5 Activist Target Stocks with High Cash and Low Valuation

We just published the list of 10 Activist Target Stocks with High Cash. You can see the top 5 stocks below.

Activist investor activity has been high amid the heightened volatility in the equity markets in 2026. Activist hedge funds have targeted companies they believe are undervalued, continue to generate substantial free cash flow, and hold excess cash.

The investors have also pushed for capital allocation changes, operational restructuring, board representation, asset sales, and strategic reviews. They are also pressuring management teams to improve returns on invested capital and return more capital to shareholders.

Elliott Investment Management, Starboard Value, Engine Capital, Irenic Capital, JANA Partners, Oasis Management, and other prominent activist funds have been the most aggressive in trying to unlock value in some of these stocks.

According to Barclays, 179 campaigns were launched globally during the first nine months of the year. As many as 91 activist campaigns targeted U.S. companies. Elliott was the most aggressive, pushing for changes in 16 campaigns worldwide. Explore some of the fund’s top 10 stock picks.

Photo by Tima Miroshnichenko on Pexels

Likewise, technology and consumer companies were the most targeted, accounting for 60% of the activist campaigns. Activist hedge funds argued that companies needed to adopt AI faster, improve productivity, and communicate their AI strategies effectively.

Although campaign activity moderated in Q3, the broader trend remains significant. For investors looking for top activist targets, companies with low valuation multiples, strong free cash flow, and significant gaps between market value and estimated intrinsic value offer some of the best investment opportunities.

Our Methodology

To compile a list of the 10 activist target stocks with high cash and low valuation, we scanned for some of the biggest activist investor campaigns in 2026. From those campaigns, we selected companies with strong cash flow that are attracting activist investors. We also evaluated the stocks’ valuations and detailed the number of hedge funds holding stakes in them. Finally, we listed the stocks in ascending order based on the number of hedge funds holding stakes in them in Q2 2026.

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. Insider Monkey’s quarterly newsletter strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).

5. Why Dynatrace (NYSE:DT)

Activist Investor: Starboard Value

Number of Hedge Fund Holders: 48

Cash and Cash Equivalent: $1.1 Billion

Dynatrace, Inc. (NYSE:DT) has gained more than 30% year-to-date, outperforming the broader market. Despite the strong share-price performance, the software company has attracted activist investor interest, with Starboard Value seeing opportunities to unlock additional shareholder value through its substantial cash generation and capital allocation strategy.

The activist hedge fund is urging the company to return more capital to shareholders and improve operating margins. It insists it has considerable financial flexibility to increase shareholder distributions.

While Dynatrace, Inc. (NYSE:DT) exited June with about $1.1 billion in cash and cash reserves, Starboard Value believes it can return up to $2.5 billion to shareholders over the next three years. Dynatrace has already approved $1 billion in share buybacks. Additionally, it wants the company to focus on margin expansion. Why is the stock rallying?

Adjusted free cash flow in the first quarter of fiscal 2027 increased to $309.18 million, up from $262.16 million in the same quarter last year. The company expects full-year adjusted free cash flow to range between $610 million and $615 million.

Nevertheless, valuation remains a consideration for investors. Dynatrace, Inc. (NYSE:DT) trades at a forward price-to-earnings multiple of 29.14x, above the sector median of 23.26x, suggesting that some of its growth prospects and potential operational improvements may already be reflected in its share price.

4. Voya Financial (NYSE:VOYA)

Activist Investor: Toms Capital Investment Management

Number of Hedge Fund Holders: 50

Cash and Cash Equivalent: $1.09 billion

Voya Financial (NYSE:VOYA) is a potential value-oriented activist investment owing to its capital-return capacity, asset-management business, and potential to improve shareholder returns. In June, the company came under increased pressure from Toms Capital Investment Management.

The activist hedge fund is urging the company to consider strategic options, including a potential sale, to unlock value. According to the hedge fund, the company is at an inflection point, and management cannot be trusted to navigate it. Explore Q2 Financials.

Toms Capital argues that Voya has suffered from a persistent valuation discount despite strong operating fundamentals. It has also criticized management’s handling of its stop-loss insurance business and strategic direction. The hedge fund believes the company is undervalued because it has a substantial retirement services platform, and its asset management business also provides another potential source of value.

Voya Financial (NYSE:VOYA) boasts significant liquidity, with $1.09 billion in cash and cash equivalents as of the end of June. Excess capital generation reached $150 million in the second quarter, as the company also returned $200 million to shareholders through dividends and buybacks. The stock also trades at a discount, with a forward P/E multiple of 8.59x and a price-to-sales multiple of 1.16x compared to the sector median of 11.23x and 1.15x, respectively.

3. Devon Energy Corporation (NYSE: DVN)

Activist Investor: Toms Capital Investment Management

Number of Hedge Fund Holders: 82

Cash and Cash Equivalent: $1.01 Billion

Devon Energy Corporation (NYSE:DVN) stands out as an interesting value-oriented activist investment candidate because of its substantial operating cash flow, shareholder-return potential, and relatively modest valuation.

In June, Toms Capital Investment Management acquired a sizable stake in the company and started pushing for asset sales and a potential sale of the entire business. Kimmeridge Energy Management is another asset management firm that has also urged the company to streamline its portfolio and improve its strategic direction. Is Devon a top dividend stock?

The activist investors are urging Devon Energy Corporation (NYSE:DVN) to consider divesting non-core oil and gas assets to unlock shareholder value. They also want management to focus on higher-return assets, improve capital allocation, and take steps to strengthen shareholder returns.

The activist campaign comes as the company boasts significant cash reserves. It ended the second quarter with cash and cash equivalents of about $1.01 billion and net cash from operating activities of $3.67 billion, providing significant financial flexibility.

Despite gaining approximately 37% and outperforming the broader market, Devon Energy Corporation (NYSE:DVN) shares continue to trade at a discount to industry peers. It trades at a forward price-to-earnings multiple of 9.56x versus the sector median of 12.55x, leaving room for further value creation if management responds to activist demands.

2. Hewlett Packard Enterprise Co (NYSE:HPE)

Activist Investor: Elliott Investment Management

Number of Hedge Fund Holders: 85

Cash and Cash Equivalents: $6.21 Billion

Hewlett Packard Enterprise Co (NYSE:HPE) has attracted significant activist investor interest amid concerns it is trading at a discount. Elliott Investment Management reportedly built a $1.5 billion stake in the company last year. At the same time, Irenic Capital also acquired a position in May, adding to pressure on management to unlock shareholder value.

As part of its campaign, Elliott has called for operational improvements, cost reductions, and portfolio restructuring. The activist investor has already secured a board seat and obtained the right to monitor another director, giving it greater influence over the company’s strategic direction. Take a look at HPE’s healthier outlook.

Meanwhile, Hewlett Packard Enterprise Co (NYSE:HPE)’s cash position has strengthened, supported by robust demand for AI servers. As of July 31, the company held $6.21 billion in cash and cash equivalents, up from $4.6 billion in the same period last year. Operating cash flow reached $2.62 billion during the first nine months of the fiscal year, providing additional financial flexibility. Explore HPE vs. Super Micro on AI servers.

Despite improving cash generation, the stock trades at a forward price-to-earnings multiple of about 12x, a discount to the sector average of 21x.

1. Synopsys, Inc. (NASDAQ:SNPS)

Activist Investor: Elliott Investment Management

Number of Hedge Fund Holders: 85

Cash and Cash Equivalent: $3.6 Billion

Synopsys, Inc. (NASDAQ:SNPS) has emerged as an activist target stock, combining strong cash-generation potential with a relatively attractive forward valuation. Earlier this year, Elliott Investment Management disclosed a multibillion-dollar stake in the company as it sought to push for operational improvements.

Elliott has engaged with management to push for higher profit margins, arguing that Synopsys could generate greater profitability from its software and services businesses. It is also seeking improvements in overall financial performance to better reflect the company’s strategic importance to the semiconductor industry. Explore Synopsys’ $11 B AI roadmap.

The campaign comes as Synopsys, Inc. (NASDAQ:SNPS) boasts of substantial cash-generating potential supported by recurring software revenue. As of July 31, it had $3.6 billion in cash and cash equivalents. Management also projected full-year operating cash flow of $2.8 billion and free cash flow of $2.6 billion. Strong free cash flow allows Elliott to push management to improve capital allocation, reduce debt, and enhance operating efficiency.

Meanwhile, the stock has declined 2.67% year-to-date, reflecting its recent underperformance. It also trades at approximately 25x forward P/E, significantly below its trailing P/E of 82x, suggesting investors are pricing in an earnings recovery and stronger future profitability. Is its growth worth a premium?

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This article is originally published at Insider Monkey.