In this article, we will look at 5 undervalued stocks in Ken Fisher’s 2022 portfolio. If you want to read about Ken Fisher’s investment strategies and his views on the current market situation, you can go to 10 Undervalued Stocks in Ken Fisher’s 2022 Portfolio.
5. Chevron Corporation (NYSE:CVX)
Fisher Asset Management’s Stake Value: $1,071,589,000
Percentage of Fisher Asset Management’s 13F Portfolio: 0.63%
PE Ratio as of June 14: 9.80
Number of Hedge Fund Holders: 53
As of March 31, Fisher Asset Management owns 6.58 million shares of Chevron Corporation (NYSE:CVX), which brings the fund’s stakes in the company to $1.07 billion. The investment covers 0.63% of Ken Fisher’s 13F portfolio.
On April 29, Chevron Corporation (NYSE:CVX) announced earnings for the fiscal first quarter of 2022. The company reported earnings per share of $3.36 but missed expectations by $0.08. The company reported a revenue of $54.37 billion for the quarter, up 69.76% year over year, ahead of expectations by $812.65 million.
This June, Credit Suisse analyst Manav Gupta raised his price target on Chevron Corporation (NYSE:CVX) to $202 from $190 and maintained an Outperform rating on the shares.
As of June 14, Chevron Corporation (NYSE:CVX) has returned 51.90% to investors over the past twelve months and has a forward PE ratio of 9.80, along with a dividend yield of 3.39%.
At the close of Q1 2022, 53 hedge funds were long Chevron Corporation (NYSE:CVX) with stakes worth $27.99 billion. This is compared to 53 positions in the preceding quarter with stakes worth $6.50 billion.
Here is what ClearBridge Investments had to say about Chevron Corporation (NYSE:CVX) in its recently published “Large Cap Value Strategy” first-quarter 2022 investor letter:
“The energy sector, which led a strong market in 2021, generated even more dramatic relative performance in the quarter, advancing 39% and leading the benchmark Russell 1000 Value Index. Years of restrained investment in the energy sector, combined with a strong post-pandemic recovery, contributed to the higher commodity prices. The upward pressure escalated with the Russian invasion of Ukraine. Our energy holding Chevron (NYSE:CVX) benefited from higher commodity prices and was among the top contributors to first-quarter performance.”
4. Shell Plc (NYSE:SHEL)
Fisher Asset Management’s Stake Value: $1,076,420,000
Percentage of Fisher Asset Management’s 13F Portfolio: 0.63%
PE Ratio as of June 14: 5.68
Number of Hedge Fund Holders: 37
On May 5, Shell Plc (NYSE:SHEL) released earnings for the first quarter of fiscal year 2022. The company generated a revenue of $84.20 billion, up 51.27% year over year, and outperformed expectations by $39.36 billion. Shell Plc (NYSE:SHEL) reported earnings per share of $2.40 for the quarter, ahead of expectations by $0.21.
This June, Credit Suisse analyst Amy Wong initiated coverage of Shell Plc (NYSE:SHEL) with an Outperform rating and a 3,000 GBP price target, labeling the company as her top pick in the European integrated energy market.
As of June 14, Shell Plc (NYSE:SHEL) has gained 55.87% over the past twelve months and has a PE ratio of 5.68, along with a trailing twelve-month dividend yield of 1.75%.
In the first quarter of 2022, Fisher Asset Management went long in Shell Plc (NYSE:SHEL) and purchased 19.59 million shares of the company. As of March 31, the fund’s stakes in Shell Plc (NYSE:SHEL) are valued at $1.07 billion, which covers 0.63% of its investment portfolio.
At the end of Q1 2022, 37 hedge funds disclosed ownership of stakes in Shell Plc (NYSE:SHEL). The total stakes of these hedge funds in the company were valued at $5.63 billion, up from $2.63 billion in the prior quarter with 41 positions.
Grantham Mayo Van Otterloo & Co. LLC, an asset management firm, recently published its first-quarter 2022 investor letter in which it mentioned Shell Plc (NYSE:SHEL). Here is what the firm had to say:
“The market is simply not valuing resource companies at reasonable levels given any plausible base case for how the world might play out, in our opinion. With oil prices up around 65% and natural gas prices up hundreds of percent since the beginning of 2020, Shell (NYSE:SHEL), a bellwether for the oil and gas industry, is more or less flat. With the movement in oil and gas prices, one would have expected Shell’s stock price to surge. It didn’t, however, leaving Shell at very attractive valuation levels. At commodity prices as of the end of the first quarter, Shell would be cranking out free cash flow yields of 22-23% for the next few years according to our models.”
3. Rio Tinto Group (NYSE:RIO)
Fisher Asset Management’s Stake Value: $1,135,966,000
Percentage of Fisher Asset Management’s 13F Portfolio: 0.67%
PE Ratio as of June 14: 5.93
Number of Hedge Fund Holders: 26
Hedge funds are bullish on Rio Tinto Group (NYSE:RIO). At the close of Q1 2022, 26 hedge funds held stakes in the company worth $2.54 billion. This is compared to 22 positions in the previous quarter with stakes worth $1.83 billion. The hedge fund sentiment for the stock is positive.
On June 8, Rio Tinto Group (NYSE:RIO) announced that it is actively seeking proposals to develop large-scale wind and solar power facilities in Central and Southern Queensland to support its aluminum properties in the region: the Boyne smelter, the Yarwun alumina refinery, and the Queensland Alumina refinery. The company believes this will facilitate meeting its green-energy goals of achieving carbon neutrality by 2050. The company’s mineral assets in the region require 1140 megawatts of uninterrupted power to operate, which is the same as 4000 megawatts of reliable wind or solar power.
As of June 14, Rio Tinto Group (NYSE:RIO) has returned 4.45% to investors over the past six months and has a forward dividend yield of 12.12% along with a PE ratio of 5.93.
On June 7, Jefferies analyst Christopher LaFemina upgraded Rio Tinto Group (NYSE:RIO) to Buy from Hold and raised his price target to $93, up from $92.
As of March 31, Fisher Asset Management is the most bullish hedge fund on Rio Tinto Group (NYSE:RIO) owning over 14.12 million shares of the company. The fund’s stakes in Rio Tinto Group (NYSE:RIO) were valued at $1.13 billion, up 5% from its Q4 2021 stakes.
2. TotalEnergies SE (NYSE:TTE)
Fisher Asset Management’s Stake Value: $1,316,605,000
Percentage of Fisher Asset Management’s 13F Portfolio: 0.77%
PE Ratio as of June 14: 4.54
Number of Hedge Fund Holders: 20
TotalEnergies SE (NYSE:TTE) operates as an oil and gas company worldwide. The company’s primary business segments are Integrated Gas, Renewables & Power, Exploration & Production, Refining & Chemicals, and Marketing & Services. On April 28, TotalEnergies SE (NYSE:TTE) posted earnings for the first quarter of fiscal year 2022. The company reported earnings per share of $3.40, beating expectations by $0.61. The company’s revenue for the quarter came in at $63.95 billion, up 65.53% year over year, and beat Wall Street consensus by $6.17 billion.
As of June 14, TotalEnergies SE (NYSE:TTE) has gained 11.63% over the past twelve months, has a forward PE ratio of 4.54, and a trailing-twelve-month dividend yield of 5.43%.
This June, Credit Suisse analyst Amy Wong initiated coverage of TotalEnergies SE (NYSE:TTE) with an Outperform rating and a EUR 60 price target. The analyst noted that the market appears to be overlooking the company and that its growth story merits more appreciation, at current share levels. Wong further noted that TotalEnergies SE (NYSE:TTE) offers a solid growth profile among oil and gas giants, which is supported by its hefty upstream investment in the 2010s.
Hedge funds are raising their stakes in TotalEnergies SE (NYSE:TTE). At the end of Q1 2022, 20 hedge funds held stakes in TotalEnergies SE (NYSE:TTE) worth $1.77 billion. This is compared to 17 hedge funds in Q4 2021 with stakes worth $1.58 billion. The hedge fund sentiment for the stock is positive.
In the first quarter of 2022, Fisher Asset Management raised its stakes by 5% in TotalEnergies SE (NYSE:TTE), bringing them to $1.31 billion. Fisher Asset Management is also the top shareholder in the company and the investment covers 0.77% of its 13F portfolio.
1. Freeport-McMoRan Inc. (NYSE:FCX)
Fisher Asset Management’s Stake Value: $2,524,330,000
Percentage of Fisher Asset Management’s 13F Portfolio: 1.48%
PE Ratio as of June 14: 9.66
Number of Hedge Fund Holders: 68
At the close of Q1 2022, 68 hedge funds were bullish on Freeport-McMoran Inc. (NYSE:FCX). These funds held collective stakes worth $4.10 billion in the company, up from $3.77 billion in the previous quarter with 66 positions. The hedge fund sentiment for the stock is positive.
This April, Freeport-McMoran Inc. (NYSE:FCX) posted gains for the first quarter of fiscal year 2022. The company’s revenue for the quarter amounted to $6.60 billion, up 36.14% year over year, and outperformed market consensus by $148.02 million. Freeport-McMoran Inc. (NYSE:FCX) registered an EPS of $1.07, ahead of Wall Street expectations by $0.15. Moreover, as of June 14, Freeport-McMoran Inc. (NYSE:FCX) has a forward price-to-earnings ratio of 9.66.
On June 9, Credit Suisse analyst Curt Woodworth raised his price target on Freeport-McMoran Inc. (NYSE:FCX) to $38 from $32 and upgraded the stock to Neutral from Underperform. Woodworth noted that he sees copper prices to sit at higher levels in the medium term which makes the risk/reward ratio for copper bullish, and the risk/reward ratio for Freeport-McMoran Inc. (NYSE:FCX) “more neutral”.
As of Q1 2022, Fisher Asset Management is the top shareholder in Freeport-McMoran Inc. (NYSE:FCX), owning over 50.75 million shares of the company. As of March 31, the fund’s stakes in the company are valued at $2.52 billion, up 4% from the fund’s Q4 2021 stakes. Freeport-McMoran Inc. (NYSE:FCX) covers 1.48% of Ken Fisher’s 13F portfolio.
Here is what Horizon Kinetics LLC, an investment management firm, said about Freeport-McMoran Inc. (NYSE:FCX) in its fourth-quarter 2021 investor letter:
“Those were some ideas about copper demand. Here are some specifics about supply. Global copper mine production in the 10 years from 2005 to 2015 rose 2.45% annually. In the next 5 years, to 2020, it increased by only 0.9% annually. Even ignoring the 2020 pandemic year, for the 4 years from to 2019, the expansion rate was 1.66%. We already have the historical context for this: the commodity price collapse prior to 2015, from a position of excess capacity.
What producers must do in that situation, because they have high fixed costs and debt expense, is curtail their exploration and development expenditures and reduce operating costs. They rely on existing mines, instead, and on their highest-grade ores and lowest-cost production. They might not actually reduce current production, but they aren’t replacing the reserves that are being slowly drawn down. You can see this at work at the individual company level.
Freeport-McMoRan will illustrate. It is the world’s third-largest copper producer, closely following Chile’s Codelco and Australia’s BHP Group. In 2014, even though Freeport sold more copper than the prior year, its revenues dropped by over 25%, and it went from $4.8 billion of operating earnings (a 22% margin) to a $(0.2) billion loss. The company’s capital expenditures peaked in 2014 at $3.86 billion and will be about $1.72 billion in 2021, meaning the company is spending 55% less now than it was seven years ago. In inflation-adjusted terms, it’s spending 61% less today than seven years ago…” (Click here to see the full text)
You can also take a look at 10 Cheap Value Stocks To Buy According To Seth Klarman and 11 Best Value Stocks To Buy According To Warren Buffett.
