We recently published a list of 12 Most Undervalued Large Cap Stocks to Buy Now. In this article, we are going to take a look at where ConocoPhillips (NYSE:COP) stands against other most undervalued large cap stocks to buy now.

On March 4, David Katz, Chief Investment Officer at Matrix Asset Advisors, joined ‘The Exchange’ on CNBC to share his perspective on the current state of the bull market and what February’s mixed action and sector rotation might signal for the rest of the year. Katz acknowledged that while people might not want to hear it, the volatility seen in February is likely to persist throughout the year, with both upside and downside movements. He emphasized that this creates opportunities for investors but also necessitates caution. Katz highlighted several positive factors supporting the market, which included a strong economy and solid corporate performance. However, he expressed concerns about certain policies from the administration, such as tariffs, immigration, and the relationship with the Fed. While these issues have been largely ignored by the market so far, Katz warned that they could eventually lead to a 3-5% correction. Despite this, he remained optimistic about the economy’s ability to navigate these challenges and recommended buying into market dips rather than chasing rallies.

To support his sentiment, Katz pointed to companies that have already experienced significant corrections and are positioned to perform well regardless of broader market movements. He highlighted their strong fundamentals, attractive valuations (most trading at under 13-14 times earnings), and good outlooks. He also noted that last year’s market leaders have slowed significantly, while sectors that underperformed are beginning to show meaningful improvement, a trend he expects to continue. This sector rotation suggests that investors should be prepared to adapt their strategies as different sectors gain momentum throughout the year.

Methodology

We used the Finviz stock screener to compile a list of the top stocks trading between $10 billion and $200 billion. We then selected stocks with a forward P/E ratio under 15 and made a list of 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 900 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).

An underground network of pipelines transporting oil through an expansive terrain.

ConocoPhillips (NYSE:COP)

Forward Price-to-Earnings Ratio as of March 4: 11.16

Number of Hedge Fund Holders: 86

ConocoPhillips (NYSE:COP) is a global energy company that is engaged in the exploration, production, transportation, and marketing of crude oil, natural gas, LNG, and natural gas liquids. Operating across six segments, its portfolio spans unconventional and conventional assets in North America, Europe, Asia, and Australia, along with global LNG developments and oil sands assets in Canada.

The company’s Lower 48 operations are a major source of its production growth. This refers to the oil and gas exploration and production activities within the contiguous 48 states of the US, excluding Alaska and Hawaii. In 2024, it increased production in this region by 5%, which contributed to a total company growth of 4%. The company plans to continue this growth in 2025. In Q4 2024, the Lower 48 produced 1,308,000 barrels of oil equivalent per day, with the Permian basin contributing 833,000, Eagle Ford 296,000, and Bobcat 151,000 barrels.

To improve efficiency, ConocoPhillips (NYSE:COP) plans to reduce capital spending in the Lower 48 by $1.4 billion in 2025. This will be led by cost savings from its acquisition of Marathon and improvements in drilling and completion. The company expects to save over $1 billion from this acquisition by the end of 2025, with over half of those savings already factored into the 2025 budget.

Overall, COP ranks 2nd on our list of most undervalued large cap stocks to buy now. While we acknowledge the growth potential of COP as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than COP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.