We recently published a list of the 12 Best Stocks Under $100 to Buy According to Hedge Funds. In this article, we are going to take a look at where Bank of America Corp. (NYSE:BAC) stands against other stocks under $100 to buy according to hedge funds.
On April 21, Chris Davis of Davis Advisors appeared on ‘The Exchange’ on CNBC to talk about selectivity in today’s market. Davis pointed out that putting companies in groups like the MAG7 covers their underlying businesses, which can have different fundamentals and therefore prospects. For this reason, he acknowledged that he owns certain stocks from MAG7 but not all. Davis also clarified that his overall focus is on value and growth, which leads him to a diverse set of holdings and not just tech, such as financials and healthcare names. He then argued that the market is shifting back toward selectivity and active management. He suggested that active management is positioned for a resurgence because the indexes have become highly concentrated and richly valued.
Davis acknowledged that while he cannot predict the market’s short-term movements, the present environment is ideal for stock pickers who can identify resilient businesses that are trading at reasonable valuations. He sees this as an opportunity for active management to outperform, as investors move away from momentum-driven index investing toward a more selective approach. He noted the growing popularity of actively managed ETFs as evidence that investors are beginning to act on this shift away from index concentration. He also believes that within the MAG7, only a few companies are truly well-positioned. Similarly, within the S&P 500, only 5% to 10% of companies possess the resiliency and durability needed for such volatile times.
Davis laid out what he sees as the major transitions shaping the current investment environment. First, he described the shift from nearly 15 years of free money to a more normal interest rate environment. Second, he pointed to the end of a multi-decade era of globalization, which was replaced by deglobalization, rising nationalism, and geopolitical tensions. Third, he highlighted the impact of AI. He said that these transitions are occurring against a backdrop of market complacency, with high valuations and concentrated growth expectations.
Our Methodology
We first used the Finviz stock screener to compile a list of the top stocks that were trading under $100 as of April 22. We then selected the 12 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 1000 elite money managers.
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).
Is Bank of America Corp. (NYSE:BAC) the Best Stock Under $100 to Buy According to Hedge Funds?
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Bank of America Corp. (NYSE:BAC) provides various financial products and services for individual consumers, small & middle-market businesses, institutional investors, large corporations, and governments. It operates through four segments: Consumer Banking, Global Wealth & Investment Management, Global Banking, and Global Markets.
On April 8, Truist Financial analyst John McDonald CFA maintained a Buy rating on the stock with a $50 price target. This sentiment is supported by the bank’s position as the second-largest bank in the developed world and the third-largest branch network in the US. The bank makes 86% of its revenue from the US and is expected to benefit from the Trump administration.
In Q1 2025, the bank’s Global Markets segment made $1.9 billion in net income, which was an 8% increase year-over-year. Revenue, excluding DVA (Debit Valuation Adjustment), improved by 10% and reached $5.6 billion in sales and trading revenue. This growth was led by Equities, which saw a 17% increase, and FIC (Fixed Income, Currencies, and Commodities), which grew by 5%. Both Equities and FICC benefited from increased client activity during market volatility
Hardman Johnston Global Equity Strategy stated the following regarding Bank of America Corporation (NYSE:BAC) in its Q4 2024 investor letter:
“Bank of America Corporation (NYSE:BAC) is the second largest bank in the developed world and operates the third largest branch network in the US. With 86% of revenues coming from the US, the bank is a clear beneficiary of the lower regulatory environment expected from the incoming administration. The company’s business is highly diversified across retail, commercial, wealth management, and investment banking, with significant scale across all verticals. Management believes there is a big opportunity going forward in growing and monetizing its mass retail client base. Wealth is another huge opportunity, with the Merrill Lynch platform enabling customers to make more transactions and purchase additional products. Lastly, Bank of America has an opportunity to increase efficiency through cost reduction and online banking. Our expectation is for the bank’s ROE to move significantly higher, driving EPS growth and higher multiples.”
Overall, BAC ranks 4th on our list of the best stocks under $100 to buy according to hedge funds. While we acknowledge the growth potential of BAC, our conviction lies in the belief that AI stocks hold great promise for delivering high 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 an AI stock that is more promising than BAC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
