In this article we discuss the 5 best undervalued stocks to buy now according to Reddit. If you want to read our detailed analysis of these companies, go directly to the 10 Best Undervalued Stocks to Buy Now According to Reddit.
Best Undervalued Stocks to Buy Now
5. Merck & Co., Inc. (NYSE: MRK)
Number of Hedge Fund Holders: 82
Merck & Co., Inc. (NYSE: MRK) is a New Jersey-based multinational pharmaceutical company. It was founded in 1891 and is placed fifth on our list of 10 best undervalued stocks to buy now according to Reddit. Merck stock has returned more than 7% to investors over the past three months. The company offers products for oncology, hospital acute care, immunology, neuroscience, virology, cardiovascular, and diabetes, among others. The company also has agreements to develop treatments for HIV in collaboration with other pharma companies.
On May 20, investment advisory Argus downgraded Merck & Co., Inc. (NYSE: MRK) stock to Hold from Buy on the back of next month’s spinoff of the Organon division of the firm and the effect it might have on the bottom line.
Out of the hedge funds being tracked by Insider Monkey, Nebraska-based investment firm Berkshire Hathaway is a leading shareholder in Merck & Co., Inc. (NYSE: MRK) with 17 million shares worth more than $1.3 billion.
4. ArcelorMittal (NYSE: MT)
Number of Hedge Fund Holders: 18
ArcelorMittal (NYSE: MT) is a Luxembourg-based multinational steel manufacturing firm. It is ranked fourth on our list of 10 best undervalued stocks to buy now according to Reddit. It was founded in 1976. Arcelor stock has returned more than 243% to investors over the course of the past twelve months. In addition to making and selling steel products, the firm has iron mining interests in Brazil, Bosnia, Canada, Kazakhstan, Liberia, Mexico, and Ukraine, as well as coal mining activities in Kazakhstan.
In earnings results for the first quarter of 2021, posted earlier this month, ArcelorMittal (NYSE: MT) reported earnings per share of $1.93 and a revenue of over $16 billion. The earnings per share beat market estimates by $0.36.
At the end of the fourth quarter of 2020, 18 hedge funds in the database of Insider Monkey held stakes worth $511 million in ArcelorMittal (NYSE: MT), down from 20 in the preceding quarter worth $309 million.
3. Cleveland-Cliffs Inc. (NYSE: CLF)
Number of Hedge Fund Holders: 27
Cleveland-Cliffs Inc. (NYSE: CLF) is an Ohio-based company that mines iron and markets steel products. It was founded in 1847 and is ranked third on our list of 10 best undervalued stocks to buy now according to Reddit. Cleveland stock has returned more than 297% to investors over the past year. The firm makes and sells various steel products to automotive, infrastructure, and manufacturing markets. The stock of the firm has soared in recent weeks in anticipation of increased government spending on infrastructure.
On May 4, investment advisory Credit Suisse upgraded Cleveland-Cliffs Inc. (NYSE: CLF) stock to Outperform from Underperform with a price target of $24. CLF stock surged over 7% after the ratings update.
Out of the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Cleveland-Cliffs Inc. (NYSE: CLF) with 13 million shares worth more than $262 million.
2. Molson Coors Beverage Company (NYSE: TAP)
Number of Hedge Fund Holders: 39
Molson Coors Beverage Company (NYSE: TAP) is an Illinois-based beverage firm that is placed second on our list of 10 best undervalued stocks to buy now according to Reddit. It was founded in 1873. Molson stock has offered investors returns exceeding 55% in the past twelve months. Molson Coors primarily makes and sells beer and malt products in the United States and Canada. Some of the brands it owns include Blue Moon, Carling, Coors Banquet, Coors Light, George Killian’s Irish Red, Granville Island Brewing, and Hamm’s, among others.
On March 19, Molson Coors Beverage Company (NYSE: TAP) stock fell more than 2% as investment advisories JP Morgan and Deutsche Bank revised their price targets and added the stock to their sell lists because of disappointing earnings results for the first quarter of 2021.
At the end of the fourth quarter of 2020, 39 hedge funds in the database of Insider Monkey held stakes worth $386 million in Molson Coors Beverage Company (NYSE: TAP), up from 33 in the preceding quarter worth $316 million.
1. Alibaba Group Holding Limited (NYSE: BABA)
Number of Hedge Fund Holders: 156
Alibaba Group Holding Limited (NYSE: BABA) is a Chinese multinational technology company founded in 1999. It is ranked first on our list of 10 best undervalued stocks to buy now according to Reddit. Alibaba stock has returned more than 6% to investors over the course of the past year. The firm has interests in the ecommerce, artificial intelligence, cloud computing, and digital entertainment businesses. It is one of the largest technology companies in the world with a market capitalization of over $588 billion.
In earrings results for the fourth quarter of 2020, Alibaba Group Holding Limited (NYSE: BABA) reported earnings per share of RMB10.32, missing market predictions by RMB2.96. The total revenue over this period was RMB187 billion, up 63.9% year-on-year.
Out of the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Alibaba Group Holding Limited (NYSE: BABA) with 13.9 million shares worth more than $3.1 billion.
In its Q1 2021 investor letter, Polen Capital, an asset management firm, highlighted a few stocks and Alibaba Group Holding Limited (NYSE: BABA) was one of them. Here is what the fund said:
“In the case of Alibaba, two significant news events impacted the company’s shares in the last few months of 2020. First, the Chinese government intervened to halt–for an undetermined period of time–Ant Group’s IPO. Alibaba owns 33% of Ant Group, and Ant Group’s “Alipay” application facilitates financing and payments around the Alibaba ecosystem. Second, rumors of Chinese regulatory oversight in the internet space were solidified at the end of 2020 when China’s State Administration for Market Regulation announced an investigation under the nation’s AntiMonopoly Law. In combination, these events contributed to a selloff in BABA shares that resulted in a roughly 30% decline from highs in late October 2020.
We view Alibaba as arguably one of the most dominant businesses in the world.
We believe the company is also playing an integral role in China’s ambitions to reorient its economy from one that is export-driven to one that is domestically consumption-driven. Alibaba’s marketplaces—TaoBao and Tmall—in combination with its logistics capabilities may well provide the most efficient way to purchase and receive goods in many of China’s lower-tier cities. Important to the investment case, Alibaba’s core commerce business continues to compound at high rates while enjoying low total addressable market penetration and multiple competitive advantages, not the least of which consist of two-sided network effects between merchants and consumers. At approximately 19x next twelve month’s earnings, we think Alibaba will provide a favorable investment outcome even if it must pay fines or modify some business practices. We continue to expect earnings growth in excess of 20% over the next three to five years. Even if earnings growth were to fall to 15%, we think it would still result in a favorable outcome at the price at which we added to the position.”
You can also take a peek at Billionaire Izzy Englander’s Top 10 Stock Picks and Billionaire David Abrams’ Top Stock Picks.
