In this article, we will take a look at the 5 cheap stocks to buy today according to media. To see more such companies, go directly to 13 Cheap Stocks to Buy Today According to Media.
5. MSCI Inc. (NYSE:MSCI)
Number of Hedge Fund Holders: 51
Finance company MSCI Inc. (NYSE:MSCI) ranks 5th in our list of the cheap stocks to buy according to the media. Recently, Argus started covering MSCI Inc. (NYSE:MSCI) with a Buy rating. Among the catalysts for MSCI Inc. (NYSE:MSCI) according to Argus include the rise of passive investing, ESG and climate-based investing in developed and emerging economies.
Out of the 910 hedge funds in Insider Monkey’s database, 51 hedge funds had stakes in MSCI Inc. (NYSE:MSCI) as of the end of the second quarter. The biggest stakeholder of MSCI Inc. (NYSE:MSCI) was Henry Ellenbogen’s Durable Capital Partners which owns a $318 million stake in the company.
Here is what Carillon Eagle Mid Cap Growth Fund has to say about MSCI Inc. (NYSE:MSCI) in its Q2 2023 investor letter:
“MSCI provides investment decision support tools to investment institutions worldwide. The stock underperformed in the period as investors focused on the sales slowdown of MSCI’s environmental, social, and governance (ESG) and climate-related business. While we expect this business unit to continue to slow from very high growth rates, we remain comfortable with the strength of the overall MSCI franchise.”
4. D.R. Horton, Inc. (NYSE:DHI)
Number of Hedge Fund Holders: 54
D.R. Horton, Inc. (NYSE:DHI) earlier this year upped its Q3 earnings guidance, driven by a shortage of houses in the US that is causing demand to surge. During the company’s Q2 earnings call D.R. Horton, Inc. (NYSE:DHI) management talked about its outlook:
“For the full year, we currently expect to close between 82,800 and 83,300 homes in our homebuilding operations and between 6,500 and 7,000 homes and units in our rental operations. We expect our consolidated revenues for fiscal 2023 to be in a range of $34.7 billion to $35.1 billion. We expect to generate greater than $3 billion of cash flow from operations in fiscal 2023, primarily from our homebuilding operations. We also expect our fiscal 2023 share repurchases to be approximately $1.1 billion, similar to last year.
For the fourth quarter, we currently expect to generate consolidated revenues of $9.7 billion to $10.1 billion, and homes closed by our homebuilding operations to be in the range of 22,800 to 23,300 homes. We expect our home sales gross margin in the fourth quarter to be approximately 23.5% to 24%, and homebuilding SG&A as a percentage of revenues in the fourth quarter to be in the range of 6.7% to 6.8%. We anticipate our financial services pre-tax profit margin of around 30% to 35%, and we expect our income tax rate to be approximately 24.5% in the fourth quarter. We will continue to balance our cash flow utilization priorities among our core homebuilding operations, our rental operations, maintaining conservative homebuilding leverage and strong liquidity, paying an increased dividend and consistently repurchasing shares.”
Read the full earnings call transcript here.
Baron Real Estate Fund made the following comment about D.R. Horton, Inc. (NYSE:DHI) in its second quarter 2023 investor letter:
“Our investments in homebuilder companies – Toll Brothers, Inc., Lennar Corporation, and D.R. Horton, Inc. (NYSE:DHI) – performed well in the first six months of 2023. The share price of Toll Brothers increased nearly 60% and the shares prices of Lennar and D.R. Horton each gained more than 35%.
Year-to-date, each company has witnessed a meaningful uptick in demand to buy homes:
- Home buyers continue to come off the sidelines and buy homes despite 30-year mortgage rates remaining in the 6.5% to 7.0% range. Several factors are contributing to the recent strength, including pent-up demand to buy homes and fears that mortgage rates could move higher. • The sticker shock of rapidly rising mortgage rates appears to have cooled down. Homebuilders have made homes more affordable to prospective home purchasers by offering mortgage rate buydowns to the mid-5% mortgage rate range while maintaining strong profitability margins. • A dearth of inventory in the existing home market and an overall housing supply shortage is driving home buyers to “stretch their wallet” due to fears that they could miss the opportunity to buy a home.
We remain optimistic about the long-term potential for the Fund’s investments in Toll Brothers, Lennar, and D.R. Horton for several reasons…” (Click here to read the full text)
3. Expedia Group, Inc. (NASDAQ:EXPE)
Number of Hedge Fund Holders: 57
Morgan Stanley in August named Expedia Group, Inc. (NASDAQ:EXPE) among its list of stocks that could see potential AI catalysts in the coming months. Expedia Group, Inc. (NASDAQ:EXPE) could announce generative AI features integration with its platform later this year.
As of the end of the second quarter 57 hedge funds out of the 910 hedge funds tracked by Insider Monkey reported owning stakes in Expedia Group, Inc. (NASDAQ:EXPE).
Aristotle Atlantic Core Equity Strategy made the following comment about Expedia Group, Inc. (NASDAQ:EXPE) in its first quarter 2023 investor letter:
“Expedia Group, Inc. (NASDAQ:EXPE) provides online travel services for leisure and small business travelers. The company offers a wide range of travel shopping and reservation services, as well as provides real-time access to schedule, pricing and availability information for airlines, hotels and car rental companies. Expedia serves customers worldwide.
We see Expedia benefiting from the growth of booking travel online, both for leisure and in corporate travel. The company also benefits from rapid growth in alternative accommodations, vacation home rental, through VRBO. The main sources of revenue and profitability are from hotel and vacation home rental. Additionally Expedia has exposure to airline ticket sales and automobile rentals. Post the COVID-19 pandemic, Expedia’s debt has been reduced and share repurchase has resumed and we would expect a dividend to be reinstated.”
2. Wells Fargo & Company (NYSE:WFC)
Number of Hedge Fund Holders: 75
Wells Fargo & Company (NYSE:WFC) is one of the top cheap stocks to buy today according to media. Wells Fargo & Company (NYSE:WFC)’s PE ratio as of September 20 stands at 10.7. HSBC recently started covering Wells Fargo & Company (NYSE:WFC) with a Hold rating. A latest Reuters report said, quoting CFO Mike Santomassimo, that Wells Fargo & Company (NYSE:WFC) is expected to continue its layoff spree to cut costs and increase efficiency.
As of the end of the second quarter of 2023, 75 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Wells Fargo & Company (NYSE:WFC) as of the end of the June quarter.
Here is what Tweedy, Browne has to say about Wells Fargo & Company (NYSE:WFC) in its Q1 2023 investor letter:
“The Funds received very little in the way of return contributions from many of their financial, energy, media, and healthcare holdings. While it would appear that a crisis was avoided by the quick intervention of bank regulators in the US and Switzerland, some uneasiness still remains in the global banking community. This turmoil couldn’t help but have a negative impact on investor sentiment and in turn on Fund bank holdings such as Wells Fargo (NYSE:WFC).”
1. Citigroup Inc. (NYSE:C)
Number of Hedge Fund Holders: 75
With a PE ratio of 6.77 Citigroup Inc. (NYSE:C) is another banking stock that is considered cheap and undervalued by the media.
As of the end of the second quarter of 2023, 75 hedge funds out of the 910 funds tracked by Insider Monkey were long Citigroup Inc. (NYSE:C). The biggest stakeholder of Citigroup Inc. (NYSE:C) was Warren Buffett’s Berkshire Hathaway which owns a $2.5 billion stake in the company.
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