5 Cheapest Stocks in Warren Buffett’s Portfolio for 2024

In this piece, we will take a look at the 5 cheapest stocks in Warren Buffett’s portfolio for 2024. If you want to see more stocks in this selection, you can look at the 12 Cheapest Stocks in Warren Buffett’s Portfolio for 2024.

5. Ally Financial Inc. (NYSE:ALLY)

Berkshire Hathaway’s Latest Investment: $773.72 Million
Number of Hedge Fund Holders: 43
P/E Ratio: 9.52

Ally Financial Inc. (NYSE:ALLY) is one of the cheapest stocks in Warren Buffett’s portfolio for 2024 in the financial services sector. Ally Financial Inc. (NYSE:ALLY) provides various digital products and services to people seeking insurance, mortgages, car loans, and other products.

Ally Financial Inc. (NYSE:ALLY) is one of the best-performing stocks in Buffett’s portfolio, going by the 45% year-to-date gain, better than the 21% gain for the S&P 500. In addition, Ally Financial Inc. (NYSE:ALLY) offers a 3.42% yield. Berkshire held stakes worth $773.72 million as of the end of Q3 2023.

As of the conclusion of Q3 2023, 43 hedge funds listed in Insider Monkey’s database disclosed holding stakes in Ally Financial Inc. (NYSE:ALLY), a slight decrease from the 46 funds reported in the preceding quarter. The aggregated worth of these stakes exceeded $1.64 billion. Notably, Warren Buffett’s Berkshire Hathaway emerged as the leading stakeholder during Q3, possessing 29 million shares in the company.

Here is what Silver Beech Capital said about Ally Financial Inc. (NYSE:ALLY) in its Q1 2023 investor letter: 

“Ally Financial Inc. (NYSE:ALLY) is the largest all-digital bank in the United States, the 22nd largest bank by total assets ($192 billion), the nation’s leading prime auto lender (with 6.5 million consumer customers), and leading auto floorplan lender (with over 23,000 dealer relationships). Most of Ally’s assets are auto loans and finance receivables, but Ally also offers consumer protection insurance through its dealer channels and operates small corporate and mortgage lending businesses. Notably, Ally also offers some of the industry’s most competitive deposit products: Ally was awarded “Best Checking Account”, “Best Saving Account”, and overall “Best Online Bank” by third party reviews and was the first large bank to eliminate overdraft fees. We believe Ally’s intrinsic value is more than 40% greater than its March 31 share price…”(Click here to read the full text).

[/company-follow-email]

4. Capital One Financial Corporation (NYSE:COF)

Berkshire Hathaway’s Latest Investment: $1.21 Billion
Number of Hedge Fund Holders: 49
P/E Ratio: 9.89

McLean, Virginia-based Capital One Financial Corporation (NYSE:COF) operates as a financial services company. It offers various financial services and products, including credit cards and consumer and commercial banking. Capital One Financial Corporation (NYSE:COF) also accepts checking accounts, money market deposits, negotiable orders of withdrawals, savings, and deposits.

Capital One Financial Corporation (NYSE:COF) remains one of the cheapest stocks in Warren Buffett’s portfolio for 2024 at the back of a 43% year-to-date gain. Capital One Financial Corporation (NYSE:COF) trades with a price-to-earnings multiple of 9.89 while rewarding investors with a 1.82% yield. Berkshire Hathaway held stakes worth $1.21 billion as of the end of Q3 2023.

In the third quarter of this year, 49 out of the 910 hedge funds analyzed by Insider Monkey actively acquired and held shares of Capital One Financial Corporation (NYSE:COF). Notably, Harris Associates emerged as the largest shareholder, boasting a substantial stake valued at $1.8 billion.

[/company-follow-email]

3. Citigroup Inc. (NYSE:C)

Berkshire Hathaway’s Latest Investment: $2.27 Billion
Number of Hedge Fund Holders: 79
P/E Ratio: 8.18

Citigroup Inc. (NYSE:C) is one of the cheapest stocks in Warren Buffett’s portfolio for 2024 for anyone eyeing exposure in the financial services sector. As one of the largest banks in the US, Citigroup Inc. (NYSE:C) continues to take advantage of the high-interest rates in the aftermath of the Fed, hiking the benchmark rate to between 5.25% and 5.50%.

Citigroup Inc. (NYSE:C) has gained about 13% year to date. While trading with a price-to-earnings multiple of 8.18, it also rewards investors with a 4.04% dividend yield. Berkshire Hathaway held stakes worth $2.27 billion in Citigroup Inc. (NYSE:C) as of the end of Q3 2023.

Insider Monkey tracked 79 hedge funds that owned Citigroup Inc. (NYSE:C) shares at the end of Q3 2023, up from 75 in the previous quarter. Their holdings were worth almost $7 billion. 

Silver Beech Capital talked about Citigroup Inc. (NYSE:C) in its Q3 2023 letter. This is what it said:

“Citigroup (“Citi”) is a large-capitalization global diversified financial services holding company that primarily serves multinational institutional and high net worth consumer clients. Citi is one of three large American banks to be designated in “bucket 3 or 4” of the “global systemically important bank” (“G-SIB”) framework by The Basel Committee on Banking Supervision. The other banks in this group are J.P. Morgan and Bank of America.

As a G-SIB, Citi is subjected to increased regulatory supervision by global bank regulators and central banks. Enhanced regulatory supervision was an important post-crisis reform to strengthen the global financial system by increasing bank capital ratios, transparency, and decreasing risk-taking. These reforms resulted in the largest G-SIBs moving away from risk-oriented banking activities such as advisory, high-yield lending, and trading, towards lower-risk activities. Indeed, Citi’s most valuable, high-growth segment, Treasury and Trade Solutions, is in lower-risk and entrenched activities such as liquidity and cash management, payments, trade solutions, and automated receivables processing. In our view, somewhat unintuitively, Citi’s increased regulatory supervision contributes to the company’s less risky banking business model, and thus its attractiveness as a downside-oriented investment opportunity. (Click here to see the full text).

[/company-follow-email]

2. HP Inc. (NYSE:HPQ)

Berkshire Hathaway’s Latest Investment: $2.63 Billion
Number of Hedge Fund Holders: 44
P/E Ratio: 9.26

HP Inc. (NYSE:HPQ) is one of Buffett’s investment plays in the technology sector. The company provides personal computing and other digital access, devices, imaging, and printing products. While HP Inc. (NYSE:HPQ) is one of the oldest computing companies, it is also one of the cheapest stocks in Warren Buffett’s portfolio for 2024, trading at a price-to-earnings multiple of 9.26.

HP Inc. (NYSE:HPQ) has gained 15% year to date and offers a 3.65% dividend yield. Among the 910 hedge funds monitored by Insider Monkey in the third quarter of 2023, 44 held stakes in HP Inc. (NYSE:HPQ). 

The leading hedge fund shareholder in HP Inc. was Berkshire Hathaway, chaired by Warren Buffett, with a substantial stake valued at $2.63 billion. The hedge fund trimmed its stakes in HP Inc. (NYSE:HPQ) by 16% in Q3 2023.

[/company-follow-email]

1. Bank of America Corporation (NYSE:BAC)

Berkshire Hathaway’s Latest Investment: $28.28 Billion
Number of Hedge Fund Holders: 88
P/E Ratio: 9.49

Bank of America Corporation (NYSE:BAC) is another financial service investment play in Berkshire Hathaway’s portfolio. The company offers banking and financial products and services. Bank of America Corporation (NYSE:BAC)’s products include traditional and money market savings accounts, certificates of deposit and IRAs, and noninterest-and interest-bearing checking accounts.

Bank of America Corporation (NYSE:BAC) is flat for the year, but its revenues and earnings should receive a boost from the high-interest rate environment. While trading at a price-to-earnings multiple of 9.49, Bank of America Corporation (NYSE:BAC) yields 2.83%, ideal for generating passive income on the side. It is one of the oldest and biggest holdings in Buffett’s portfolio, with stakes worth $28.28 billion.

The cumulative value of Bank of America Corporation (NYSE:BAC) stakes held by 88 hedge funds in Insider Monkey’s database amounted to over $31.3 billion at the conclusion of the third quarter in 2023. This reflected a slight reduction compared to the previous quarter, during which 90 hedge funds held shares of Bank of America Corporation (NYSE:BAC).

Here is what Smead Capital Management, an investment management company, said about Bank of America Corporation (NYSE:BAC) in its Q3 2023 investor letter:

“Through the first nine months of the year, we had a gain of 2.10%. The S&P 500 had a gain of 13.07% and the Russell 1000 Value had a gain of 1.79%. The stock market realized markedly higher riskless US Treasury interest rates had their effect on the stock market as it began to reassert what Warren Buffett calls the “gravitational pull” on price-to-earnings ratios (P/E).

On the downside, Target (TGT), Bank of America Corporation (NYSE:BAC) and Pfizer (PFE) detracted the most in the first nine months of the year. Inverted yield curves are historically lousy for the banks, so the weak performance for BAC is no surprise.”

[/company-follow-email]

Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily newsletter to get  the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also check out our articles on Top 15 Value Stocks to Buy for 2024 and Centi-Billionaire Bill Gates’ Top 15 Dividend Stocks.