In this article, we discuss 5 cheap value stocks to buy for 2022. If you want our detailed analysis of value investing and these stocks, go directly to 10 Cheap Value Stocks to Buy for 2022.
5. Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR)
P/E Ratio: 3.07
Price as of December 9: $11.18
Number of Hedge Fund Holders: 23
Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR) offers a high dividend yield of 17.89%. Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR) is a Brazilian government-owned multinational petroleum corporation that deals in petroleum products, natural gas, lubricant, petrochemicals, fertilizers, and biofuels.
Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR) announced Q3 earnings on October 28. EPS in the quarter totaled $0.51, exceeding estimates by $0.02. Revenue over the period equaled $21.61 billion, missing estimates by $264.07 million. On November 16, HSBC analyst Lilyanna Yang upgraded Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR) to Buy from Hold with a $13 price target.
The third quarter database of Insider Monkey reported that 23 hedge funds were bullish on Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR), holding stakes amounting to $3 billion. This is compared to 25 funds in the preceding quarter, with total stakes valued at $2.79 billion.
Rajiv Jain’s GQG Partners is the leading Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR) stakeholder from Q3 2021, increasing his stake in the company by 25% at the end of September, holding over 173 million shares of the company, worth $1.79 billion.
4. United States Steel Corporation (NYSE:X)
P/E Ratio: 1.94
Price as of December 9: $23.13
Number of Hedge Fund Holders: 26
United States Steel Corporation (NYSE:X), a cheap value stock with a price to earnings ratio of 1.94, is a Pennsylvania-based integrated steel producer that operates in the United States and Central Europe, and deals in flat-rolled steel, tubular steel, and iron ore.
United States Steel Corporation (NYSE:X) posted its Q3 results on October 28, announcing an EPS of $5.36, beating estimates by $0.43. Revenue in the period increased almost 155% year-over-year to $5.96 billion, outperforming estimates by $210.07 million.
On November 16, Wolfe Research analyst Timna Tanners initiated coverage of United States Steel Corporation (NYSE:X) with a Peer Perform rating and a $27 price target, citing a cautious view on steel prices and “looming regional oversupply.”
As of the third quarter of 2021, 26 hedge funds tracked by Insider Monkey were bullish on United States Steel Corporation (NYSE:X), holding total stakes amounting to $576.3 million. The largest United States Steel Corporation (NYSE:X) stakeholder from Q3 is D E Shaw, holding 6.51 million shares worth over $143 million.
3. Vale S.A. (NYSE:VALE)
P/E Ratio: 4.05
Price as of December 9: $13.59
Number of Hedge Fund Holders: 27
Vale S.A. (NYSE:VALE), one of the best value stocks to buy for 2022, offers a forward dividend yield of 8.41%. Vale S.A. (NYSE:VALE) is the largest producer of iron ore and nickel in the world, and the mining company is one of the most significant Brazilian corporations that is expected to survive under low iron prices that are plaguing the industry in 2021.
Vale S.A. (NYSE:VALE) reported Q3 earnings on October 28. EPS in the quarter came in at $1.26, exceeding estimates by $0.19. The $12.68 billion revenue was up 17.84% from the prior year quarter, but missed estimates by $1.31 billion.
Morgan Stanley analyst Carlos De Alba on December 9 upgraded Vale S.A. (NYSE:VALE) to Overweight from Equal Weight with a price target of $16.50, up from $16, stating that iron ore prices are set to increase in the first half of 2022 due to sequentially higher steel output in China.
Fisher Asset Management holds a leading stake in Vale S.A. (NYSE:VALE) as of the end of September, with 34.86 million shares worth $486.35 million. Overall, 27 hedge funds monitored by Insider Monkey were long Vale S.A. (NYSE:VALE) in the third quarter, with total stakes amounting to $1.97 billion.
Here is what Miller Value Partners has to say about Vale S.A. (NYSE:VALE) in its Q3 2021 investor letter:
“Vale (VALE) was the top detractor over the quarter, falling 32.6% in sympathy with iron ore’s 48% decline from record highs on China capacity curbs and growing fears of financial issues within the property sector. Vale reported Q2 EBITDA of $11.24Bn, slightly below consensus of $11.47Bn on higher than expected iron ore cash costs. Free cash flow of $6.5Bn (35% annualized yield) came in well ahead of expectations, driving $2.6Bn of stock buybacks and a 1H21 dividend of $7.6Bn, implying year-to-date (YTD) shareholder returns of roughly $13.8Bn (19% of the current market cap). Management maintained FY21 production guidance for iron ore of 315-335 Metric tons (Mt) and lowered year-end 2022 exit capacity to 370Mt (from 400Mt) due to Northern System licensing delays. Additionally, the company hosted their annual Investor Day, outlining new production initiatives aimed at becoming a key supplier to steelmakers in light of decarbonization goals.”
2. Energy Transfer LP (NYSE:ET)
P/E Ratio: 4.77
Price as of December 9: $8.55
Number of Hedge Fund Holders: 29
Energy Transfer LP (NYSE:ET) is a favorite stock of value investors, offering a 7.12% forward dividend yield at a stock price of $8.55, as of December 9. Energy Transfer LP (NYSE:ET) is a Texas-based company offering propane pipeline and natural gas transport services.
Energy Transfer LP (NYSE:ET), on November 3, posted earnings for Q3. EPS in the period equaled $0.20, missing estimates by -$0.03. The $16.66 billion revenue was up 67.39% year-over-year, beating estimates by $1.65 billion.
Of the 29 hedge funds that were bullish on Energy Transfer LP (NYSE:ET) in the third quarter, Abrams Capital Management is the leading stakeholder of the company, owning over 22 million shares worth approximately $212 million.
Here is what Miller Value Partners has to say about Energy Transfer LP (NYSE:ET) in its Q2 2021 investor letter:
“Energy Transfer LP (ET)rose over the period along with the price of oil climbing 40.59% over the period. The company received positive news that the Dakota Access Pipeline project would not be shut down while the Environmental Impact Statement by the US Army Core of Engineers is drawn up. Energy Transfer reported strong 1Q results with revenue of $17B surpassing expectations for $11.8B with adjusted earnings before income, taxes, depreciation and amortization (EBITDA) hitting $5.04B ahead of consensus of $2.77B. The company raised full year adjusted EBITDA guidance to $12.9-13.3B from $10.6-11.0B previously, with the increase largely related to the benefits realized from Winter Storm Uri. The company paid down $3.7B in debt during the quarter, using strong cash f low to reduce leverage. The company also announced the issuance of $900M in 6.5% Series H perpetual preferreds with the company using the proceeds to repay debt and for general purposes.”
1. Cleveland-Cliffs Inc. (NYSE:CLF)
P/E Ratio: 5.20
Price as of December 9: $21.17
Number of Hedge Fund Holders: 35
Cleveland-Cliffs Inc. (NYSE:CLF) is one of the best cheap value stocks to buy for 2022 according to the smart money, with 35 hedge funds monitored by the database of Insider Monkey owning positions in the company, with total stakes valued at $682 million as of Q3 2021. Jeffrey Gendell’s Tontine Asset Management is one of the leading Cleveland-Cliffs Inc. (NYSE:CLF) stakeholders, with a $148.9 million stake in the company in the third quarter.
Cleveland-Cliffs Inc. (NYSE:CLF) is a mining company from Ohio, producing iron ore pellets, direct reduced iron, steel, and stainless steel.
Cleveland-Cliffs Inc. (NYSE:CLF) reported third quarter earnings on October 22. EPS in the period totaled $2.35, surpassing estimates by $0.12. The Q3 revenue jumped 264.76% to $6 billion, outperforming estimates by $370.29 million.
Wolfe Research analyst Timna Tanners initiated coverage of Cleveland-Cliffs Inc. (NYSE:CLF) on November 16 with an Outperform rating and a $30 price target, even though Tanners has a cautious view on steel prices and believes the market is experiencing a surplus supply of steel.
You can also take a look at 11 Best High Dividend Stocks Under $50 and 11 Best American Stocks To Buy Now.
