In this article, we discuss the 5 undervalued stocks to buy today. If you want to read our detailed analysis of these stocks, go directly to the 10 Undervalued Stocks to Buy Today.
5. Westlake Chemical Corporation (NYSE:WLK)
Number of Hedge Fund Holders: 35
PE Ratio: 8.91
Westlake Chemical Corporation (NYSE:WLK) is a commodity chemicals firm. Wells Fargo analyst Michael Sison recently raised the price target on the stock to $130 from $125 and kept an Overweight rating on the shares, noting the “record quarter” for earnings and improved guidance as some of the catalysts that will provide the firm with increased momentum heading into the new year.
Westlake Chemical Corporation (NYSE:WLK) also recently announced that it would acquire assets from Boral, a building materials firm, for $2 billion. The purchase is part of a diversification strategy of the company given recent improved margins.
At the end of the second quarter of 2021, 35 hedge funds in the database of Insider Monkey held stakes worth $269 million in Westlake Chemical Corporation (NYSE:WLK), up from 26 in the previous quarter worth $410 million.
4. Bunge Limited (NYSE:BG)
Number of Hedge Fund Holders: 40
PE Ratio: 6.06
Bunge Limited (NYSE:BG) is an agricultural products and food firm. It has strong fundamentals, recently smashing analyst expectations on earnings per share and revenue. It also declared a quarterly dividend of $0.525 per share, in line with previous. The forward yield was 2.27%. The firm is investing in renewables as well. In September, it had announced that it was pursuing a joint venture with energy giant Chevron for the development of low carbon intensity feedstocks.
BMO Capital analyst Kenneth Zaslow recently raised the price target on Bunge Limited (NYSE:BG) stock to $108 from $98 and kept an Outperform rating on the shares, highlighting surging margins and higher demand as some of the growth catalysts for the company in 2022.
At the end of the second quarter of 2021, 40 hedge funds in the database of Insider Monkey held stakes worth $399 million in Bunge Limited (NYSE:BG), down from 44 in the preceding quarter worth $653 million.
3. LyondellBasell Industries N.V. (NYSE:LYB)
Number of Hedge Fund Holders: 41
PE Ratio: 5.51
LyondellBasell Industries N.V. (NYSE:LYB) is a Texas-based chemicals firm. It posted earnings for the third quarter in late October, reporting a revenue of $12.7 billion, up over 87% year-on-year and beating market estimates by $1.3 billion. The stock will likely benefit from plans that seek to reduce the carbon footprint of the firm. In late September, the company had announced that it would be setting in motion a strategy to reduce emissions by 30% till 2030 and eventually move towards net zero emissions.
Wells Fargo analyst Michael Sison has an Overweight rating on LyondellBasell Industries N.V. (NYSE:LYB) stock with a price target of $120. In an investor note penned in early November, the analyst said the firm was well-positioned to weather near-term headwinds compared to peers.
Among the hedge funds being tracked by Insider Monkey, New York-based firm Eagle Capital Management is a leading shareholder in LyondellBasell Industries N.V. (NYSE:LYB) with 2.9 million shares worth more than $301 million.
2. D.R. Horton, Inc. (NYSE:DHI)
Number of Hedge Fund Holders: 45
PE Ratio: 8.68
D.R. Horton, Inc. (NYSE:DHI) is a homebuilding company. The firm has an impressive dividend history and recently declared a quarterly dividend of $0.225 per share, an increase of more than 12% from the previous dividend of $0.200 per share. It has also smashed market estimates on earnings per share and revenue for the third quarter and raised guidance, earning bullish ratings from Citi, Barclays, and Bank of America.
Even though D.R. Horton, Inc. (NYSE:DHI) has had a stop-and-start year so far, JPMorgan has forecast that the homebuilding pricing and demand will continue to be strong for the next two years overall, driving the revenue of firms like DR Horton.
Among the hedge funds being tracked by Insider Monkey, London-based investment firm Egerton Capital Limited is a leading shareholder in D.R. Horton, Inc. (NYSE:DHI) with 8.3 million shares worth more than $752 million.
1. Lennar Corporation (NYSE:LEN)
Number of Hedge Fund Holders: 50
PE Ratio: 8.24
Lennar Corporation (NYSE:LEN) is a Florida-based homebuilder. Bank of America recently reinstated coverage of the stock with a Buy rating and a price target of $120, noting the “leading market position” of the firm in the homebuilding market and investment into tech as some of the reasons why the stock would likely outperform peers in the coming months. Rafe Jadrosich, an analyst at the firm, issued the ratings update.
In the past week, mortgage rates have gone below 3%, indicating that the demand for housing will remain strong in the coming year and benefit stocks like Lennar Corporation (NYSE:LEN), according to a senior economist at Freddie Mac.
At the end of the second quarter of 2021, 50 hedge funds in the database of Insider Monkey held stakes worth $1.9 billion in Lennar Corporation (NYSE:LEN), up from 49 the preceding quarter worth $1.5 billion.
You can also take a peek at 10 Companies that Benefit From Crypto Mining and 10 Best Blue Chip Dividend Stocks Hedge Funds are Buying.
