"Of course, the hard-hit stock and Q3 hedge fund favorite I speak of is none other than Fiserv ( NASDAQ:FISV), a stock that crashed so hard this year that Mad Money host Jim Cramer was reportedly left "astonished." And while the falling knife has hurt dip-buyers so far, including the many smart hedge funds who initiated or added to positions in the third quarter,"
"Of course, there are some major challenges that need to be overcome if the stock is to reverse course. But with Fiserv stock trading at levels not seen in more than eight years, I do see the appeal of getting in here, while expectations have been freshly lowered and the valuation implies a deeply undervalued company that might not need to do a great deal to start powering higher again."
"Undoubtedly, it's not all too common to witness a blue-chip stock shed nearly two-thirds of its value in less than a year's time. And while the pain could certainly mount for the $33.2 billion fintech company, which now trades at a mere 9.45 times trailing price-to-earnings (P/E) or 7.2 times forward P/E, I do think that it's quite tempting to get a shot at a price that's lower than the price many hedge funds placed last quarter."
Hedge funds engaged in significant third-quarter activity, with more selling than buying overall, but several large managers initiated or increased positions in Fiserv following a historic sell-off. Fiserv's shares have declined roughly 75% from peak to trough, prompting astonishment from media figures and heavy losses for dip-buyers. The company trades at a market value near $33.2 billion, with trailing P/E around 9.45 and forward P/E about 7.2, and share prices at levels not seen in over eight years. Valuation and lowered expectations present a potential buying opportunity, though substantial operational and market challenges must be overcome for a durable recovery.
Read at 24/7 Wall St.
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