In this article, we discuss 5 undervalued non-tech stocks to buy in 2022. If you want to read about some more non-tech undervalued stocks, go directly to 10 Undervalued Non-Tech Stocks to Buy in 2022.
5. Ovintiv Inc. (NYSE:OVV)
Number of Hedge Fund Holders: 44
PE Ratio: 8.32
Ovintiv Inc. (NYSE:OVV) markets oil and natural gas. The firm has an impressive dividend history that stretches back over three decades. In the past four years, the dividend payouts have registered consistent growth. The sector median in this regard is just one year. On May 9, the company declared a quarterly dividend of $0.25 per share, an increase of around 25% from the previous dividend of $0.20. The forward yield was 2.11%. The dividend is payable to shareholders by the end of June.
On April 26, Citi analyst Scott Gruber maintained a Buy rating on Ovintiv Inc. (NYSE:OVV) stock and raised the price target to $64 from $46, citing updated models for small-cap exploration and production companies as one of the reasons behind the upgrade.
At the end of the fourth quarter of 2021, 44 hedge funds in the database of Insider Monkey held stakes worth $1 billion in Ovintiv Inc. (NYSE:OVV), the same as in the previous quarter worth $684 million.
In its Q4 2021 investor letter, Miller Value Partners, an asset management firm, highlighted a few stocks and Ovintiv Inc. (NYSE:OVV) was one of them. Here is what the fund said:
“The outlook for high multiple favorites depends to a great degree on interest rates. Warren Buffett likened interest rates to the force of gravity for asset prices. At current low levels, high valuations on long-duration assets can be justified. If interest rates move up, the adjustment will be painful. Market action early in the new year, with the swift moves up in interest rates and down in the Nasdaq, offers a taste of the medicine.
We underwrite all our names to have sufficient upside even if risk-free rates move up to 3% (a scenario, not a forecast!). As we evaluate the opportunity set, we find more attractive prospects in the classic value names. We often hear that people think value investing is dead, which only strengthens our conviction. Our gross exposure to classic value has risen from 44% a year ago to 62% currently.” (Click here to read full text)
4. Target Corporation (NYSE:TGT)
Number of Hedge Fund Holders: 49
PE Ratio: 15.55
Target Corporation (NYSE:TGT) is a general merchandise retailer. The company posted earnings for the first quarter of 2022 on May 18, reporting a revenue of $25.1 billion, up close to 4% compared to the revenue over the same period last year and beating expectations by $690 million. The comparable sales over the first three months of 2022 grew 3.3%, reflecting traffic growth of 3.9%. The digital comparable sales were also up by 3.2%. The firm expects operating income margin rate to be around 6% in 2022.
On May 19, Bank of America analyst Robert Ohmes maintained a Buy rating on Target Corporation (NYSE:TGT) stock and lowered the price target to $235 from $289, noting that food inflation would continue to benefit traffic and comp sales.
Among the hedge funds being tracked by Insider Monkey, Florida-based GQG Partners is a leading shareholder in Target Corporation (NYSE:TGT), with 4.9 million shares worth more than $1.1 billion.
In its Q2 2021 investor letter, Nelson Capital Management, an asset management firm, highlighted a few stocks and Target Corporation (NYSE:TGT) was one of them. Here is what the fund said:
“We added Target Corporation (NYSE:TGT) to our consumer staples sector. Target Corporation (NYSE:TGT) offers a broad array of products in owned and known brand items at affordable prices. Its omni-channel fulfillment centers allow customers to receive their items via in-store pickup, curbside pickup, same-day shipping and regular shipping while simultaneously reducing operating costs. With a significantly lower valuation than peers and a unique operating strategy, Target Corporation (NYSE:TGT) is an attractive holding.”
3. Starbucks Corporation (NASDAQ:SBUX)
Number of Hedge Fund Holders: 53
PE Ratio: 19.57
Starbucks Corporation (NASDAQ:SBUX) is a specialty coffee firm. The stock has gained in the past few days after Howard Schultz, the CEO of the firm, purchased more than 137,000 shares of the company in two separate transactions. The average price paid for these shares, worth around $10 million in total, was $72.61 and $73.10 per share in the two transactions. Unionization and COVID-related problems, especially in China, have hit the stock in recent months, but strength of the business in the US is offsetting some of these setbacks.
On May 4, MKM Partners analyst Brett Levy maintained a Buy rating on Starbucks Corporation (NASDAQ:SBUX) stock and lowered the price target to $98 from $105, backing the firm with regards to growth prospects in the long-term despite near-term headwinds.
Among the hedge funds being tracked by Insider Monkey, London-based investment firm Fundsmith LLP is a leading shareholder in Starbucks Corporation (NASDAQ:SBUX), with 11.5 million shares worth more than $1.3 billion.
In its Q2 2021 investor letter, Polen Capital, an asset management firm, highlighted a few stocks and Starbucks Corporation (NASDAQ:SBUX) was one of them. Here is what the fund said:
“For Starbucks Corporation (NASDAQ:SBUX), we believe the underlying businesses for the company remain strong. Starbucks Corporation (NASDAQ:SBUX) has grappled with the impact of the pandemic, but results have continued to show an ongoing post-pandemic recovery.”
2. AT&T Inc. (NYSE:T)
Number of Hedge Fund Holders: 70
PE Ratio: 8.52
AT&T Inc. (NYSE:T) is a telecommunications and media firm. On May 18, the company announced that it had reached an agreement with the Dish Network under which the latter will sell internet services of the former. Last year, the two companies had agreed to a $5 billion deal through which Dish made AT&T the primary partner for mobile virtual network operations. The internet services that Dish sells also include premier options like AT&T Fiber with Hyper-Gig speeds.
On April 25, Goldman Sachs analyst Brett Feldman reinstated coverage of AT&T Inc. (NYSE:T) stock with a Buy rating and a $23 price target, noting the valuation of the stock was attractive compared to large-cap peers.
At the end of the fourth quarter of 2021, 70 hedge funds in the database of Insider Monkey held stakes worth $4.9 billion in AT&T Inc. (NYSE:T), compared to 66 in the preceding quarter worth $3.2 billion.
In its Q4 2021 investor letter, Weitz Investment Management, an asset management firm, highlighted a few stocks and AT&T Inc. (NYSE:T) was one of them. Here is what the fund said:
“After several quarters of pandemic-induced outsized growth, new broadband connection growth has slowed for U.S. cable operators. This slower growth has coincided with a renewed push by competitors like Verizon and AT&T Inc. (NYSE:T) to offer high-speed data (either via wireless connects or by building new fiber-optic networks).”
1. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 71
PE Ratio: 15.10
Exxon Mobil Corporation (NYSE:XOM) is an integrated oil and gas firm. The stock has gained over 41% this year as inflation due to supply chain problems and the war in Ukraine boosted energy prices across the globe. The firm is on track to generate over $50 billion in free cash flows this year. This will allow the company to pay the planned $15 billion in dividends in 2022 and complete a $15 billion share buyback program. The firm has been investing heavily in the core business as well, like refining projects in the Netherlands and Texas.
On May 9, Argus analyst Bill Selesky maintained a Buy rating on Exxon Mobil Corporation (NYSE:XOM) stock and raised the price target to $104 from $92, noting that the firm is set to benefit from strong energy market fundamentals.
At the end of the fourth quarter of 2021, 71 hedge funds in the database of Insider Monkey held stakes worth $5.3 billion in Exxon Mobil Corporation (NYSE:XOM), compared to 64 in the preceding quarter worth $4.6 billion.
In its Q4 2021 investor letter, Saturna Capital highlighted a few stocks and Exxon Mobil Corporation (NYSE:XOM) was one of them. Here is what the fund said:
“Few companies maintain their position at the top for more than a decade or two. One that did was Exxon Mobil Corporation (NYSE:XOM), which appeared decennially from 1980 through 2010. In 2019 it was ranked 10th, but as of writing has dropped to 39th place.”
You can also take a peek at 12 Best Environmental Stocks to Invest In and 10 Best Nickel Stocks to Buy Now.
