In this article, we discuss 5 cheap value stocks hedge funds are buying in 2022. If you want to see more cheap value stocks on the radar of institutional investors, click 10 Cheap Value Stocks Hedge Funds are Buying in 2022.
5. AT&T Inc. (NYSE:T)
Number of Hedge Fund Holders: 74
P/E Ratio as of May 27: 8.98
Share Price as of May 27: $21.29
AT&T Inc. (NYSE:T) is a Texas-based telecommunications, media, and technology services provider. Elite hedge funds increased their hold on AT&T Inc. (NYSE:T) in 2022. The database of Insider Monkey suggests that 74 hedge funds were bullish on the stock at the end of March 2022, up from 70 funds in the last quarter. Arrowstreet Capital is the biggest position holder in the company, with 28.7 million shares worth $678.5 million.
On April 25, RBC Capital analyst Kutgun Maral maintained a Sector Perform rating on AT&T Inc. (NYSE:T) and slashed the price target on the stock to $20 from $30. The analyst is optimistic about AT&T Inc. (NYSE:T)’s ability to deliver “strong” subscriber growth across wireless with its 7th consistent quarter of over 600,000 postpaid phone net adds as well as fiber. However, he prefers to see “proof points” in the company’s strategy against “increasingly competitive” markets.
AT&T Inc. (NYSE:T) reported its Q1 financial results on April 21, announcing earnings per share of $0.77, beating market estimates by $0.02. The $38.11 billion revenue, however, fell short of analysts’ predictions by $129.79 million.
Here is what Weitz Investment Management Hickory Fund has to say about AT&T Inc. (NYSE:T) in its Q4 2021 investor letter:
“After several quarters of pandemic-induced outsized growth, new broadband connection growth has slowed for U.S. cable operators. This slower growth has coincided with a renewed push by competitors like Verizon and AT&T to offer high-speed data (either via wireless connections or by building new fiber-optic networks).”
4. Ally Financial Inc. (NYSE:ALLY)
Number of Hedge Fund Holders: 49
P/E Ratio as of May 27: 5.26
Share Price as of May 27: $43.16
Ally Financial Inc. (NYSE:ALLY) is a Michigan-based digital financial-services company, serving consumer, commercial, and corporate customers primarily in the United States and Canada. Ally Financial Inc. (NYSE:ALLY), with a P/E ratio of 5.26 and priced at $43.16, is a notable cheap value stock that hedge funds are buying in 2022.
On May 24, Wells Fargo analyst Donald Fandetti reiterated an Overweight rating on Ally Financial Inc. (NYSE:ALLY) but lowered the price target on the stock to $50 from $57. The analyst noted that Ally Financial Inc. (NYSE:ALLY) posted a Q1 adjusted EPS of $2.03, above his $1.91 estimate and consensus of $1.93. Overall, the results were attractive and Ally Financial Inc. (NYSE:ALLY) seems positioned to surpass the high end of its 16%-18%+ ROTCE guidance for 2022, the analyst added.
According to Insider Monkey’s Q1 2022 database, 49 hedge funds were bullish on Ally Financial Inc. (NYSE:ALLY), with collective stakes worth $2.4 billion, compared to 48 funds in the preceding quarter, holding stakes in the company valued at $2.3 billion. Harris Associates is the leading shareholder of the company, with 26.6 million shares worth $1.15 billion.
3. Frontier Communications Parent, Inc. (NASDAQ:FYBR)
Number of Hedge Fund Holders: 48
P/E Ratio as of May 27: 1.28
Share Price as of May 27: $26.35
Frontier Communications Parent, Inc. (NASDAQ:FYBR) was incorporated in 1935 and is based in Norwalk, Connecticut. It provides communications services for individual consumers and corporate clients in 25 American states. With a price to earnings ratio of 1.28, it is one of the pure value stocks favored by hedge funds in 2022.
Morgan Stanley analyst Simon Flannery upgraded Frontier Communications Parent, Inc. (NASDAQ:FYBR) on May 26 to Equal Weight from Underweight with a price target of $25, up from $24. The company has performed well so far as it executes an aggressive fiber strategy to boost growth, the analyst told investors. With Frontier Communications Parent, Inc. (NASDAQ:FYBR)’s short-term financing needs fulfilled and the valuation “looking more reasonable”, the analyst upgraded the stock but still sees multiple years of cash expenses and broadband competition ahead.
According to Insider Monkey’s data, 48 hedge funds were bullish on Frontier Communications Parent, Inc. (NASDAQ:FYBR) at the end of the first quarter of 2022, up from 46 funds in the prior quarter.
2. Bath & Body Works, Inc. (NYSE:BBWI)
Number of Hedge Fund Holders: 57
P/E Ratio as of May 27: 8.66
Share Price as of May 27: $42.45
Bath & Body Works, Inc. (NYSE:BBWI) is an American specialty retailer of home fragrance, body care, soaps, and sanitizer products. In Q1 2022, 57 hedge funds were bullish on Bath & Body Works, Inc. (NYSE:BBWI), compared to 62 funds in the last quarter. The collective stakes owned in Q1 exceeded $4 billion.
On May 18, Bath & Body Works, Inc. (NYSE:BBWI) posted its Q1 financial results. The company reported an EPS of $0.64 and a revenue of $1.45 billion, above consensus estimates by $0.12 and $7.14 million, respectively.
Citi analyst Paul Lejuez on May 23 reiterated a Buy recommendation on Bath & Body Works, Inc. (NYSE:BBWI) but lowered the firm’s price target on the shares to $54 from $87. The momentum at Bath & Body Works, Inc. (NYSE:BBWI) continues even amid tough market competition and its Q2 has started out well, the analyst told investors in a research note.
1. Teck Resources Limited (NYSE:TECK)
Number of Hedge Fund Holders: 56
P/E Ratio as of May 27: 7.26
Share Price as of May 27: $43.21
Teck Resources Limited (NYSE:TECK) is a Canadian company that explores and produces natural resources in Asia, Europe, and North America. The company offers steelmaking coal, copper, gold, blended bitumen, lead, silver, molybdenum, zinc, zinc concentrates, chemicals, and fertilizers. CIBC analyst Bryce Adams on May 2 raised the price target on Teck Resources Limited (NYSE:TECK) to C$52 from C$50 and kept a Neutral rating on the shares.
On April 27, Teck Resources Limited (NYSE:TECK) posted its Q1 results, reporting earnings per share of $2.31, beating analysts’ estimates by $0.06. The revenue grew about 90% year-over-year to $3.93 billion, ahead of Street forecasts by $16.10 million. The company also declared a per share quarterly dividend of C$0.125, payable on June 30 to shareholders of record as of June 15.
According to Insider Monkey’s Q1 database, 56 hedge funds held long positions in Teck Resources Limited (NYSE:TECK), up from 40 funds in the earlier quarter. It is one of the most prominent cheap value plays that hedge funds are monitoring in 2022. Soroban Capital Partners held the biggest position in Teck Resources Limited (NYSE:TECK) as of Q1, comprising 12.25 million shares worth $495.16 million.
You can also take a look at 10 Growth ETFs to Buy Now and 10 Best Value ETFs to Invest in Now.
