We recently published a list of 10 Best Very Cheap Stocks to Buy According to Billionaires In this article, we are going to take a look at where Verizon Communications Inc. (NYSE:VZ) stands against other best very cheap stocks to buy according to billionaires.
Coming off 2 years of healthy broader market performance (~26% total return in 2023, ~25% in 2024), the US Bank Wealth Management believes that the S&P 500 valuations kicked off 2025 at elevated levels. In 2025, stocks continue to face a volatile environment, and in mid-March, the S&P 500 index witnessed a correction (a fall of 10% or more). Despite this, the index’s expected P/E ratio remains marginally above the historic 5-year and 10-year average, says the firm. As per Rob Haworth, senior investment strategy director, U.S. Bank Asset Management, it’s critical that, in 2025, earnings growth remains on track.
Corporate Earnings Projections in 2025
US Bank Wealth Management believes that current market projections hint at the 11.5% S&P 500 earnings growth in 2025 versus the prior year. This number is subject to change. However, Terry Sandven, chief equity strategist for U.S. Bank Asset Management, mentioned that when considering the potential impact of tariffs and other issues, it is difficult to expect that 2025 earnings would meet the current projections. Haworth says that the impact of tariffs on company profits is expected to be mixed. Companies that are more dependent on importing goods manufactured overseas can witness more challenges.
In comparison, the smaller companies, which are not as dependent on foreign trade, are expected to be better placed to mitigate the impact of the trade environment. Because they are not selling in the foreign markets and are not relying on foreign goods, smaller companies can have more pricing power, opines Haworth. This can equate to a healthier earnings picture.
JPMorgan believes that uncertainty related to the trade and other factors of the US administration’s policy agenda continue to lead to a wait and see attitude from businesses and households. Given that household and corporate balance sheets remain relatively healthy, this attitude is expected to be consistent with a slowness in the broader US activity rather than a recession. Coming to the technology sector, in most part, the balance sheets are in healthy shape, with valuations based on forward earnings sitting at a decent place, says JP Morgan. As per the investment firm, these valuations still demonstrate anticipations for very strong 20%+ earnings growth from the US technology sector in 2025.
Our Methodology
To list the 10 Best Very Cheap Stocks to Buy According to Billionaires, we used a stock screener and Insider Monkey’s exclusive database of billionaire stock holdings to shortlist the companies that trade at a forward P/E of less than ~20.0x. For the stocks with the same number of billionaire holdings, we have used the number of hedge fund investors as a secondary metric to rank the stocks, as of Q4 2024.
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 Verizon Communications Inc. (VZ) the Best Very Cheap Stock to Buy According to Billionaires?
A close-up of a financial executive looking intently at their laptop screen, with a wall of financial charts in the background.
Verizon Communications Inc. (NYSE:VZ) is engaged in the provision of communications, technology, information, and entertainment products and services. Tigress Financial Partners maintained a “Buy” rating on the company’s stock with a price objective of $55. The firm hinted at the growth in subscribers and the potential of AI to improve services. Verizon Communications Inc. (NYSE:VZ) opines that small businesses can now harness the power of GenAI to supercharge their operations. The newest product, which has been built directly for small businesses, Verizon Business Assistant happens to be a GenAI-powered text messaging solution that has been designed to support small businesses automate customer interactions, and enhance engagement.
Driven by the unprecedented demand for network capacity and computational power, Verizon Business unveiled Verizon AI Connect, which is an integrated suite of solutions and products designed to allow businesses to deploy AI workloads at scale. Elsewhere, Raymond James maintained an “Outperform” rating, acknowledging Verizon Communications Inc. (NYSE:VZ)’s strong Q4 2024 performance and strategic expansion plans. It saw EPS of $1.18 in Q4 2024 as compared to $(0.64) in Q4 2023. Verizon Communications Inc. (NYSE:VZ)’s focus on fiber expansion through organic growth and potential Frontier acquisition places it well to capitalize on the higher demand for high-speed internet services.
Overall, VZ ranks 9th on our list of best very cheap stocks to buy according to billionaires. While we acknowledge the potential of VZ 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. If you are looking for a deeply undervalued AI stock that is more promising than VZ but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
