In This Article:
As the U.S. stock market navigates through a period of volatility, with major indices like the Dow Jones and Nasdaq experiencing fluctuations amid tech earnings and economic data releases, investors are keenly observing potential opportunities. In this environment, identifying stocks that are trading below their perceived fair value can be particularly appealing for those looking to capitalize on market inefficiencies.
Top 10 Undervalued Stocks Based On Cash Flows In The United States
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Atlanticus Holdings (NasdaqGS:ATLC) | $37.19 | $72.49 | 48.7% |
| Cadence Bank (NYSE:CADE) | $33.43 | $64.68 | 48.3% |
| WEX (NYSE:WEX) | $172.60 | $343.98 | 49.8% |
| Constellium (NYSE:CSTM) | $11.10 | $21.63 | 48.7% |
| Okta (NasdaqGS:OKTA) | $71.89 | $138.69 | 48.2% |
| Reddit (NYSE:RDDT) | $119.30 | $230.13 | 48.2% |
| AeroVironment (NasdaqGS:AVAV) | $214.96 | $419.99 | 48.8% |
| Bowhead Specialty Holdings (NYSE:BOW) | $29.11 | $56.49 | 48.5% |
| Verra Mobility (NasdaqCM:VRRM) | $25.97 | $50.05 | 48.1% |
| Vertex Pharmaceuticals (NasdaqGS:VRTX) | $475.98 | $917.19 | 48.1% |
Let's take a closer look at a couple of our picks from the screened companies.
CareTrust REIT
Overview: CareTrust REIT, Inc. focuses on acquiring, financing, developing and owning real estate properties leased to third-party tenants in the healthcare sector with a market cap of approximately $6.05 billion.
Operations: The company's revenue primarily comes from investments in healthcare-related real estate assets, totaling $269.08 million.
Estimated Discount To Fair Value: 18.1%
CareTrust REIT is trading at US$32.67, below its estimated fair value of US$39.87, despite strong earnings growth of 138.6% over the past year and forecasted annual profit growth of 37%. The company recently raised US$441.6 million through a follow-on equity offering and acquired a skilled nursing portfolio for US$74.7 million, enhancing its asset base but diluting existing shareholders significantly in the process.
Dayforce
Overview: Dayforce Inc. is a human capital management software company operating in the United States, Canada, and internationally, with a market cap of approximately $11.19 billion.
Operations: The company generates revenue from its Human Capital Management (HCM) segment, amounting to $1.69 billion.
Estimated Discount To Fair Value: 15.4%
Dayforce, trading at US$70.95, is undervalued compared to its fair value of US$83.85, with earnings expected to grow significantly by 44.4% annually over the next three years, outpacing the market's growth rate. Recent Q3 results showed revenue increased to US$440 million from US$377.5 million year-over-year, and a shift to net income of US$2 million from a loss previously reported, indicating improving financial health despite recent index exclusion challenges.