5 Most Undervalued Quality Stocks To Buy According To Hedge Funds

2. TJX Companies Inc (NYSE:TJX)

Number of Hedge Fund Investors: 71

Morgan Stanley earlier this month said in its U.S. Equity Strategy Weekly Warm-Up report that it prefers quality growth stocks over lower quality cyclicals.

TJX Companies Inc (NYSE:TJX) is one of the stocks Morgan Stanley is bullish on.

As of the end of the third quarter of 2023, 71 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in TJX Companies Inc (NYSE:TJX). The most notable hedge fund stakeholder of TJX Companies Inc (NYSE:TJX) during this period was Panayotis Takis Sparaggis’s Alkeon Capital Management which owns a $476 million stake in TJX Companies Inc (NYSE:TJX).

ClearBridge Multi Cap Growth Strategy made the following comment about The TJX Companies, Inc. (NYSE:TJX) in its Q2 2023 investor letter:

“Top heavy leadership has overshadowed weakness across much of the equity market. We took advantage of the narrow breadth in the second quarter to increase our exposure to the consumer discretionary sector with two purchases that further enhance portfolio diversification and should help support consistent performance through a full cycle.

The TJX Companies, Inc. (NYSE:TJX) is the leading off-price apparel and home furnishings retailer known for its TJ Maxx, Marshalls and HomeGoods brands, with 4,800 global locations. We see TJX as a differentiated retailer offering shoppers a combination of value and convenience with continued share gain opportunity against large addressable U.S. markets for apparel and home decor. We also see room for TJX to modestly expand margins on the back of sales leverage and as freight, shrink and wage pressures ease. While TJX is not immune to macro risks, we see the company as relatively well-positioned even in the event of an economic deterioration as benefits from better inventory availability and consumer trade-down accrue.”