In this article, we will discuss our list of the 5 undervalued stocks to buy now. If you want to read our comprehensive analysis of undervalued stocks, go directly to 10 Undervalued Stocks to Buy Now.
5. Daqo New Energy Corp. (NYSE:DQ)
Number of Hedge Fund Holders: 18
PE Ratio: 4.69
Daqo New Energy Corp. (NYSE:DQ) is a Shanghai-based holding company which makes and sells polysilicon products. The firm posted an EPS of $3.84 for the third quarter, beating estimates by $1.19. Daqo New Energy Corp. (NYSE:DQ) posted $585.78 million in revenue for Q3, which beat consensus estimates by $37.55 million.
As of the third quarter, 18 hedge funds were long Daqo New Energy Corp. (NYSE:DQ), as compared to 17 hedge funds a quarter ago.
4. Dell Technologies Inc. (NYSE:DELL)
Number of Hedge Fund Holders: 60
PE Ratio: 6.9
Dell Technologies Inc. (NYSE:DELL) is a holding company that provides IT solutions, products, and services around the globe. The Texas-based company operates through its segments: Infrastructure Solutions Group (ISG), Client Solutions Group (CSG), and VMware.
For the third quarter, Dell Technologies Inc. (NYSE:DELL) reported earnings per share of $2.37, beating estimates by $0.07.
On November 24, BofA analyst Wamsi Mohan maintained a ‘Buy’ rating on Dell Technologies Inc. (NYSE:DELL) shares, and raised the price target to $68 from $66, noting that PC demand was expected to sustain into the next year, as the company’s Q3 results beat estimates.
60 hedge funds tracked by Insider Monkey held stakes worth $6.14 billion in Dell Technologies Inc. (NYSE:DELL) at the end of the third quarter. In comparison, 62 hedge funds held $5.60 billion worth of stakes in the company a quarter ago.
Investment management firm Third Point Management mentioned Dell Technologies Inc. (NYSE:DELL) in its Q3 investor letter. Here’s what the fund said:
“Michael Dell has created substantial value for shareholders since re-listing the company several years ago. Earlier this year, Dell Technologies announced that it would be spinning its $50 billion stake in VMWare, which we believe will unlock the underappreciated value of the Dell server and PC businesses. Dell’s best attribute has been strong free cash flow generation, which the company has used to de-lever and create significant latent value for equity holders. Looking ahead, we believe this core Dell business, which still trades at a discount to its hardware peer group, should instead command a premium multiple thanks to its leading market share, profitability, and impressive execution. There are few large cap companies which possess a nearly 10% FCF yield, 2.5% dividend yield and 1.5x leverage ratio; Dell is one of them.”
3. A10 Networks, Inc. (NYSE:ATEN)
Number of Hedge Fund Holders: 14
PE Ratio: 12.87
Next up is A10 Networks, Inc. (NYSE:ATEN) which offers cybersecurity, cloud storage and enterprise solutions to customers around the world. A10 Networks, Inc. (NYSE:ATEN) shares have gained more than 100% since April 2020, trading at $16.19 on the New York Stock Exchange as of January 4. Cybersecurity firms, in particular A10 Networks, Inc. (NYSE:ATEN), are on a growth trajectory as businesses and governments around the globe face increasing risks of cyberattacks.
In the third quarter of 2021, A10 Networks, Inc. (NYSE:ATEN) reported earnings per share of $0.17, exceeding estimates by $0.03. Quarterly revenue of $65.36 million outperformed estimates by $2.86 million. 14 hedge funds were bullish on the company stock at the end of the third quarter, with combined positions worth $188.83 million. VIEX Capital Advisors is the leading shareholder of A10 Networks, Inc. (NYSE:ATEN) stock, with roughly 7.7 million shares worth $103.7 million.
In October, BWS Financial analyst Hamed Khorsand maintained a ‘Buy’ rating on A10 Networks, Inc. (NYSE:ATEN) shares, increasing the price target to $20 from $17. The company has made efforts to reorient its products and sales team towards security add-ons, and this has put the firm in a better position to meet the demands of the cybersecurity market. A10 Networks, Inc. (NYSE:ATEN)’s ADCs (Application Delivery Controllers) are becoming increasingly popular in data centers, resulting in record revenues for the company despite a competitive market.
2. Jabil Inc. (NYSE:JBL)
Number of Hedge Fund Holders: 27
PE Ratio: 14.12
Jabil Inc. (NYSE:JBL) is a Florida-based company that deals in the provision of manufacturing services and solutions around the world. The firm posted an EPS of $1.92 for the third quarter, beating estimates by $0.12. Revenue figure of $8.57 billion for Q3 was also above estimates by $284.50 million.
On December 17, Raymond James analyst Melissa Fairbanks upped the firm’s price target on Jabil Inc. (NYSE:JBL), and reiterated a ‘Strong Buy’ rating on the stock. Melissa believes that recent diversification efforts by the company have set it up to gain from long-term secular growth trends across various end markets.
In December, research firm Citi put Jabil Inc. (NYSE:JBL) on its list of top IT hardware stock picks for 2022. The firm’s analyst Jim Suva noted that the company has been recently gaining a lot of market share, and this will only progress as the year goes by.
27 hedge funds were long Jabil Inc. (NYSE:JBL) at the end of the third quarter, with a combined holding value of $517.37 million. This is in comparison to 26 hedge funds holding $513.61 million at the end of Q2 2021.
1. HP Inc. (NYSE:HPQ)
Number of Hedge Fund Holders: 34
PE Ratio: 7.13
At the end of the third quarter, 34 hedge funds out of 867 tracked by Insider Monkey reported ownership of stakes in HP Inc. (NYSE:HPQ), with a combined value of $1.04 billion.
HP Inc. (NYSE:HPQ) is a tech company that offers personal computers, printers and various other products and services through its segments: Personal Systems, Printing, and Corporate Investments.
On November 24, Evercore ISI analyst Amit Daryanani set a $40 price target on HP Inc. (NYSE:HPQ), up from $35. The analyst kept his firm’s ‘Outperform’ rating on the company stock, seeing the tech giant poised to deliver upside on revenue, free cash flow and EPS as long as growth remains flat to modest on PCs. The analyst noted that supply chain issues would likely persist till mid 2022, hampering the company’s ability to supply PCs to true end-demand.
You can also take a look at 10 Emerging Energy Technologies You Can Invest In Today and Value Investor Bill Miller’s Top 10 Stock Picks.
