In this article, we will take a look at the top 5 most undervalued blue chip stocks to buy according to hedge funds. You can skip this part and go to 11 Most Undervalued Blue Chip Stocks To Buy According To Hedge Funds.
5. Wells Fargo & Company (NYSE:WFC)
Number of Hedge Funds Having Stakes in the Company as of Q3 2022: 77
PE Ratio as of January 25: 14.16
Wells Fargo & Company (NYSE:WFC) is a sought-after stock these days as investors keep piling into financial stocks for interest rate hikes. Wells Fargo & Company (NYSE:WFC) is also a solid dividend-paying company. On January 24, Wells Fargo & Company (NYSE:WFC) announced a $0.30/share quarterly dividend, in line with previous. Forward dividend yield of Wells Fargo & Company (NYSE:WFC) came in at about 2.68%. However, Wells Fargo & Company (NYSE:WFC) stock could face short-term headwinds amid recession worries. In the fourth quarter, Wells Fargo & Company (NYSE:WFC)’s revenue totaled $19.7 billion, missing the consensus estimate of $20.04 billion. EPS in the fourth quarter on a GAAP basis came in at $0.67, beating estimates of $0.61.
The biggest hedge fund stakeholder of Wells Fargo & Company (NYSE:WFC) at the end of September was Boykin Curry’s Eagle Capital Management $928 million.
4. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Funds Having Stakes in the Company as of Q3 2022: 87
PE Ratio as of January 25: 14.27
With a PE ratio of 14.7 as of January 25, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of the most undervalued blue chip stocks to buy according to hedge funds. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) has a strong edge over its competitors in chips manufacturing, which is expected to keep Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) at a vantage point even during market downturns and recessions. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) recently gained after it posted Q4 results and said it plans to cut expenses in 2023 as semiconductor demand weakens.
In the fourth quarter, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)’s EPS came in at $1.82, while revenue in the period totaled $19.93 billion. Estimates for these two figures were $1.77 and $20.92 billion, respectively.
3. Bank of America Corporation (NYSE:BAC)
Number of Hedge Funds Having Stakes in the Company as of Q3 2022: 97
PE Ratio as of January 25: 10.80
Bank of America Corporation (NYSE:BAC) ranks 3rd in our list of the most undervalued blue chip stocks to buy according to hedge funds. Bank of America Corporation (NYSE:BAC) has gained about 2.4% over the past six months. Earlier this month, after Bank of America Corporation (NYSE:BAC) posted its Q4 results, Piper Sandler’s analyst R. Scott Siefers downgraded Bank of America Corporation (NYSE:BAC). The analyst said that the “big emerging pressure” for the bank and other peers in the group is the net interest income “degradation.”
Bank of America Corporation (NYSE:BAC) is one of the most popular bank stocks among the elite hedge funds tracked by Insider Monkey. As of the end of the third quarter of 2022, 97 hedge funds had stakes in Bank of America Corporation (NYSE:BAC), compared to 99 funds in the previous quarter. The total value of these stakes was about $37 billion.
2. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Funds Having Stakes in the Company as of Q3 2022: 110
PE Ratio as of January 25: 11.41
JPMorgan Chase & Co. (NYSE:JPM) is one of the most popular bank stocks among smart money. Insider Monkey’s database of 920 funds shows that 110 hedge funds had stakes in JPMorgan Chase & Co. (NYSE:JPM), compared to 104 funds in the previous quarter. The total value of these stakes was about $6.4 billion.
JPMorgan Chase & Co. (NYSE:JPM) stock recently fell after JPMorgan Chase & Co. (NYSE:JPM) posted Q4 earnings and said that its spending in 2023 will rise when compared to 2022. In fiscal 2023, JPMorgan Chase & Co. (NYSE:JPM)’s adjusted noninterest expense is expected to come in at about ~$81 billion compared with FY2022 actual noninterest expense of $76.1 billion.
JPMorgan Chase & Co. (NYSE:JPM)’s credit card delinquency rate ticked up in December when compared to November.
As of the end of the September quarter of 2022, Ken Fisher’s hedge fund was the biggest stakeholder in JPMorgan Chase & Co. (NYSE:JPM), with an $821 million stake.
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.”
You can also take a peek at 15 Largest Plastic Manufacturing Companies in the World and 14 Countries Where Official Language is English.
