We recently published a list of 10 Cheap Blue Chip Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where Chevron Corporation (NYSE:CVX) stands against other cheap blue chip stocks to buy according to hedge funds.
The broad-based market anxiety increased as the US policy uncertainty rose, says Fidelity. The financial markets were weighed down by tariff hikes, deregulation, and tighter immigration policies. The global business cycle is now less synchronized. As per the investment management firm, the US seemed to show mid- and late-cycle dynamics in Q1 2025. Furthermore, the diversification across fixed income and non-US assets is of utmost importance amid growth risks. While the gold and commodities gained, the US dollar decline fueled the non-US equities, says Fidelity.
Amidst US Policy Uncertainty, Diversification Remains Critical
As per Fidelity, the uncertainty regarding the direction of US policy impacted the financial markets during Q1, with investors digesting the news related to executive actions, such as tariff increases, deregulation announcements, reduced government staffing and programs, and tougher immigration activities. Also, the worries related to the economic effects of the tariff increases on the global economy saw an increase during the days after the quarter closed. Despite elevated growth risks, the global expansion was intact as of the close of Q1. Fidelity opines that diversification in fixed income assets and non-US assets is essential.
As per the investment manager, the S&P 500 Index delivered a return of −4.3% for Q1 2025, partly because of the performance of growth stocks (−10%). On the other hand, gold (+19%) and commodities (+8.9%) saw robust gains amid higher market uncertainty.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
Investors’ Approach Amidst Fluctuating Economic Indicators
According to Fidelity, the consumer inflation remained rangebound at ~3% during Q1, which was well above the 2% target of the US Fed. The firm anticipates sticky inflation around 3% for the next year, with upside risk resulting from tariff increases. As per the firm, the consumer inflation expectations have increased to multi-decade highs, making it simpler for businesses to pass the increased costs. Coming to the labor, it has remained tight so far, despite increased policy uncertainty, government layoffs, and federal funding cuts, says Fidelity. On the supply side, the broader labor force participation has stalled below the pre-pandemic rate due to slowing immigration as well as demographic constraints.
As per Marci McGregor, Head of Portfolio Strategy (Chief Investment Office), Merrill and Bank of America Private Bank, the next few months can be a good time to play defense. The investors can consider defensive, dividend-paying, and value-oriented stocks. For the long term, the investors can position themselves for when the uncertainty around trade decreases. The volatility can provide a chance to buy assets supporting the long-term strategy at attractive prices, says McGregor.
Our Methodology
To list the 10 Cheap Blue Chip Stocks to Buy According to Hedge Funds, we scanned the holdings of the iShares Core S&P 500 ETF and chose companies that trade at a forward P/E of less than ~20.0x. We also mentioned the hedge fund sentiments around each stock, as of Q4 2024. Finally, the stocks were arranged in ascending order of their hedge fund sentiments.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
An aerial view of an oil rig at sea, the sun glinting off its structure.
Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 81
Forward P/E as of April 18: ~14.6x
Chevron Corporation (NYSE:CVX) is engaged in integrated energy and chemicals operations. Analyst Roger Read from Wells Fargo reiterated a “Buy” rating on the company’s stock. The analyst’s rating is being supported by the company’s strategic moves, which include the purchase of Hess shares, demonstrating confidence in future growth. Notably, between January and March 2025, Chevron Corporation (NYSE:CVX) purchased 15,380,000 shares of Hess Corporation common stock, implying ~4.99% of the shares of Hess common stock outstanding as of January 31, 2025. Amidst the macroeconomic uncertainties, including tariff disputes and volatile oil prices, Chevron Corporation (NYSE:CVX)’s stable cash flow and capital allocation strategies offer a robust foundation for continued investment, says Read.
As per Morningstar, Chevron Corporation (NYSE:CVX) is well-placed to deliver increased returns and greater FCF due to its oil-leveraged portfolio’s volume growth and margin expansion, improved operations, and cost reductions. The company has started oil and natural gas production from the Ballymore subsea tieback in the deepwater Gulf of America. Ballymore exhibits another step towards Chevron Corporation (NYSE:CVX)’s goal to produce 300,000 net barrels per day of oil equivalent from the Gulf in 2026. Ballymore brings additional production online without building a new standalone offshore platform. This reduces the development costs and can fuel increased returns for shareholders.
Overall, CVX ranks 6th on our list of cheap blue chip stocks to buy according to hedge funds. While we acknowledge the potential of CVX as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for a deeply undervalued AI stock that is more promising than CVX but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
