In this article, we will take a detailed look at the 18 Most Profitable Value Stocks Now. For a quick overview of such stocks, read our article 5 Most Profitable Value Stocks Now.
Many analysts believe the optimism in the market seen during the last few weeks of 2023 stemming from a perception that the Federal Reserve might have won its battle against inflation was overdone. The latest inflation data poured water on investors’ hopes of quick interest rate cuts. In this backdrop some circles are expecting value stocks to rebound in 2024. Jeremy Siegel, Wharton School professor of finance, said in a program on CNBC that he sees about 15% gain in value stocks in 2024. When asked about value stocks’ underperformance over the past few years, Siegel said value stocks outperformed in 2022 but then the trend reversed. He expects a high interest rate environment will keep a lid on growth stocks in 2024. The professor expects short-term interest rates to come down in 2024 but he does not see a significant decline in long-term interest rates.
Overall, Siegel is quite optimistic about the stock market this year. He believes chances of soft landing are high and his worst-case scenario expectation is a “very mild recession” or zero GDP growth in the second or third quarter of 2024. Even if we see recession this year, the economy would later rebound and post “nice” growth, according to Siegel.
Methodology For this article, we used a stock screener to identify stocks with PE ratios less than 15 and positive revenue growth rates. From the resultant list of stocks we picked 18 companies with the highest net income reported over the past one year. With each stock we have mentioned hedge fund sentiment. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
18. Consol Energy Inc (NYSE:CEIX)
Estimated Net Income (TTM): $691.84M
Consol Energy Inc (NYSE:CEIX) ranks 18th in our list of the most profitable value stocks to invest in now according to smart money investors.
As of the end of the third quarter of 2023, 25 hedge funds tracked by Insider Monkey had stakes in Consol Energy Inc (NYSE:CEIX). The most significant stakeholder of Consol Energy Inc (NYSE:CEIX) during this period was David Einhorn’s Greenlight Capital which owns a $252 million stake in Consol Energy Inc (NYSE:CEIX).
17. Popular Inc (NASDAQ:BPOP)
Estimated Net Income (TTM): $702.48M
Popular Inc (NASDAQ:BPOP) provides retail, mortgage, and commercial banking products and services in Puerto Rico and the US.
As of the end of the third quarter of 2023, 17 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Popular Inc (NASDAQ:BPOP). The most significant stakeholder of Popular Inc (NASDAQ:BPOP) during this period was Bernard Horn’s Polaris Capital Management which owns a $143 million stake in Popular Inc (NASDAQ:BPOP).
16. Blue Owl Capital Inc (NYSE:OWL)
Estimated Net Income (TTM): $796.23M
Alternative investment asset management company Blue Owl Capital Inc (NYSE:OWL) ranks 16th in our list of the most profitable value stocks to buy now.
Insider Monkey’s database of 910 hedge funds shows that 26 hedge funds had stakes in Blue Owl Capital Inc (NYSE:OWL) as of the end of the third quarter of 2023. The most notable hedge fund stakeholder of Blue Owl Capital Inc (NYSE:OWL) was Alexander West’s Blue Pool Capital which owns a $533 million stake in Blue Owl Capital Inc (NYSE:OWL).
15. Western Alliance Bancorporation (NYSE:WAL)
Estimated Net Income (TTM): $854.70M
Western Alliance Bancorporation (NYSE:WAL) shares have gained about 69% over the past six months.
During the third quarter, Western Alliance Bancorporation’s (NYSE:WAL) EPS came in at $2.30, beating estimates by $0.39. Revenue in the quarter jumped 7.9% year over year to $716.2 million, beating estimates by $28.43 million.
As of the end of the third quarter of 2023, 36 hedge funds tracked by Insider Monkey had stakes in Western Alliance Bancorporation (NYSE:WAL).
Miller Value Income Strategy made the following comment about Western Alliance Bancorporation (NYSE:WAL) in its Q3 2023 investor letter:
“Western Alliance Bancorporation (NYSE:WAL) also performed well during the quarter. The regional bank reported 2Q23 EPS of $1.96, -18.0% Y/Y, slightly below consensus of $1.97, and Net Interest Margin (NIM) of 3.42%, -12bps Y/Y, below consensus of 3.50%. Tangible Book Value (TBV) per share stood at $43.09 (P/TBV of ~1.1x) at the end of the quarter, +17.5% Y/Y, while the bank?s Common Equity Tier 1 (CET1) ratio came in at 10.1%, ahead of management?s estimates for 10%+, in-line with…
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