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Exploring Undervalued US Stocks With Intrinsic Value Discounts Ranging From 13% To 39.6%

The United States stock market has shown robust growth, rising 1.6% over the last week and achieving a 21% increase over the past year, with earnings expected to grow by 15% annually. In this thriving environment, identifying undervalued stocks that offer significant discounts on their intrinsic value can present attractive opportunities for investors seeking potential gains.

Top 10 Undervalued Stocks Based On Cash Flows In The United States

Name

Current Price

Fair Value (Est)

Discount (Est)

Selective Insurance Group (NasdaqGS:SIGI)

$91.87

$183.64

50%

Associated Banc-Corp (NYSE:ASB)

$20.25

$39.54

48.8%

USCB Financial Holdings (NasdaqGM:USCB)

$12.10

$23.87

49.3%

Hollysys Automation Technologies (NasdaqGS:HOLI)

$21.21

$42.18

49.7%

DiDi Global (OTCPK:DIDI.Y)

$4.45

$8.84

49.6%

HeartCore Enterprises (NasdaqCM:HTCR)

$0.72

$1.41

48.8%

Vasta Platform (NasdaqGS:VSTA)

$3.05

$5.92

48.5%

Open Lending (NasdaqGM:LPRO)

$5.74

$11.32

49.3%

Carter Bankshares (NasdaqGS:CARE)

$12.38

$24.12

48.7%

Astronics (NasdaqGS:ATRO)

$18.22

$36.16

49.6%

Click here to see the full list of 173 stocks from our Undervalued US Stocks Based On Cash Flows screener.

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Let's uncover some gems from our specialized screener

Datadog

Overview: Datadog, Inc. operates a platform for observability and security of cloud applications across North America and internationally, with a market capitalization of approximately $39.42 billion.

Operations: The company generates its revenue primarily from its IT Infrastructure segment, totaling approximately $2.26 billion.

Estimated Discount To Fair Value: 39.6%

Datadog, currently priced at US$117.17, is valued significantly below our calculated fair value of US$194.05, indicating a potential undervaluation of over 20%. Despite recent insider selling and shareholder dilution over the past year, Datadog's financial outlook remains robust with earnings expected to grow by 24.6% annually over the next three years—outpacing the US market average. Additionally, its recent product launch, the Datadog App Builder, enhances its service offering by integrating remediation capabilities directly into monitoring systems, potentially boosting operational efficiency and customer value.

NasdaqGS:DDOG Discounted Cash Flow as at Jun 2024
NasdaqGS:DDOG Discounted Cash Flow as at Jun 2024

Arthur J. Gallagher

Overview: Arthur J. Gallagher & Co. operates globally, offering insurance and reinsurance brokerage, consulting, and third-party claims services in property and casualty; it has a market capitalization of approximately $56.43 billion.

Operations: The company's revenue is primarily generated from its brokerage and risk management segments, which respectively brought in $8.77 billion and $1.31 billion.

Estimated Discount To Fair Value: 13%

Arthur J. Gallagher & Co., trading at US$261.16, appears modestly undervalued with a fair value estimate of US$300.31, reflecting a potential underpricing based on discounted cash flow analysis. The company's robust first-quarter performance, with revenue and net income significantly up from the previous year at US$3.26 billion and US$608.4 million respectively, underscores its financial health. Expected to outperform the market, AJG's earnings are forecasted to grow by 22.42% annually over the next three years, surpassing broader market growth projections substantially.

NYSE:AJG Discounted Cash Flow as at Jun 2024
NYSE:AJG Discounted Cash Flow as at Jun 2024

Sea

Overview: Sea Limited operates in digital entertainment, e-commerce, and digital financial services across Southeast Asia, Latin America, and other regions, with a market capitalization of approximately $42.74 billion.

Operations: The revenue segments for the company include e-commerce at $9.68 billion, digital entertainment at $2.09 billion, and digital financial services at $1.85 billion.

Estimated Discount To Fair Value: 39.6%

Sea Limited, currently priced at US$74.92, is significantly below our fair value estimate of US$124.11, indicating potential undervaluation based on cash flows. Recently becoming profitable and with earnings expected to grow by 41.88% annually over the next three years, SE outpaces the US market's growth forecast substantially. However, recent financials show a shift from net income to a loss of US$23.66 million in Q1 2024, reflecting volatility in its earnings quality due to large one-off items.

NYSE:SE Discounted Cash Flow as at Jun 2024
NYSE:SE Discounted Cash Flow as at Jun 2024

Taking Advantage

  • Dive into all 173 of the Undervalued US Stocks Based On Cash Flows we have identified here.

  • Shareholder in one or more of these companies? Ensure you're never caught off-guard by adding your portfolio in Simply Wall St for timely alerts on significant stock developments.

  • Discover a world of investment opportunities with Simply Wall St's free app and access unparalleled stock analysis across all markets.

Ready For A Different Approach?

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 NasdaqGS:DDOG NYSE:AJG and NYSE:SE.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com