We recently compiled a list of the 10 Oversold Large Cap Stocks To Buy Now. In this article, we are going to take a look at where Aptiv PLC (NYSE:APTV) stands against the other oversold large cap stocks.

The Fed recently reduced the funds rate by 50 basis points, a decision seen as daring by some analysts, though it has been largely embraced by the market and many experts. The market seems to be on an upward trajectory since the day of rate cuts as the S&P gained over 4.3% on October 14 and closed at another all-time high.

While there are some concerns, experts are quite optimistic that they won’t be of much significance as we discussed in our article about best-performing long-term stocks in 2024. Here is an excerpt from the article:

The Path Forward for Equities and AI

Noah Blackstein, Senior Portfolio Manager at Dynamic Funds recently joined CNBC's ‘Squawk Box’ and showed optimism around the equity markets. He suggested that current highs may continue. He expects the Fed will implement two more rate cuts this year, which would help sustain market momentum. Despite some geopolitical uncertainties and election concerns, the broader expectation in the market since July, along with favorable banking and credit indicators, supports his positive outlook.

Blackstein believes the labor market's strength may be overstated and noted that revisions to employment data are likely due to a low participation rate in recent surveys. He also argued that real interest rates are historically high and tight, which further suggests the need for more cuts.

Regarding the economy, Blackstein expects further rate reductions to avoid potential market volatility, especially in light of recent hurricane impacts on employment and retail sales. He highlighted that while real interest rates may seem moderate when compared to the last 20 years, they are still elevated in historical terms.

As the Fed steers the economy away from a potential recession, Blackstein views the next phase as an opportunity for long-term growth, especially in areas like family housing and AI. He believes AI will drive a productivity revolution and integrate data strategies into several sectors, which will ultimately lead to cost savings and revenue growth for corporations.

Our Methodology

To list 10 oversold large-cap stocks, we used a Finviz screener to extract stocks that have fallen significantly on a YTD basis and have a forward P/E ratio between 5x to 15x. After getting a list of 20 stocks, we narrowed it to the most widely held by institutional investors. Finally, the stocks were ranked in ascending order of their hedge fund sentiment which was taken from Insider Monkey’s Q2 database of 912 hedge funds.

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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

A closeup of a hand holding a car engine component, highlighting the precision of the company's engineering.

Aptiv PLC (NYSE:APTV)

Market Cap: $16.4 billion

FWD PE Ratio: 11.32

YTD Share Price Decline: ~23% 

Number of Hedge Fund Holders: 38

Aptiv PLC (NYSE:APTV) is an auto components company that provides solutions for electrified, software-driven vehicles. It designs and manufactures essential vehicle components, specializing in electrical, electronic, and safety technologies.

It operates in two key segments: Signal and Power Solutions, which focuses on vehicle electrical architecture, and Advanced Safety and User Experience, which develops technologies for safety and autonomous driving. The company has nearly 140 manufacturing facilities and 11 technical centers worldwide, serving major automotive OEMs in over 50 countries.

Aptiv (NYSE:APTV) is actively investing in electrification, autonomous driving, and vehicle connectivity to stay competitive. Recently, Aptiv expanded its facility in Orgadam, Chennai, investing over $45 million to produce advanced cockpit controllers, radars, and electronic control units for both Indian and global markets, reinforcing its commitment to India’s automotive industry.

The analyst sentiment toward the company is quite positive as it has been covered by 24 analysts with an average price target of $89.50, representing an upside of nearly 28.5% on October 17. On September 20, The Fly reported that Wells Fargo upgraded Aptiv’s (NYSE:APTV) stock rating from Equal Weight to Overweight and raised its price target from $78 to $87.

The firm believes that after a period of slowed growth, the stock is now more attractively valued, making it a good investment opportunity. Wells Fargo highlighted its strong potential for increasing its gross margins and its improved valuation as key factors for the upgrade. Despite a reduction in growth pace, the firm expects the company to continue experiencing above-average growth compared to its competitors.

Overall APTV ranks 7th on our list of the oversold large cap stocks to buy. While we acknowledge the potential of APTV as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than APTV but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

Read Next: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.

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