5 Most Undervalued Blue Chip Stocks To Buy According To Hedge Funds

1. Meta Platforms, Inc. (NASDAQ:META)

Number of Hedge Funds Having Stakes in the Company as of Q3 2022: 177

PE Ratio as of January 25: 13.61

Meta Platforms, Inc. (NASDAQ:META) shares have lost about 52% in value over the past year. This has depressed Meta Platforms, Inc. (NASDAQ:META)’s valuation. While short-term outlook for Meta Platforms, Inc. (NASDAQ:META) doesn’t look strong amid growing competition and recession fears, some analysts still believe Meta Platforms, Inc. (NASDAQ:META) presents a strong buying opportunity for long-term investors.

Recently, Michael Nathanson, Senior Research Analyst at MoffettNathanson, said Meta Platforms, Inc. (NASDAQ:META) is attractive since he believes the market is taking the problems of 2022 and extrapolating them as fundamental problems while the analyst believes these problems were cyclical, especially the decline in ads revenue.

As of the end of the third quarter of 2022, 177 hedge funds tracked by Insider Monkey reported having stakes in Meta Platforms, Inc. (NASDAQ:META). The total value of these stakes was about $14 billion. The biggest stakeholder of Meta Platforms, Inc. (NASDAQ:META) was Ken Fisher’s hedge fund which had owned a $1.6 billion stake in Meta Platforms, Inc. (NASDAQ:META).

Here is what Wedgewood Partners has to say about Meta Platforms, Inc. (NASDAQ:META) in its Q3 2022 investor letter:

“Meta Platforms detracted from performance during the quarter and for most of the year. Meta’s advertising revenue grew slightly (currency-adjusted) over 2021 but was up over +60% compared to 2019 (pre-Pandemic). The Company reported 2.9 billion “daily active users (DAUs)” of its Family of Apps (as of September 2022), up nearly +30% from December 2019. Despite these impressive gains, the stock now trades at absolute levels well below where it traded before the Pandemic. Much of the market’s concern revolves around slowing revenue growth and aggressive reinvestment. It is now quite evident that there was a tremendous pull-forward of demand for many businesses and services over the past couple of years. The normalization of revenue growth from that pull-forward is hardly an existential crisis. Further, while Meta’s profit margins have fallen below pre-Pandemic levels, the business likely hired well in excess of what it needed because it assumed the Pandemic induced growth would continue. Meta has plenty of room to moderate its expense base and drive significant value by repurchasing shares at today’s historically depressed multiples.”

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