Is State Street Corp. (NYSE:STT) the Most Undervalued Quality Stock to Buy Now?
We recently published a list of the 11 Most Undervalued Quality Stocks to Buy Now. In this article, we are going to take a look at where State Street Corp. (NYSE:STT) stands against other undervalued quality stocks to buy now.
On February 24, Kayne Anderson Rudnick chief market strategist Julie Biel joined 'The Exchange' on CNBC to discuss her thoughts on how good quality companies can ride out turbulence in the market. Just like Warren Buffett and Charlie Munger, Biel also suggests inaction as an investment principle and believes that holding high-quality companies can help investors deal with market volatility. She emphasized conviction in investing instead of impulsive decision-making. Biel also noted the general resilience of the US economy, which mainly comes from a robust jobs market as it fuels the consumer-driven economy. She also expressed unease over the limited tools available to address a potential recession that could come from high levels of deficit spending. She thinks inefficient businesses should be allowed to fail while protecting employees during economic cycles.
Biel addressed small-cap stocks and explained that they struggle due to their higher leverage and sensitivity to prolonged higher interest rates. They often include significant exposure to real estate and banking sectors and have a high proportion of non-earning companies. She then emphasized that even if one were to invest in small caps, the ideal approach would be to look at high-quality small-cap companies that can yield strong results. Biel's stock picks are quality companies that focus on tangible and physical solutions instead of those with foundations in hyped technologies like AI. While she acknowledged AI's potential, she argued that it's becoming standard and can no longer be categorized as a differentiator.
We sifted through the Vanguard U.S. Quality Factor ETF holdings to compile a list of the top stocks that had a forward P/E ratio under 15 as of April 14. We then selected the 11 undervalued 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.
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 executive in a suit and tie at a meeting discussing asset management strategies.
Forward P/E Ratio as of April 14: 8.22
Number of Hedge Fund Holders: 61
State Street Corp. (NYSE:STT) provides financial products and services to institutional investors worldwide. It offers investment servicing products and services, such as custody, accounting & fund administration services, recordkeeping, client reporting, investor services operations outsourcing, financial data management, and other similar services and products.
The company's Net Interest Income (NII) is a primary driver of its overall growth. The company expects deposit levels to remain between $230 and $240 billion as it enters the first quarter of 2025. While noninterest-bearing deposits rose slightly in Q4 2024, it's down 12% when compared to the year-ago period. Loan growth also significantly fuels NII and reached 14% in 2024. This growth relies on lending to private market clients, which make up over two-thirds of the company's total loans.
State Street Corp. (NYSE:STT) is now focused on growing its fee-based business. Its servicing fee sales have risen by 45% since 2022, and 250% since 2020, which came from restructuring the sales team and realigning incentives. The company expects to continue to reach its 2025 target of $350 to $400 million in servicing fee sales.
Overall, STT ranks 7th on our list of the most undervalued quality stocks to buy now. While we acknowledge the growth potential of STT, 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 STT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
43 minutes ago
- Yahoo
Why BioNTech Stock Soared Today
BioNTech and Bristol Myers Squibb are teaming up to develop a new cancer drug, BNT327. BioNTech has moved the drug into phase 3 trials, and now Bristol will help to fund further trials. Cash payments to BioNTech could exceed $11 billion over time. 10 stocks we like better than BioNTech Se › BioNTech (NASDAQ: BNTX), one of the companies made famous for its role developing vaccines with Pfizer (NYSE: PFE) during the COVID-19 pandemic, soared 20.2% through 12:50 p.m. Monday on news entirely unrelated to COVID. The German biotech announced this morning it is partnering with pharmaceuticals giant Bristol Myers Squibb (NYSE: BMY) to "co-develop and co-commercialize" BioNTech's drug candidate BNT327 as an immunotherapy against multiple kinds of cancer. BioNTech and Bristol will evenly split the costs of developing and commercializing BNT327, and will "work jointly to broaden and accelerate the development of this clinical candidate." The drug is already involved in "multiple" ongoing clinical trials, including an advanced phase 3 trial testing its usefulness in treating breast cancer and both small cell and non-small cell lung cancer. BioNTech CEO Dr. Uğur Şahin expressed the belief that "BNT327 has the potential to become a foundational immuno-oncology backbone, moving beyond single-mechanism checkpoint inhibitors and expanding into multiple solid-tumor indications." Bristol CEO Christopher Boerner agreed that BNT327 has "significant potential for transforming the standard of care for patients with solid tumors." There are more immediate benefits for BioNTech stock, beginning with Bristol Myers Squibb paying BioNTech $1.5 billion up front for the rights to team up and a further $2 billion in noncontingent payments through 2028 as drug development continues. Additional developmental, regulatory, and commercial milestones, which are contingent on successful development, could add a further $7.6 billion to BioNTech's balance sheet over time. With its lucrative COVID days behind it, BioNTech reported nearly $690 million in losses last year and turned free-cash-flow negative. A tidal wave of cash from Bristol Myers Squibb could really come in handy right about now. Before you buy stock in BioNTech Se, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and BioNTech Se wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor's total average return is 979% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bristol Myers Squibb and Pfizer. The Motley Fool recommends BioNTech Se. The Motley Fool has a disclosure policy. Why BioNTech Stock Soared Today was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
an hour ago
- Yahoo
Why IonQ Stock Soared 47% in May
IonQ shares soared last month as the CEO compared it to Nvidia. The company also got a boost from its first-quarter earnings report and its acquisition of Lightsynq. Trading at a lofty price-to-sales ratio of over 100, the stock could easily fall from here. 10 stocks we like better than IonQ › Shares of IonQ (NYSE: IONQ), a developer of quantum computers and related platforms, were soaring last month, primarily in response to favorable coverage in Barron's, and an article that said it was aiming to be "the Nvidia of quantum computing." Additionally, the company reported first-quarter earnings that were generally in line with estimates and benefited from a broader risk-on sentiment in the market as worries about a trade war and a weakening economy faded. According to data from S&P Global Market Intelligence, the stock finished the month up 47%. As you can see from the chart, shares surged on the Barron's report on May 22, but then gave up some of those gains the following week as bullishness in the stock seemed to fade following an Nvidia's earnings report that did not highlight quantum computing. Quantum stocks generally rallied last month, as some investors bet that it could be the next big technology after artificial intelligence (AI), but IonQ, which is the most valuable of the group of quantum stocks, got a particular boost on May 22 thanks to the coverage in Barron's, as IonQ soared 37% that day. In an interview with Barron's, CEO Niccolo de Masi said, "We're in the business of quantum just like Nvidia and Broadcom are in the business of classical GPUs," adding, "I believe IonQ will be the Nvidia player. There will be other people that copy us and follow us; they have always copied and followed us." It was a bold statement coming from a company that earlier in May reported just $7.6 million in revenue in its first quarter, or less than 0.1% of what Nvidia and Broadcom reported. IonQ also continues to lose money as it invests in its technology. In the first quarter, the company reported a generally accepted accounting principles (GAAP) net loss of $32.3 million, and an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $35.8 million. Last month, the company also signed a memorandum of understanding (MOU) with Korea Institute of Science and Technology (KISTI), a technology research institute and supercomputing center. According to the MOU, the two companies will work together to collaborate in multiple areas to advance quantum computing. IonQ is now targeting revenue of $75 million-$95 million for the full year following its acquisition of Lightsynq, though justifying a market cap of $10 billion at that level of revenue seems difficult, especially when the company reported flat growth in the first quarter. Investors bullish on quantum computing might consider taking a small position in the stock, but it could easily plunge, considering it's been bid up on mostly hype. Before you buy stock in IonQ, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and IonQ wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor's total average return is 979% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Jeremy Bowman has positions in Broadcom and Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy. Why IonQ Stock Soared 47% in May was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
2 hours ago
- Yahoo
The BYU grad at the heart of Trump's trade war
The Trump administration may have left its toughest task this week to U.S. Trade Representative Jamieson Greer, a 44-year-old alumnus of Brigham Young University from Paradise, California. Greer, who learned to speak fluent French during a mission for The Church of Jesus Christ of Latter-day Saints to Brussels, Belgium, will be representing the United States at the annual meeting of the Organization for Economic Cooperation and Development in Paris, France, on Wednesday. There, Greer will attempt to advance tariff negotiations with trade ministers from top economies like Britain, France, Germany, Australia, Japan and South Korea. He is also scheduled to meet with officials from India, Malaysia, Vietnam and the European Union. 'I speak to (the president) on nearly a daily basis,' Greer told CNBC on Friday. 'When it comes to the pure economics, we have problems with all kinds of countries, friend or foe, and we are trying to resolve those.' But hanging over Greer's diplomatic efforts is a shifting policy environment complicating his mandate to translate President Donald Trump's vision of a remade international order that benefits American manufacturing into concrete trade deals with foreign allies and adversaries. Last week, a U.S. trade court ruled unanimously that Trump lacked the authority from Congress to impose blanket tariffs on imports from around the world. On Thursday, a federal court granted the administration's request to keep the tariffs in place while they appeal the ruling. On Friday, Trump accused China of breaking a trade war truce, with Greer alleging on CNBC that Chinese counterparts had been 'slow-rolling' their reversal of export bans on rare-earth materials, a claim Chinese officials rejected on Monday in a statement. Also on Friday, Trump announced an increase in steel tariffs from 25% to 50%, set to take effect on Wednesday, drawing rebukes from trade partners, including EU officials who said the move 'undermines ongoing efforts to reach a negotiated solution.' Despite his difficult position, however, Greer's former mentors, law partners and associates say there are few people more prepared than Greer to balance the demands of a Trump White House with the realities of foreign relations and the needs of American workers. Former U.S. Trade Representative Robert Lighthizer remembers exactly why he recruited Greer — then a JAG attorney in the Air Force — to work at his practice representing American producers harmed by unfair trade. And it had nothing to do with Greer's policy expertise. 'He didn't know international trade at all when I hired him,' Lighthizer said in an interview with the Deseret News. 'But he was a person of character and a patriot, so that's a pretty good foundation to start the analysis.' Greer's working-class background paired with his experience abroad made him open to Lighthizer's worldview as the chief intellectual proponent of Trump-style tariffs to reduce trade deficits and boost made-in-America-products, according to Lighthizer. Raised in a mobile home, with parents taking multiple jobs to make ends meet, Greer understood 'the struggles that Americans face when they are cut out of economic growth' because they aren't on a 'level playing field' with other countries, as Greer said during congressional testimony in February. Representing only domestic companies, Lighthizer led a team of lawyers at the Washington, D.C., office of Skadden, Arps, Slate, Meagher & Flom, who he said were guided by the philosophy that protecting stable, well-paying manufacturing jobs would, in turn, 'help maintain families, which help maintain communities, which is the reason the country is strong.' Under the tutelage of Lighthizer, who had served as the deputy U.S. trade representative for President Ronald Reagan, Greer and others were 'taught' this brand of trade law from the basics, according to Stephen Vaughn, who worked with Greer both at Skadden and at his current firm King & Spalding. Instead of approaching international trade from the perspective of spreadsheets and formulas, their representation of actual American factories gave Greer a firsthand look at how some free trade agreements had let foreign countries take advantage of U.S. companies, Vaughn said. 'So today, when he goes in and sits down with these other countries, he has an enormous experience in terms of not just what it looks like in an economics textbook, but what it looks like in the real world,' Vaughn said. When Lighthizer was tapped as Trump's first trade representative in 2017, Skadden became a pipeline to the White House, with Greer and Vaughn taking charge of the Office of the United States Trade Representative while Lighthizer awaited congressional approval. For the next few years, Vaughn served as Lighthizer's general counsel and Greer worked as his chief of staff, where, according to Vaughn, Greer made a name for himself as an effective advocate for Lighthizer and the president's views on international trade. 'He's brilliant — he's one of the most talented people I've ever dealt with,' Vaughn told the Deseret News. 'But he's a very grounded person.' During Trump's first term, Greer developed the skills he would need to later fill Lighthizer's shoes, helping to craft trade agreements with Mexico, Canada, South Korea and Japan, while implementing a package of tariffs on Chinese imports, according to Steve Orava, who worked with Greer as chair of King & Spalding's international trade practice based in Brussels. 'It's taking what the president wants to do, which is often very general, and coming up with the legal pathways,' Orava told the Deseret News. 'And sometimes that takes creativity, it takes coalition building, it takes communication with others in order to make that happen.' But as Lighthizer's chief of staff Greer also developed the all-important relationship with Trump that would allow the president to entrust him with trade policy negotiations during his second administration. In one notable interaction, Greer flew with Trump on Air Force One to visit Greer's hometown of Paradise in 2018 where the deadliest wildfire in California history had taken the lives of 85 individuals and destroyed more than 18,000 structures, including the home of Greer's parents, who Greer had arranged to meet with Trump on the airport tarmac. As Trump's trade representative in 2025, Greer has been a loyal defender of the president's norm-breaking agenda, with his historic 'Liberation Day' declaration of global 10% tariffs, threats of steeper levies on countries with large trade imbalances and a series of sector-specific duties on steel, aluminum and auto parts. Despite dramatic impacts on the stock market, and predictions of increased costs for companies and prices for consumers, Greer has said Trump's policies are 'already bearing fruit,' are unlikely to cause inflation and are 'common sense' reforms to address the loss of millions of manufacturing jobs and industrial base capacity. In this belief, there is no daylight between Greer and the populist right's role model of economic policy, Lighthizer, according to Mark DiPlacido, a policy adviser at the conservative think tank American Compass, who briefly served under Greer as the deputy assistant trade representative for public affairs. 'Lighthizer, he more than anyone else, has probably been the most influential on the trade policy side of the 'new right' for a lot of government and policy professionals,' DiPlacido said. 'And Jamieson seems to be taking a similar approach.' It's a 'very complicated job' that Greer has before him, Lighthizer said, navigating fluctuating signals from the White House, maintaining relationships with offended international partners and collaborating closely with a dysfunctional Congress. Lighthizer expects Greer to be 'one of the stars' of the second Trump administration because he 'knows in his heart what the objective is,' which is to create 'an economic system that emphasizes American production and the American worker that leads to the overall strength of America.' Jonathan Freedman, the CEO of World Trade Center Utah, said he hopes the administration's priorities will be able to expand manufacturing options in the state, which has led the nation in manufacturing job growth since 2019. It is always an advantage to have someone with a relationship to Utah in a cabinet-level position, according to Freedman. And Greer has made his office open to feedback, reaching out to businesses across the country with open comment periods to share how they have been impacted by tariffs. Ultimately, any shift in international trade policy significantly impacts Utah business operations, Freedman said. Especially for those companies that rely on components and raw materials only found out of the country. 'The USTR has a tough job; he's in the middle of high pressure, complex negotiations with foreign countries, and the result of those negotiations have significant impact on Utah businesses,' Freedman said. 'I'm not sure that prior U.S. trade representatives have been involved with as ambitious of trade negotiations, and I think that Ambassador Greer is doing his best to thread the needle.'
