5 Value Stocks That Are Too Cheap To Ignore

3. CVS Health Corporation (NYSE:CVS)

Number of Hedge Fund Holders: 65

CVS Health Corporation (NYSE:CVS) is a healthcare company that operates pharmacies, sells prescription and over the counter drugs, and provides health plans. The firm is headquartered in Woonsocket, Rhode Island, the United States.

CVS Health Corporation (NYSE:CVS) is one of the strongest performing stocks in the healthcare sector, and its shares have appreciated by 5% over the past year, outperforming the Health Care Select Sector ETF fund which has posted a loss over the same time period. The consensus Wall Street share price target for the company sits at $122 per share, which is significantly higher than the current share price of $91.68.

CVS Health Corporation (NYSE:CVS) is also a strong contender for a stock that can hold against a recessionary storm, as its products are unlikely to see their demand drop during an economic downturn. By the end of this year’s June quarter, 65 out of the 895 hedge funds polled by Insider Monkey had invested in the company.

CVS Health Corporation (NYSE:CVS)’s largest investor in our database is Cliff Asness’ AQR Capital Management which owns 3.3 million shares that are worth $312 million.

Vitava Funds mentioned the company in its Q3 2022 investor letter. Here is what the fund said:

We took advantage of this in the summer of 2020 and brought the stock into our portfolio at a time when its price was pressed down still further by the coronavirus pandemic. CVS is a giant. It has revenues of USD 300 billion, making it one of the largest companies in the world. It is a relatively stable and highly profitable company with strong free cash flow. Over the past few years, CVS has focused primarily on reducing debt.

This is already much lower than it had been after the Aetna acquisition, and most of the cash is now likely to go to shareholders through share buybacks or be used for smaller acquisitions to grow the company further. CVS trades at about 11 times annual earnings, which is a very appealing valuation given the expected future growth in profitability and overall modest cyclicality in its business.”