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

In this article, we discuss 5 most undervalued large cap stocks to buy according to hedge funds. If you want to see more stocks in this selection, 15 Most Undervalued Large Cap Stocks To Buy According To Hedge Funds. 

5. ConocoPhillips (NYSE:COP)

Number of Hedge Fund Holders: 64

P/E Ratio as of January 24: 8.50

ConocoPhillips (NYSE:COP) was founded in 1917 and is headquartered in Houston, Texas. The company explores for, produces, transports, and markets crude oil, bitumen, natural gas, liquefied natural gas, and natural gas liquids worldwide. At the end of November 2022, ConocoPhillips (NYSE:COP) and QatarEnergy announced agreements to supply 2 million metric tons of liquefied natural gas per year to Germany for 15 years starting in 2026, as Germany seeks to cover future gas needs following the conclusion of its energy relationship with Russia. ConocoPhillips (NYSE:COP) is one of the most undervalued large cap stocks to invest in. 

On January 23, Barclays analyst Jeanine Wai raised the firm’s price target on ConocoPhillips (NYSE:COP) to $160 from $151 and kept an Overweight rating on the shares. The analyst expects a weaker Q4 for the integrated oil and exploration and production sector compared to Q3, but the key factors for the sector’s investment thesis such as capital discipline and cash returns, support a positive view.

According to Insider Monkey’s data, ConocoPhillips (NYSE:COP) was part of 64 hedge fund portfolios at the end of Q3 2022, compared to 71 in the last quarter. Ken Fisher’s Fisher Asset Management is the biggest stakeholder of the company, with nearly 7 million shares worth $708.5 million. 

In its Q1 2022 investor letter, Diamond Hill Capital, an asset management firm, highlighted a few stocks and ConocoPhillips (NYSE:COP) was one of them. Here is what the fund said:

“We redeployed capital into ConocoPhillips (NYSE:COP), which was trading at a discount to our estimate of intrinsic value and is well positioned over the long run due to its low-risk asset base.”

4. Intel Corporation (NASDAQ:INTC)

Number of Hedge Fund Holders: 69

P/E Ratio as of January 24: 9.27

Intel Corporation (NASDAQ:INTC) is a California-based company engaged in the design, manufacture, and sale of computer and technology products worldwide. On January 23, Truist analyst William Stein raised the price target on Intel Corporation (NASDAQ:INTC) to $33 from $29 and kept a Hold rating on the shares as part of a broader research note and a more positive outlook for Semis and AI names. 

According to Insider Monkey’s Q3 data, 69 hedge funds were long Intel Corporation (NASDAQ:INTC), compared to 65 funds in the prior quarter. John Overdeck and David Siegel’s Two Sigma Advisors is the largest stakeholder of the company, with 15.15 million shares worth $390.5 million. 

In its Q3 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Intel Corporation (NASDAQ:INTC) was one of them. Here is what the fund said:

“Also on the detractor side, Intel Corporation (NASDAQ:INTC) delivered a disappointing revenue miss and lowered full-year revenue and earnings guidance as COVID-19-driven demand for PCs abated (where Intel enjoys half its sales) and a delay in its flagship Sapphire Rapids CPU hurt its data center business. Despite these issues, we still believe Intel is an economically sensitive turnaround story with substantial upside.”

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.”

2. Occidental Petroleum Corporation (NYSE:OXY)

Number of Hedge Fund Holders: 74

P/E Ratio as of January 24: 5.37

Occidental Petroleum Corporation (NYSE:OXY) is a Texas-based company engaged in the acquisition, exploration, and development of oil and gas properties in the United States, the Middle East, Africa, and Latin America. On January 6, BofA analyst Doug Leggate upgraded Occidental Petroleum Corporation (NYSE:OXY) to Buy from Neutral with a price target of $80, down from $82. He noted that while the potential for gains is not as high as it was in 2020, the new price target values the shares at a premium compared to similar companies. He also views Occidental Petroleum Corporation (NYSE:OXY) as more stable than its peers, as the company’s strategies for managing debt and preferred equity make it less vulnerable to market fluctuations and allows for more efficient transfer of value.

According to Insider Monkey’s Q3 data, 74 hedge funds were bullish on Occidental Petroleum Corporation (NYSE:OXY), compared to 66 funds in the last quarter. Warren Buffett’s Berkshire Hathaway is the largest stakeholder of the company, with 194.35 million shares worth $12 billion. 

Here is what Smead Value Fund has to say about Occidental Petroleum Corporation (NYSE:OXY) in its Q3 2022 investor letter:

“Our top-performing stocks in the quarter include Occidental Petroleum (NYSE:OXY). Oil and gas have been the best game in the stock market town this year and it was a pleasant surprise to see home builders pick up even with dour news on interest rates and the economy. For the first three quarters of the year, we should change the name of our fund to the Jed Clampett Fund. Occidental Petroleum (NYSE:OXY), was one of the standouts. Up through the bear market came a “bubblin’ crude!”

1. General Motors Company (NYSE:GM)

Number of Hedge Fund Holders: 74

P/E Ratio as of January 24: 6.19

General Motors Company (NYSE:GM) is a Michigan-based company that designs, manufactures, and sells trucks, crossovers, cars, and automobile parts in North America, the Asia Pacific, the Middle East, Africa, South America, the United States, and China. On January 4, General Motors Company (NYSE:GM) announced that it delivered 2.2 million vehicles in the United States in 2022, exceeding Toyota Motor Corporation (NYSE:TM). It is one of the most undervalued large cap stocks to invest in. 

On January 19, Deutsche Bank’s analyst Emmanuel Rosner maintained a Hold rating on General Motors Company (NYSE:GM) and reduced the price target on the shares from $35 to $33. He anticipates that the fourth quarter earnings and 2023 guidance for the US auto industry as a whole will be mixed, with a number of firms potentially falling short of quarterly consensus estimates, and most likely providing cautious guidance for 2023 due to ongoing challenges and uncertain macroeconomic conditions in the industry.

According to Insider Monkey’s Q3 data, 74 hedge funds were long General Motors Company (NYSE:GM), compared to 75 funds in the prior quarter. Harris Associates is a prominent stakeholder of the company, with 41.5 million shares worth $1.3 billion. 

Here is what Diamond Hill Capital had to say about General Motors Company (NYSE:GM) in its Q3 2022 investor letter:

“Most recently, we initiated a position in General Motors Company (NYSE:GM), one of the largest automakers in the United States. Over the past several years, GM has taken steps necessary to focus the company on the most profitable segments and move into position to compete in an electrified and autonomous world. With the recent rise in interest rates there was a meaningful selloff in the auto industry, which presented us with an attractive entry point to a name we know well.”

Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily enewsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also check out 12 Cheap Bank Stocks To Buy and 12 Best Low Priced Dividend Stocks To Buy.