As the U.S. stock market navigates a period of heightened volatility, with major indices recently closing lower amid concerns about inflation and earnings reports, investors are increasingly on the lookout for opportunities that might be trading below their intrinsic value. Identifying undervalued stocks can be particularly appealing in such times, as they may offer potential upside when market conditions stabilize or improve.
|
Name |
Current Price |
Fair Value (Est) |
Discount (Est) |
|
Workiva (WK) |
$86.27 |
$166.75 |
48.3% |
|
VTEX (VTEX) |
$3.60 |
$6.99 |
48.5% |
|
Valley National Bancorp (VLY) |
$11.73 |
$23.10 |
49.2% |
|
Perfect (PERF) |
$1.77 |
$3.42 |
48.2% |
|
Investar Holding (ISTR) |
$26.93 |
$53.60 |
49.8% |
|
Horizon Bancorp (HBNC) |
$17.33 |
$34.22 |
49.4% |
|
Fifth Third Bancorp (FITB) |
$48.57 |
$94.74 |
48.7% |
|
Fidelity National Information Services (FIS) |
$63.98 |
$124.45 |
48.6% |
|
Constellium (CSTM) |
$22.77 |
$45.27 |
49.7% |
|
Aptiv (APTV) |
$82.93 |
$165.49 |
49.9% |
Here we highlight a subset of our preferred stocks from the screener.
Overview: Warner Music Group Corp. is a music entertainment company operating in the United States, the United Kingdom, Germany, and internationally with a market cap of approximately $16.46 billion.
Operations: The company’s revenue is primarily derived from its Recorded Music segment, which generated $5.41 billion, and its Music Publishing segment, contributing $1.31 billion.
Estimated Discount To Fair Value: 13.9%
Warner Music Group is trading at US$31.27, below its estimated fair value of US$36.32, suggesting it may be undervalued based on cash flows. Despite slower revenue growth forecasts compared to the market, earnings are expected to grow significantly over the next three years. Recent strategic alliances in AI music creation could unlock new revenue streams and enhance artist engagement. However, debt coverage by operating cash flow remains a concern, and dividends are not well covered by earnings or free cash flows.
Overview: Constellium SE, along with its subsidiaries, designs, manufactures, and sells rolled and extruded aluminum products for various sectors including aerospace, packaging, automotive, commercial transportation, general industrial, and defense; it has a market cap of approximately $3.03 billion.
Operations: Constellium’s revenue segments consist of Aerospace and Transportation at $1.87 billion, Automotive Structures and Industry at $1.54 billion, and Packaging and Automotive Rolled Products at $4.74 billion.
Estimated Discount To Fair Value: 49.7%
Constellium, trading at US$22.77, is significantly undervalued with a fair value estimate of US$45.27. Its earnings are projected to grow substantially at 25.54% annually, outpacing the broader U.S. market growth rate of 16.1%. However, revenue growth is expected to lag behind the market average and operating cash flow doesn’t fully cover debt obligations. Recent expansions in Germany and strategic agreements for communication services enhance operational efficiency and could support future profitability improvements despite these challenges.
Overview: Griffon Corporation, with a market cap of $3.87 billion, operates through its subsidiaries to provide home and building products as well as consumer and professional products across the United States, Europe, Canada, Australia, and internationally.
Operations: The company’s revenue segments consist of $1.58 billion from home and building products and $935.74 million from consumer and professional products.
Estimated Discount To Fair Value: 37.8%
Griffon, trading at US$83.91, is undervalued with a fair value estimate of US$134.82 and projected earnings growth of 33.81% annually, surpassing the U.S. market’s rate. Despite high debt levels and revenue growth lagging behind market averages, Griffon’s significant share buyback program totaling US$603.1 million enhances shareholder value. Recent quarterly results showed stable sales but a decline in net income year-over-year, while the company maintains regular dividends to investors.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include WMG CSTM and GFF.
This article was originally published by Simply Wall St.
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