We recently published a list of the 15 Best and Cheap Stocks to Buy According to Billionaires. In this article, we are going to take a look at where The Allstate Corporation (NYSE:ALL) stands against the other cheap stocks held by billionaires.
The S&P 500 index is trading around its all-time high, and the short-term market indicators aren’t much evident with the latest U.S. tariff policy under implementation.
Billionaire investor and CEO of Berkshire Hathaway Warren Buffett sold a record $134 billion worth of stock in 2024. Buffett’s move is considered a benchmark among investors to assess the market. Historically, when Buffett’s firm becomes a net seller, it’s often followed by below-average market performance. Many believe that this could be a signal of stock market underperformance in 2025. Cheap stocks held by billionaire investors can be a great option considering the current uncertainty in the market.
In an interview with CNBC on March 11, chief market strategist at MAI Capital Management, Chris Grisanti, pointed out the significance of recognizing market signals and valuations to understand the investment landscape effectively. Grisanti noted that entry price is crucial in investing, especially as valuation distortions have spiked in recent years with growth stocks massively outperforming value stocks. He highlighted the change in market trends, pointing out that corrections were often driven by tech stocks impacting the market down, resulting in what he viewed as natural and healthy pullbacks.
Chirs said that the decline in the market has occurred due to the underperformance of economically sensitive sectors such as banks, airlines, and consumer discretionary stocks, indicating a potential economic slowdown. On top of that, President Trump’s tariff policy can be a burden on the economy with local businesses suffering from high tariffs.
Tariff Policy Impact
According to British economist John Ross, President Trump’s tariff policies will negatively impact the U.S. economy. “The only issue with the tariffs is which combination of bad effects you will have,” said Ross in a recent interview with Xinhua.
“But the Federal Reserve’s job is to contain inflation. Therefore, if it sees inflationary pressures, the Federal Reserve will raise interest rates, but it will slow down the economy,” Ross added.
Billionaire investor Leon Cooperman in a recent interview during the Squawk Box show on CNBC said that the president is on the right track, but he is doing things in a very destabilizing manner. “The president is focusing on reducing the deficit, which is the right thing to do,” said Cooperman.
A successful independent agent or broker discussing the benefits of life and health insurance with a customer.
Our Methodology
For the best cheap stocks to buy according to billionaires, we analyzed Insider Monkey’s exclusive database of billionaire stock holdings. We selected the 15 best and cheapest stocks to buy with a forward P/E ratio of under 15. The stocks are ranked in ascending order of the highest number of billionaire investors, updated as of Q4 2024. For the stocks with the same number of billionaire investors, we have used the forward P/E ratio as a secondary metric to rank the stocks.
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).
The Allstate Corporation (NYSE:ALL)
Forward P/E Ratio: 12.02
No. of Billionaire Investors: 19
The Allstate Corporation (NYSE:ALL) is a leading insurance provider that offers various property and casualty, health, and protection products. Allstate’s products include auto, home, life, and supplemental insurance. It also provides consumer protection plans, roadside assistance, and analytics solutions. The company’s core business lies around property and casualty insurance in the U.S. and Canada.
In Q4 2024, The Allstate Corporation (NYSE:ALL) posted a significant increase in total revenues, reaching $16.5 billion, up 11.3% from a year ago. The company’s Protection Plans segment experienced notable policy growth in 2024 and now covers 160 million policies, an increase of 60 million since 2019. During Q4, the segment’s revenue reached $528 million, rising by 20.3% year-over-year. Whereas, the segment’s full-year revenue touched $2 billion, representing a 23.9% CAGR since 2019, driven by both domestic and international growth.
On February 28, Paul Newsome from Piper Sandler reiterated an Overweight rating on ALL, maintaining the price target at $248 per share. Newsome expects the company to overcome its ongoing challenges and achieve positive auto policy-in-force (PIF) growth in 2025.
Diamond Hill Large Cap Concentrated Strategy stated the following regarding The Allstate Corporation (NYSE:ALL) in its Q2 2024 investor letter:
“Among our bottom Q2 contributors were Abbott Laboratories, ConocoPhillips, and The Allstate Corporation (NYSE:ALL). Allstate, one of the US’s largest auto and homeowners’ insurance providers has seen the pace of premium price increases decelerate, weighing on investor sentiment around the stock. However, the company’s underlying fundamentals are intact, margin expansion should continue through the year, and the outlook remains constructive.”
Overall ALL ranks 4th on our list of the cheap stocks to buy according to billionaires. While we acknowledge the potential of ALL as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ALL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks To Invest In According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
