In this article, we discuss the top 10 extreme value stocks to buy now. If you want to see more stocks in this selection, check out Top 5 Extreme Value Stocks To Buy Now.
Value investing is an investment strategy that consists of selecting stocks which seem to be trading for less than their intrinsic or book value. In the ever-evolving and often strange world of investing, investors who seek value plays can follow the Roundhill Acquirers Deep Value ETF, which offers retail and institutional investors exposure to largely undervalued stocks, and seeks investment results that closely track the performance of the Acquirers Deep Value Index. The fund has $42 million in assets under management and an expense ratio of 0.80%. The Roundhill Acquirers Deep Value ETF was launched on September 23, 2014.
David Einhorn, the portfolio manager of Greenlight Capital, said in the beginning of October 2022 that value investing might never be mainstream again. He noted that there are very few market participants who are actually well versed in value investing, and most investors have turned to passive and quantitative investing. He said that “nobody knows what anything is worth” and explaining his stance further, Einhorn told Bloomberg:
“So there’s an enormous number of companies that are dramatically mis-valued in ways that we haven’t seen before.”
On the other hand, Aaron Dunn and Brad Galko, Co-Heads of the Value team at Eaton Vance, part of Morgan Stanley Investment Management, stated on June 17 that financial services, healthcare, and industrials may provide lucrative investment opportunities in the current market backdrop. They noted that companies manufacturing medical technology and pharmaceuticals are also attractive value-investing plays.
Some of the best value stocks include JPMorgan Chase & Co. (NYSE:JPM), Walgreens Boots Alliance, Inc. (NASDAQ:WBA), and QUALCOMM Incorporated (NASDAQ:QCOM).
Our Methodology
Our starting point for this article is the 56 holdings of the Roundhill Acquirers Deep Value ETF (DEEP). DEEP invested at least 1% of its assets in each of these stocks. We then obtained the number of hedge funds as well as the total dollar value of hedge fund holdings in each of these stocks using Insider Monkey’s Q3 2022 database of 920 elite hedge funds. After sorting these stocks by hedge fund popularity, we narrowed our list to 10 extreme value stocks.
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Top Extreme Value Stocks To Buy Now
10. The Children’s Place, Inc. (NASDAQ:PLCE)
Number of Hedge Fund Holders: 21
The Children’s Place, Inc. (NASDAQ:PLCE) is a New Jersey-based company that operates as a children’s specialty apparel retailer under the proprietary The Children’s Place, Place, Baby Place, Gymboree, and Sugar & Jade brand names. The company posted a Q3 2022 revenue of $509.12 million, beating Wall Street estimates by $9.67 million.
On November 18, UBS analyst Jay Sole maintained a Neutral rating on The Children’s Place, Inc. (NASDAQ:PLCE) but lowered the firm’s price target on the shares to $41 from $43. The company’s soft Q3 results will potentially send the stock lower, the analyst told investors in a research note.
According to Insider Monkey’s third quarter database, 21 hedge funds were bullish on The Children’s Place, Inc. (NASDAQ:PLCE), with collective stakes worth $54.7 million, compared to 15 funds in the prior quarter worth $58 million. Dmitry Balyasny’s Balyasny Asset Management is the largest stakeholder of the company, with 296,994 shares worth $9 million.
In addition to JPMorgan Chase & Co. (NYSE:JPM), Walgreens Boots Alliance, Inc. (NASDAQ:WBA), and QUALCOMM Incorporated (NASDAQ:QCOM), The Children’s Place, Inc. (NASDAQ:PLCE) is one of the top value stocks to monitor.
9. Camping World Holdings, Inc. (NYSE:CWH)
Number of Hedge Fund Holders: 22
Camping World Holdings, Inc. (NYSE:CWH) was founded in 1966 and is headquartered in Lincolnshire, Illinois. The company retails recreational vehicles, as well as related products and services. On November 21, Camping World Holdings, Inc. (NYSE:CWH) declared a $0.625 per share quarterly dividend, in line with previous. The dividend is payable on December 29, to shareholders of record on December 14. The dividend yield on December 5 came in at 9.02%.
On November 28, Camping World Holdings, Inc. (NYSE:CWH) announced that it will acquire California-based RV Solutions Inc., a family-owned RV dealership group for an undisclosed sum. With this move, Camping World Holdings, Inc. (NYSE:CWH)’s footprint will expand to 18 locations in the Golden State. The acquisition will be finalized in the first quarter of 2023.
Truist analyst Michael Swartz on September 23 maintained a Hold rating on Camping World Holdings, Inc. (NYSE:CWH) and lowered the price target on the shares to $25 from $30 as part of a broader research note on Recreational Vehicles. The analyst noted that the RV space could be in for “tough sledding” until estimates “hopefully” bottom by the first half of 2023.
According to Insider Monkey’s data, 22 hedge funds were long Camping World Holdings, Inc. (NYSE:CWH) at the end of Q3 2022, compared to 17 funds in the prior quarter. David Abrams’ Abrams Capital Management is the leading stakeholder of the company, with 5.10 million shares worth $129.35 million.
8. The Buckle, Inc. (NYSE:BKE)
Number of Hedge Fund Holders: 23
The Buckle, Inc. (NYSE:BKE) is a Nebraska-based company that operates as a retailer of casual apparel, footwear, and accessories for men and women in the United States. On November 18, The Buckle, Inc. (NYSE:BKE) reported a Q3 GAAP EPS of $1.24, beating market estimates by $0.05. The revenue of $332.34 million climbed 4% year-over-year, in-line with market consensus. Online sales increased 8.8% to $55 million for the 13-week period ended October 29, 2022, compared to net sales of $50.5 million for the 13-week period ended October 30, 2021. The Buckle, Inc. (NYSE:BKE) is one of the top extreme value stocks to invest in.
According to Insider Monkey’s data, 23 hedge funds were bullish on The Buckle, Inc. (NYSE:BKE) at the end of the third quarter of 2022, with collective stakes worth $96 million, compared to 23 funds in the prior quarter worth $98.2 million. Jim Simons’ Renaissance Technologies is the leading position holder in the company, with 832,952 shares valued at $26.3 million.
Miller Value Partners made the following comment about The Buckle, Inc. (NYSE:BKE) in its Q3 2022 investor letter:
“The Buckle, Inc. (NYSE:BKE) had a strong quarter, climbing 14.1%2. Buckle reported 2Q23 net sales of $302.0 million, +2.3% Y/Y, slightly below consensus of $304.3 million, and EPS of $1.01, -2.9% Y/Y, ahead of analyst expectations for EPS of $0.89. The company achieved gross margin of 48.1%, in-line with 2Q21 gross margin, as management noted on the earnings call that “markdown inventory continues to be clean.” Comparable store net sales and online sales saw Y/Y growth of 1.6% and 6.5%, respectively. Free cash flow for the quarter was $40.2MM, bringing TTM FCF to $220MM, or a FCF yield of 12.9%.”
7. Winnebago Industries, Inc. (NYSE:WGO)
Number of Hedge Fund Holders: 23
Winnebago Industries, Inc. (NYSE:WGO) was incorporated in 1958 and is based in Forest City, Iowa. The company manufactures and sells recreation vehicles and marine products for use in leisure travel and outdoor recreation activities. The company operates in six segments – Grand Design Towables, Winnebago Towables, Winnebago Motorhomes, Newmar motorhomes, Chris-Craft Marine, and Winnebago Specialty Vehicles. It is one of the premier extreme value stocks to buy now.
Winnebago Industries, Inc. (NYSE:WGO) reported its third quarter results on October 19. The non-GAAP EPS came in at $3.02 and the revenue stood at $1.18 billion, outperforming Wall Street estimates by $0.30 and $70 million, respectively. Adjusted EBITDA was $139.2 million for the quarter, an increase of 7.9% compared to $129 million last year.
On October 24, DA Davidson analyst Brandon Rolle maintained a Neutral rating on Winnebago Industries, Inc. (NYSE:WGO) and lowered the price target on the shares to $54 from $60. The company’s Q4 results were a positive surprise, but the management’s earnings call also reiterated a lot of the channel work that he conducted entering the print that called for softer than expected Open House demand and open inventory buildup at the factory level in Elkhart, the analyst told investors.
According to Insider Monkey’s Q3 data, 23 hedge funds were long Winnebago Industries, Inc. (NYSE:WGO), compared to 20 funds in the prior quarter. Ken Fisher’s Fisher Asset Management held the leading stake in the company, with 1.70 million shares worth nearly $91 million.
6. Mueller Industries, Inc. (NYSE:MLI)
Number of Hedge Fund Holders: 23
Mueller Industries, Inc. (NYSE:MLI) is a Tennessee-based company that manufactures and sells copper, brass, aluminium, and plastic products in the United States, the United Kingdom, Canada, South Korea, the Middle East, China, and Mexico. It operates through three segments – Piping Systems, Industrial Metals, and Climate. On November 4, Mueller Industries, Inc. (NYSE:MLI) declared a $0.25 per share quarterly dividend, in line with previous. The dividend is payable on December 16, to shareholders of record on December 2.
On July 18, Northcoast analyst Ryan Connors initiated coverage of Mueller Industries, Inc. (NYSE:MLI) with a Buy rating and a $125 price target. In the water infrastructure space, the analyst favored names tied to the agriculture, irrigation, and industrial demand channels, where he said the demand outlook “appears more promising” relative to construction and municipal. Mueller Industries, Inc. (NYSE:MLI) is one of the analyst’s top stock picks in the sector.
According to Insider Monkey’s data, Mueller Industries, Inc. (NYSE:MLI) was part of 23 hedge fund portfolios at the end of September 2022, compared to 19 in the prior quarter. Mario Gabelli’s GAMCO Investors is the biggest position holder in the company, with 2.6 million shares worth $155.4 million.
In addition to JPMorgan Chase & Co. (NYSE:JPM), Walgreens Boots Alliance, Inc. (NASDAQ:WBA), and QUALCOMM Incorporated (NASDAQ:QCOM), Mueller Industries, Inc. (NYSE:MLI) is one of the popular value stocks among smart investors.
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Disclosure: None. Top 10 Extreme Value Stocks To Buy Now is originally published on Insider Monkey.