This article presents an overview of the 5 Most Profitable Value Stocks Now. For a detailed overview of such stocks, read our article, 18 Most Profitable Value Stocks Now.
5. Delta Air Lines, Inc. (NYSE:DAL)
Estimated Net Income (TTM): $3.40B
Last month, Morgan Stanley published a list of stocks with high free cash flow, high earnings per share growth, and an overweight rating. Delta Air Lines, Inc. (NYSE:DAL) was part of the list.
As of the end of the third quarter of 2023, 53 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Delta Air Lines, Inc. (NYSE:DAL). The most significant stake in Delta Air Lines, Inc. (NYSE:DAL) is owned by Ken Griffin’s Citadel Investment Group which owns a $254 million stake in Delta Air Lines, Inc. (NYSE:DAL).
Carillon Scout Mid Cap Fund made the following comment about Delta Air Lines, Inc. (NYSE:DAL) in its Q3 2023 investor letter:
“The third largest detractor was Delta Air Lines, Inc. (NYSE:DAL), which pulled back after a sharp rally earlier in the year and as higher oil prices hurt sentiment on airlines overall. While weaker domestic fare prices have weighed on the stock price, stronger demand for international travel has improved the company?s profitability.”
4. Canadian Imperial Bank of Commerce (NYSE:CM)
Estimated Net Income (TTM): $3.50B
Last month, Bank of America Securities upgraded Canadian Imperial Bank of Commerce (NYSE:CM) to Neutral from Underperform.
“Our recent investor meeting with CFO Hratch Panossian increased our confidence in the pretax preprovision (“PTPP”) defensibility driven by relative margin stability and a laser focus on extracting franchise efficiencies,” Bank of America analyst Ebrahim Poonawala wrote in a note.
3. Truist Financial Corp (NYSE:TFC)
Estimated Net Income (TTM): $5.33B
Earlier this month, BofA analyst Ebrahim Poonawala upgraded Truist Financial Corp (NYSE:TFC) stock to Buy.
The analyst said he sees “potential for an overshoot in bank stocks with a return to pre-pandemic P/E implying ~50% average upside based on consensus 2025e EPS.”
As of the end of the third quarter of 2023, 47 hedge funds tracked by Insider Monkey had stakes in Truist Financial Corp (NYSE:TFC).
Diamond Hill Large Cap Strategy made the following comment about Truist Financial Corporation (NYSE:TFC) in its Q2 2023 investor letter:
“Also among our bottom contributors were AbbVie and Truist Financial Corporation (NYSE:TFC). Truist, while not considered a ?money center,? is a large, super-regional bank with an attractive Southeastern US footprint that has added value to the communities it serves via its extensive branch network and lending franchises. Truist also owns the fifth largest insurance brokerage in the US, which it recently sold a portion of for roughly $3 billion. Truist?s share price remained under pressure during the quarter as the market continued to be concerned with lower values of longer-duration assets and increasing deposit costs. That said, we remain comfortable with our current position in Truist and believe a significant amount of pessimism is baked into its current share price.”
2. Royal Bank of Canada (NYSE:RY)
Estimated Net Income (TTM): $10.84B
Last month, Bank of America Securities upgraded Royal Bank of Canada (NYSE:RY) to Buy from Neutral, citing Royal Bank of Canada’s (NYSE:RY) strong execution, deal-driven synergies, and ROE defensibility.
1. First Citizens BancShares Inc (Delaware) Class A (NASDAQ:FCNCA)
Estimated Net Income (TTM): $11.15B
First Citizens BancShares Inc (Delaware) Class A (NASDAQ:FCNCA) is one of the most profitable stocks with low PE ratio.
As of the end of the third quarter of 2023, 46 hedge funds tracked by Insider Monkey had stakes in First Citizens BancShares Inc (Delaware) Class A (NASDAQ:FCNCA). Natixis Global Asset Management’s Harris Associates had a $682 million stake in First Citizens BancShares Inc (Delaware) Class A (NASDAQ:FCNCA).
Gator Capital Management made the following comment about First Citizens BancShares, Inc. (NASDAQ:FCNCA) in its Q3 2023 investor letter:
“The Fund?s largest position is First Citizens BancShares, Inc. (NASDAQ:FCNCA) (?First Citizens? or ?FCNCA?). We acquired our stake over the past three years. Initially, we owned and traded around a small position in CIT Group Inc. (?CIT?) during the summer of 2020. We felt CIT was undervalued and management was making progress in reducing risk during the Covid-19 pandemic. In late 2020, CIT agreed to be acquired by First Citizens. We added to our CIT stake the morning of the acquisition announcement because we thought the acquisition was so financially attractive that First Citizens? shares would rally and pull CIT?s shares higher. Our CIT shares were exchanged for First Citizens shares when the merger completed. We held onto our First Citizens shares because we admired the management team, we felt the bank was undervalued, and we projected the bank would benefit from higher interest rates. Then, earlier this year, First Citizens was the winning bidder in the FDIC?s auction of the failed Silicon Valley Bank (?SVB?). We added significantly to the Fund?s First Citizens position on the following Monday morning because the deal was unbelievably favorable for First Citizens.
First Citizens?s stock price rose more than 50% that day and has risen another 40% in the months since the SVB acquisition. We have not sold any shares. We believe the stock still has the potential to double over the next three years. Despite this attractive upside, we think the downside is minimal. Our downside scenario is an unchanged stock price in three years?? (Click here to read the full text)
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