In this article, we will take a look at the 5 best undervalued stocks to buy now. To see more such companies, go directly to 14 Best Undervalued Stocks To Buy Now.
5. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 73
Chevron Corporation (NYSE:CVX) ranks 5th in our list of the best undervalued stocks to buy now according to the media. This dividend-paying stock has lost about 4% year to date.
4. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders: 92
The Walt Disney Company (NYSE:DIS)’s troubles seem to have no end in sight. Its movies are receiving lukewarm reception, it’s losing Disney+ subscribers to competition and its traditional business is faltering amid declining viewership. And recently, The Walt Disney Company (NYSE:DIS) channels went dark on Charter cable systems due to a carriage dispute. But many long-term analysts still believe The Walt Disney Company (NYSE:DIS), under the leadership of Bob Iger, can turn around its business. The Walt Disney Company (NYSE:DIS) shares have fallen about 28% over the past one year. Though The Walt Disney Company (NYSE:DIS)’s PE ratio is still 65, many mainstream media outlets believe the stock is undervalued.
RiverPark Large Growth Fund made the following comment about The Walt Disney Company (NYSE:DIS) in its Q2 2023 investor letter:
“The Walt Disney Company (NYSE:DIS): DIS was a top detractor in the quarter following mixed FY2Q results. Revenue of $22 billion was up 13% year over year, although EPS, at $0.93, was down 14% year over year. Disney Plus, part of the company’s direct-to-consumer business (DTC), had better subscriber numbers than anticipated despite a price increase, although losses at the DTC business as a whole are growing. The linear TV business also continues to suffer secular headwinds with – 10% revenue growth, and the company faced inflationary cost pressures at its theme parks.
DIS is nevertheless blessed with a deep library of unique content that includes both live sports (providing large, non-time shifted audiences) and incomparable brands including Disney, Marvel, Pixar and Lucasfilm, as well as the ABC network. The company also has a wealth of upcoming new content, with a plan to release over 100 original titles per year on a $30 billion annual content production budget. Now that the disruption in its theme park, cruise and theatrical businesses has come to an end, we believe that Disney is among the best-positioned media companies in the new landscape to combine multi-channel and DTC distribution.
We think the return of long-time CEO Bob Iger will lead to higher and more consistent profitability at the theme parks, better value realization in the linear assets, and consolidation of the company’s DTC assets leading to higher profitability sooner. We therefore expect DIS to grow its free cash flow significantly over the next 3-4 years, from its depressed $1 billion last year, returning to and exceeding its previous $10 billion peak in 2018.”
3. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 106
JPMorgan Chase & Co. (NYSE:JPM) ranks 3rd in our list of the best undervalued stocks to buy according to the media. JPMorgan Chase & Co. (NYSE:JPM) recently bought a 40% ownership stake in Brazilian digital bank C6 Bank.
As of the end of the second quarter of 2023, 106 hedge funds out of the 910 funds in Inside Monkey’s database had stakes in JPMorgan Chase & Co. (NYSE:JPM).
2. Berkshire Hathaway Inc. (NYSE:BRK-B)
Number of Hedge Fund Holders: 109
With a PE ratio of 9.1 as of September 8, Berkshire Hathaway Inc. (NYSE:BRK-B) is considered an undervalued stock by several mainstream financial websites. The Warren Buffett-led conglomerate’s shares have gained about 28% over the past one year. Berkshire Hathaway Inc. (NYSE:BRK-B)’s second quarter earnings jumped 6.6% year over year, driven by strengths in the insurance segment.
As of the end of the second quarter of 2023, 109 hedge funds in Insider Monkey’s database were long Berkshire Hathaway Inc. (NYSE:BRK-B).
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 278
Amazon.com, Inc. (NASDAQ:AMZN) ranks 1st in our list of the best undervalued stocks according to the media. Recently, Needham’s Laura Martin said that Amazon is among the “front runners” in the generative AI boom and Amazon.com, Inc. (NASDAQ:AMZN) would be a beneficiary in the future due to the edge it has in the space.
As of the end of the second quarter of 2023, 278 hedge funds tracked by Insider Monkey had stakes in Amazon.com, Inc. (NASDAQ:AMZN). This makes Amazon.com, Inc. (NASDAQ:AMZN) one of the most popular stocks among smart money investors.
RiverPark Large Growth Fund made the following comment about Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2023 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN): Amazon was a top contributor in the second quarter, in reaction to a solid 1Q23 earnings report. The company generated $127 billion of revenue (2% ahead of expectations) and nearly $5 billion of operating income (57% better than expectations) driven by rebounding online sales and strong incremental gross margins. During the company’s earnings conference call, Amazon management pointed to easing inflationary pressures, higher productivity gains, and lower expected capital spending for the remainder of the year. The only negative in the quarter was slowing AWS revenue growth, which we believe will rebound later in the year.
With its ability to continue its market share gains in three leading businesses (e-commerce, web services and online advertising), plus a multi-year operating margin expansion opportunity (from improved e-commerce margins and greater contribution from the faster growing, higher margin AWS and advertising segments), we believe Amazon remains one of the best-positioned global growth companies in the world. AMZN shares trade at a 10-year trough EPS multiple, despite what we believe to be currently depressed margins and earnings.”
You can also take a peek at Wall Street Analysts See Upside Potential for 10 Stocks with Rising Price Targets and 16 Most Profitable Dividend Stocks.
