In this article, we discuss 5 undervalued stocks to buy according to Paul Tudor Jones. If you want to read our discussion on Jones’ outlook on the economic environment, go to 10 Undervalued Stocks to Buy According to Billionaire Paul Tudor Jones.
5. HCA Healthcare, Inc. (NYSE:HCA)
Number of Hedge Fund Holders: 62
Tudor Investment Corp’s Holdings: $12,284,000
Percentage of Tudor Investment Corp’s Portfolio: 0.28%
PE Ratio as of July 1: 7.94
Return since June 30th: 24.7%
HCA Healthcare, Inc. (NYSE:HCA) is a Nashville, Tennessee-based entity involved in the operations of healthcare facilities through 182 hospitals and 2,300 care locations spread across 20 states in the US and UK.
In an investment note issued on July 1, Ann Hynes at Mizuho revised the price target on HCA Healthcare, Inc. (NYSE:HCA) from $260 to $210 and reiterated a Buy rating on the stock. The revised target price still provides a potential upside of nearly 20% from the last closing price. The analyst surveyed 210 physicians belonging to 14 specialties to understand the inpatient and outpatient trends during Q1 2022. The key takeaway was that although there has been an increase in the overall volume, it has not still recovered to pre-COVID levels.
HCA Healthcare, Inc. (NYSE:HCA) is trading at a PE ratio of 7.94x, which is considerably lower than the sector average of 19.41x.
First Eagle Investment Management discussed its stance on HCA Healthcare, Inc. (NYSE:HCA) in its Q3 2021 investor letter. Here’s what the firm said:
“HCA Healthcare owns and operates 185 hospitals and approximately 2,000 sites of care in the US and UK. Admissions to its facilities, depressed during the worst of the Covid-19 outbreak in 2020, have begun to rebound. HCA reported a nearly 20% year-over-year increase in admissions during the second quarter and a 14% increase in revenue, and forecast that volume would continue to improve throughout the year. We maintain our positive opinion of the company’s management team, believing them to be effective stewards of both the balance sheet and HCA’s business operations.”
As of Q1 2022, 62 hedge funds held a stake in HCA Healthcare, Inc. (NYSE:HCA).
4. Genpact Limited (NYSE:G)
Number of Hedge Fund Holders: 28
Tudor Investment Corp’s Holdings: $13,086,000
Percentage of Tudor Investment Corp’s Portfolio: 0.3%
PE Ratio as of July 1: 16.9
Return since June 30th: 5.5%
Genpact Limited (NYSE:G) is a New York-based professional services company focused on delivering digital transformation solutions at the workplace.
Tudor Investment Corp is the seventh biggest shareholder in Genpact Limited (NYSE:G). The hedge fund increased its stake in the company by 30% during Q1 2022.
Genpact Limited (NYSE:G) stock is currently trading at a P/E multiple of 16.9x as opposed to a five-year average of 19.1x. Furthermore, in the last ten years, the company’s cash flow has compounded at an average annual rate of 15.2%. Genpact Limited (NYSE:G) recently released a study highlighting the management’s confidence in maintaining the company culture in a long-term hybrid work environment.
Overall, 28 hedge funds reported owning a stake in Genpact Limited (NYSE:G) during Q1 2022.
3. TEGNA Inc. (NYSE:TGNA)
Number of Hedge Fund Holders: 44
Tudor Investment Corp’s Holdings: $15,117,000
Percentage of Tudor Investment Corp’s Portfolio: 0.35%
PE Ratio as of July 1: 9.41
Return since June 30th: -8.6%
TEGNA Inc. (NYSE:TGNA) is a Tysons Corner, Virginia-based broadcast, digital media, and marketing services company.
In February 2022, Standard General LP announced that it intends to acquire TEGNA Inc. (NYSE:TGNA) for $24 per share in cash, reflecting a potential upside of 14.3% from the last closing price as of June 30. The deal is in the process of getting approval from the media bureau of the Federal Communications Commission (FCC). The FCC is looking into how Standard General would negotiate with cable and satellite providers following the completion of the TEGNA Inc. (NYSE:TGNA) acquisition. The acquisition would provide Standard General with more than 60 broadcast licenses, and the FCC is looking into how this would serve the public interest.
In Q1 2022, TEGNA Inc. (NYSE:TGNA) posted an EPS Normalized Actual of $0.59, beating the analysts’ forecasts by $0.06. Furthermore, TEGNA Inc. (NYSE:TGNA) also surpassed the revenue estimates by $8.29 million. In a letter to shareholders in March 2021, it was revealed that the company’s total shareholder return for two years was 34.5%, significantly higher than the competitors’ median of 1.1%.
Here’s what Hourglass Capital said about TEGNA Inc. (NYSE:TGNA) in its Q1 2022 investor letter:
“At the portfolio level, clients fully invested at the start of the year saw an average return of 5.4% in the first quarter after all associated fees. I made three sales during the quarter, all for very different reasons. First, I sold the entirety of our position in TEGNA, Inc., a broadcasting and digital media business, after the company received a leveraged buyout offer by two joint-venture private equity investors, Standard General and Apollo.”
Of the 912 hedge funds in Insider Monkey’s database, 44 funds reported owning a stake in TEGNA Inc. (NYSE:TGNA) as of Q1 2022.
2. Comcast Corporation (NASDAQ:CMCSA)
Number of Hedge Fund Holders: 78
Tudor Investment Corp’s Holdings: $17,024,000
Percentage of Tudor Investment Corp’s Portfolio: 0.39%
PE Ratio as of July 1: 12.95
Return since June 30th: -18.7%
Comcast Corporation (NASDAQ:CMCSA) is a Philadelphia, Pennsylvania-based telecommunications conglomerate bringing technology and entertainment together.
On July 1, Jonathan Kees at Daiwa initiated coverage on Comcast Corporation (NASDAQ:CMCSA) stock with a price target of $43 and an Outperform rating. The analyst anticipates media companies to deliver strong growth as the pandemic eases further. Furthermore, the analyst appreciated the business diversification of Comcast Corporation (NASDAQ:CMCSA). He anticipates Comcast Corporation (NASDAQ:CMCSA) to generate free cash flow and keep up the dividend payments regardless of the macroeconomic environment.
Comcast Corporation (NASDAQ:CMCSA) reported a 14% growth in revenue during Q1 2022 and looks undervalued when compared to historical pricing multiples. The pullback in the stock price in the last year provides an attractive entry position for investors in a solid stock with a dividend yield of 2% and a share buyback plan in place.
Comcast Corporation (NASDAQ:CMCSA) was mentioned in the Q4 2021 investor letter. Here’s what the firm said:
“Weakness among our holdings in the communication services sector was the other detractor to performance. Comcast was hurt by tepid subscriber growth in its broadband business but demonstrated strong growth in free cash flow, positioning the company for accelerated capital return going forward.”
Overall, 78 hedge funds held a stake in Comcast Corporation (NASDAQ:CMCSA) as of Q1 2022.
1. Turquoise Hill Resources Ltd. (NYSE:TRQ)
Number of Hedge Fund Holders: 21
Tudor Investment Corp’s Holdings: $20,742,000
Percentage of Tudor Investment Corp’s Portfolio: 0.48%
PE Ratio as of July 1: 9.55
Return since June 30th: 14.5%
Turquoise Hill Resources Ltd. (NYSE:TRQ) is a Montreal, Canada-based mineral exploration and development entity. The company is a majority-owned subsidiary of Rio Tinto Group (NYSE:RIO). The Anglo-Australian metals and mining company is in a takeover battle for the remaining 49% stake of the company.
In Q1 2022, Turquoise Hill Resources Ltd. (NYSE:TRQ) recorded an EPS Normalized Actual of $1.37, beating the analysts’ estimates by $1.04. Furthermore, the company posted revenue of $402.65 million, outperforming the consensus estimate by $24.28 million.
On June 12, Orest Wowkodaw at Scotiabank upgraded Turquoise Hill Resources Ltd. (NYSE:TRQ) from Sector Perform to Outperform with a price target of C$44. The analyst shared that he views Turquoise Hill Resources Ltd.’s (NYSE:TRQ) risk/reward profile as “significantly more attractive” after the company’s Phase 2 CAPEX was lower than expected. This is because Wowkodaw believes that the investment proposition has a lower risk attached to it now.
On March 14, Rio Tinto presented an all-cash proposal to acquire the remaining ownership of Turquoise Hill Resources Ltd. (NYSE:TRQ). The takeover of Turquoise Hill Resources will give Rio Tinto complete ownership of Mongolia’s Oyu Tolgoi copper mine, which is 66% owned by the Canadian corporation. Rio Tinto has offered C$34 ($26.38) per share in cash, but analysts and shareholders think that the offer is too low as the stock is currently trading around the offer price.
As of Q1 2022, 22 hedge funds held a stake in Turquoise Hill Resources Ltd. (NYSE:TRQ).
You can also take a peek at 10 Stocks to Profit From Inflation and Top 10 Stock Picks of Jeffrey Diehl’s Adams Street Partners.
