5 Most Undervalued Large Cap Stocks To Buy According To Hedge Funds

3. Chesapeake Energy Corporation (NASDAQ:CHK)

Number of Hedge Fund Holders: 70

P/E Ratio as of January 24: 5.56

Chesapeake Energy Corporation (NASDAQ:CHK) is a standalone company that acquires, searches for, and develops properties for extracting oil, natural gas, and natural gas liquids from underground reservoirs in the United States. On January 18, Chesapeake Energy Corporation (NASDAQ:CHK) announced that it has agreed to sell part of its Brazos Valley operations in Texas to WildFire Energy for $1.4 billion. It is one of the most undervalued large cap stocks to buy according to hedge funds. 

On January 24, Wells Fargo analyst Roger Read started coverage of Chesapeake Energy Corporation (NASDAQ:CHK) with a positive outlook, assigning it an Overweight rating and a $117 price target. The analyst believes that the company’s restructuring efforts and other advantages outweigh the short-term risks related to an oversupply of natural gas.

According to Insider Monkey’s data, 70 hedge funds were bullish on Chesapeake Energy Corporation (NASDAQ:CHK) at the end of September 2022, compared to 67 funds in the prior quarter. Howard Marks’ Oaktree Capital Management is the leading position holder in the company, with 9.80 million shares worth $923.25 million. 

Carillon Tower Advisers made the following comment about Chesapeake Energy Corporation (NASDAQ:CHK) in its Q3 2022 investor letter:

“Chesapeake Energy Corporation (NASDAQ:CHK), a natural gas exploration and production company, emerged from bankruptcy with little fanfare in 2021, despite having rid itself of its debt burden and onerous pipeline contracts. The company was able to make two large acquisitions at very reasonable prices within its core producing areas, allowing for scale and cost savings. Then in 2022, natural gas prices began to rise well above expectations, increasing the value of Chesapeake’s large natural gas resources and production and contributing to its outperformance.”