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As the United States stock market continues its upward momentum, with the S&P 500 extending its winning streak and major indices near record highs, investors are keenly observing opportunities to identify stocks that may be priced below their intrinsic value. In this environment of optimism and growth, understanding the fundamentals that make a stock potentially undervalued becomes crucial for those looking to capitalize on discrepancies between market price and intrinsic worth.
Top 10 Undervalued Stocks Based On Cash Flows In The United States
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| UMB Financial (NasdaqGS:UMBF) | $123.13 | $244.43 | 49.6% |
| Oddity Tech (NasdaqGM:ODD) | $43.12 | $85.73 | 49.7% |
| Business First Bancshares (NasdaqGS:BFST) | $27.95 | $55.08 | 49.3% |
| West Bancorporation (NasdaqGS:WTBA) | $24.07 | $46.84 | 48.6% |
| Afya (NasdaqGS:AFYA) | $16.26 | $31.49 | 48.4% |
| Five Star Bancorp (NasdaqGS:FSBC) | $32.58 | $63.90 | 49% |
| Advanced Energy Industries (NasdaqGS:AEIS) | $112.53 | $219.21 | 48.7% |
| WEX (NYSE:WEX) | $181.73 | $345.51 | 47.4% |
| Marcus & Millichap (NYSE:MMI) | $40.58 | $78.67 | 48.4% |
| Vertex Pharmaceuticals (NasdaqGS:VRTX) | $450.37 | $859.69 | 47.6% |
Let's dive into some prime choices out of the screener.
Microchip Technology
Overview: Microchip Technology Incorporated develops, manufactures, and sells smart, connected, and secure embedded control solutions across the Americas, Europe, and Asia with a market cap of approximately $34.97 billion.
Operations: The company's revenue segments consist of $5.39 billion from Semiconductor Products and $103.90 million from Technology Licensing.
Estimated Discount To Fair Value: 40.6%
Microchip Technology's stock is trading at US$66.51, significantly below its estimated fair value of US$111.97, suggesting it may be undervalued based on cash flows. Despite a decline in profit margins from 28.1% to 14.2%, earnings are expected to grow by over 30% annually, outpacing the broader US market growth forecast of 15.4%. However, high debt levels and a dividend not fully covered by earnings present potential risks for investors evaluating its financial health and sustainability.
Inspire Medical Systems
Overview: Inspire Medical Systems, Inc. is a medical technology company that develops and commercializes minimally invasive solutions for obstructive sleep apnea patients in the United States and internationally, with a market cap of approximately $5.54 billion.