5 Most Undervalued Quality Stocks To Buy According To Hedge Funds

2. Occidental Petroleum Corporation (NYSE:OXY)

Number of Hedge Fund Holders: 74

P/E Ratio as of January 25: 5.31

Occidental Petroleum Corporation (NYSE:OXY) engages in the acquisition, exploration, and development of oil and gas properties in the United States, the Middle East, Africa, and Latin America. It operates through three segments – Oil and Gas, Chemical, and Midstream and Marketing. Occidental Petroleum Corporation (NYSE:OXY) is one of the most undervalued quality stocks to buy according to hedge funds. 

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. The analyst said that while the potential for gains is not as high as it was in 2020, his revised price target positions the shares at the higher end of their relative value compared to competitors. He also views Occidental Petroleum Corporation (NYSE:OXY) as relatively defensive compared to other companies in the industry, as their unhedged oil leverage allows for value transfer from debt and preferred equity and less volatility as the capital structure is being reset.

According to Insider Monkey’s data, 74 hedge funds were bullish on Occidental Petroleum Corporation (NYSE:OXY) at the end of September 2022, compared to 66 funds in the last quarter. 

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!”