In this article, we discuss the 5 best value stocks to buy according to billionaire Dan Loeb. If you want to see more of the value stocks that Dan Loeb is favoring, click 10 Best Value Stocks to Buy According to Billionaire Dan Loeb.
05. Colgate-Palmolive Company (NYSE:CL)
Third Point’s Stake Value: $159.078 Million
Percentage of Third Point’s 13F Portfolio: 3.76%
Number of Hedge Fund Holders: 55
P/E Ratio (Non-GAAP) as of October 09: 22.55
Colgate-Palmolive Company (NYSE:CL) was founded in 1806 and is based in New York, New York. Colgate-Palmolive Company (NYSE:CL), together with its subsidiaries, manufactures and sells consumer products worldwide.
Colgate-Palmolive Company (NYSE:CL), which has experienced annual dividend growth for the past 60 years, is one of the best stocks to buy as recession approaches. On September 9, the business announced a quarterly dividend of $0.47 per share, as it had in the previous quarter. Shareholders with records as of October 21 will get the dividend on November 15. On August 2, Lauren Lieberman, an analyst with Barclays, raised his price target for Colgate-Palmolive Company (NYSE:CL) from $71 to $74 and maintained an Equal Weight rating on the shares. According to Lieberman in a research note to investors, Colgate’s better-than-anticipated organic sales growth in Q2 has allowed the company to increase its full-year guidance range.
At the end of Q2 2022, 55 hedge funds held stakes in Colgate-Palmolive Company (NYSE:CL). The total value of these stakes amounted to $2.93 billion, up from $2.59 billion a quarter ago, with 50 positions. The hedge fund sentiment for the stock is positive. As of June 30, First Eagle Investment Management is the largest investor in Colgate-Palmolive Company (NYSE:CL) and has stakes worth $899 million in the company.
Here is what First Eagle Investments had to say about Colgate-Palmolive Company (NYSE:CL) in its second-quarter 2022 investor letter:
“Shares of consumer staples giant Colgate-Palmolive have performed well as investors rotated into more recessionary-resilient defensive stocks amid the broader selloff during the second quarter. The company raised revenue guidance for 2022 but lowered its margin outlook because of higher costs for raw materials, packaging and logistics; we believe that the company’s size and market share provide it with options to mitigate the inflation challenges it faces. We continue to like Colgate- Palmolive’s dividend and previously announced $5 billion stock buyback program.”
04. DuPont de Nemours, Inc. (NYSE:DD)
Third Point’s Stake Value: $171.186 Million
Percentage of Third Point’s 13F Portfolio: 4.05%
Number of Hedge Fund Holders: 44
P/E Ratio (Non-GAAP) as of October 09: 13.32
The company was formerly known as DowDuPont Inc. and changed its name to DuPont de Nemours, Inc. in June 2019. DuPont de Nemours, Inc. (NYSE:DD) is based in Wilmington, Delaware. DuPont de Nemours, Inc. (NYSE:DD) provides technology-based materials and solutions in the United States, Canada, the Asia Pacific, Latin America, Europe, the Middle East, and Africa.
DuPont de Nemours, Inc. (NYSE:DD) announced a strong earnings beat for Q2 2022, with normalized EPS up 11% to $0.88 per share. On October 4, P.J. Juvekar, a Citi analyst, maintained a Buy rating while lowering his price target for DuPont de Nemours, Inc. (NYSE:DD) from $75 to $67.
According to Insider Monkey’s Q2 data, DuPont de Nemours, Inc. (NYSE:DD) was found in the public stock portfolios of 44 hedge funds, with collective stakes in the company worth $1.10 billion. New York-based investment firm 40 North Management is a leading shareholder in DuPont de Nemours, Inc. (NYSE:DD), with 5.88 million shares worth more than $326.8 million.
03. EQT Corporation (NYSE:EQT)
Third Point’s Stake Value: $258.860 Million
Percentage of Third Point’s 13F Portfolio: 6.12%
Number of Hedge Fund Holders: 52
P/E Ratio (Non-GAAP) as of October 09: 19.89
EQT Corporation (NYSE:EQT) was founded in 1878 and is based in Pittsburgh, Pennsylvania. EQT Corporation (NYSE:EQT) operates as a natural gas production company in the United States.
On July 20, EQT Corporation (NYSE:EQT) announced a 20% hike in its quarterly dividend to $0.15 per share. As of October 10, the stock’s dividend yield stood at 0.93%. On September 21, Citi analyst Paul Diamond maintained a Buy rating on the shares of EQT Corporation (NYSE:EQT) while raising his price target for the company from $48 to $60. At the end of the second quarter of 2022, 52 hedge funds in the database of Insider Monkey held stakes worth $2.3 billion in EQT Corporation (NYSE:EQT), compared to 52 in the preceding quarter worth $2.1 billion.
In its Q2 2022 investor letter, ClearBridge Mid Cap Growth Strategy Fund mentioned EQT Corporation (NYSE:EQT) and explained its insights for the company. Here is what the fund said:
“We initiated a position in EQT (NYSE:EQT), the largest natural gas producer in the U.S., which possesses high-quality acreage within the Marcellus Shale basin. EQT has benefited from tight supply and demand dynamics as cleaner-burning natural gas takes global share from coal and exports to Europe and Asia provide an avenue of demand growth. Longer-term contracts enhance EQT’s earnings visibility as Europe eliminates its dependence on Russian gas.”
02. Ovintiv Inc. (NYSE:OVV)
Third Point’s Stake Value: $270.443 Million
Percentage of Third Point’s 13F Portfolio: 6.4%
Number of Hedge Fund Holders: 47
P/E Ratio (Non-GAAP) as of October 09: 7.58
Ovintiv Inc. (NYSE:OVV) was formerly known as Encana Corporation and changed its name to Ovintiv Inc. in January 2020. Ovintiv Inc. (NYSE:OVV) was incorporated in 2020 and is based in Denver, Colorado. Ovintiv Inc. (NYSE:OVV), together with its subsidiaries, engages in the exploration, development, production, and marketing of natural gas, oil, and natural gas liquids.
On September 26, Barclays analyst Jeanine Wai raised his price target for Ovintiv Inc. (NYSE:OVV) to $78 from $75 and maintained an Overweight rating on the stock. Wai writes in a research note to investors that the company’s “top-tier” free cash flow and payout yield are “too good to ignore.” He further claims that there is “enough FCF to go around to both reward equity shareholders and continue to meaningfully reduce net debt”.
Here is what Carillon Tower Advisers specifically said about Ovintiv Inc. (NYSE:OVV) in its Q2 2022 investor letter:
“Oil and gas exploration and production company Ovintiv Inc. (NYSE:OVV) fell as oil prices faded late in the quarter due to aggressive Fed rate hikes and growing credit fears in emerging markets, a source of demand growth for oil. Although oil and fuel product inventories remain scarce, the Fed has been so aggressive with rhetoric and tightening that the dollar rose sharply and investor sentiment shifted toward anticipating a recession. Ovintiv is a self-help improvement story as it lowers debt levels through cash generation and asset sales, while detailing plans to buy back shares more aggressively and pay a higher dividend.”
01. PG&E Corporation (NYSE:PCG)
Third Point’s Stake Value: $652.692 Million
Percentage of Third Point’s 13F Portfolio: 15.44%
Number of Hedge Fund Holders: 51
P/E Ratio (Non-GAAP) as of October 09: 13.95
PG&E Corporation (NYSE:PCG) was incorporated in 1905 and is based in San Francisco, California. PG&E Corporation (NYSE:PCG), through its subsidiary, Pacific Gas and Electric Company, engages in the sale and delivery of electricity and natural gas to customers in northern and central California, the United States.
On October 7, analyst Shelby Tucker from RBC Capital raised his price target for PG&E Corporation (NYSE:PCG) from $16 to $19 and maintained an Outperform rating on the shares. The company’s efforts to prevent wildfires and a number of recent catalysts, including its inclusion in the S&P 500, have “encouraged” the analyst. According to Tucker, investors are more at ease with the Fire Victim Trust sales because the market’s response to the most recent block of 35M shares was more subdued.
A total of 51 hedge funds hold a stake in PG&E Corporation (NYSE:PCG) as of Q2, 2022. Dan Loeb’s Third Point is the largest investor in PG&E Corporation (NYSE:PCG) by owning 65 million shares that are worth $652 million.
In its Q1 2022 investor letter, Third Point Management mentioned PG&E Corporation (NYSE:PCG) and explained its insights for the company. Here is what the fund said:
“We continue to see immense value and potential in our position in Pacific Gas & Electric, which emerged from bankruptcy just two years ago. PG&E’s new CEO, Patti Poppe, has transformed the organization, creating a new leadership and safety culture around a talented, committed, and dynamic executive team that is rethinking the way the Company addresses the energy needs of Northern Californians. California is at the forefront of the new energy transition with aggressive renewable procurement goals and high electric vehicle adoption, yet the state faces escalating climate change risks due to extreme drought conditions and wildfires. These conditions present unique challenges to utilities operating in the state. Patti and her team have brought new and creative solutions to these challenges with her focus on a lean operating system and an ambitious undergrounding plan.
In April, PG&E Corporation reported a straightforward and uneventful set of a results, delivering on its promises to customers and investors. As investors, we celebrate that simplicity. At current prices, the Company trades at under 12x 2022 consensus earnings compared to the utility index average of 21x and below its closest California peer, Edison International, at 15x. While there is an overhang from shares to be monetized by the PG&E Fire Victim Trust, PG&E will benefit from the reinstatement of a cash dividend in 2023 and if, as hoped, it is included in the S&P 500 index. Over the next year, we think PG&E will Page 7 continue to re-rate towards industry averages while also growing earnings at an industry-leading 10% per year. In this type of market environment, the financial equation of consistent earnings growth and multiple re-rating makes for a wonderfully boring story and a solid anchor for our portfolio as Third Point’s largest position.”
You can also take a look at 11 Best Dividend Stocks Under $50 and 14 Best Clean Energy Stocks To Buy Now.
