 hedge fund holders in our database owning shares of Amazon.com, Inc. (NASDAQ:AMZN), the stock ranks #2 on our list of 12 Best Undervalued Stocks To Buy Now.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 258
Microsoft Corporation (NASDAQ:MSFT) is undervalued despite having a P/E ratio of 23.7 given its growth potential over the next five years as well as the durability of its earnings given its strong position in enterprise and the cloud. In terms of earnings potential, analysts expect the company to grow its EPS by around 14.93% per annum for the next 5 years. In terms of its durability, Microsoft Corporation (NASDAQ:MSFT) has substantial network effects given its dominance in operating systems, and productivity software. The company is also growing in the cloud. On average analysts have a target price of $328.19 per share on Microsoft Corporation (NASDAQ:MSFT).
With 258 hedge funds in our database holding shares at the end of Q2 2022, Microsoft Corporation (NASDAQ:MSFT) ranks #1 on our list of 12 Best Undervalued Stocks To Buy Now.
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