14 Quality Stocks currently undervalued

Compared to my fair value estimate

As we saw in our last article, the stock markets are high. However, some stocks remain undervalued. In this article, I present these stocks, my fair value estimate. If I can, I give you the reasons why, in my opinion, the stock price is low at the moment.

The fair value estimate is my own. I use an average of 3 methods: a “fair PE” valuation, a DCF valuation and analyst consensus. This method is not intended to be totally accurate, but is designed to provide a reference price to aid decision-making.

1. Alphabet (US)

Current price: $140.23

Fair value estimate: $179 (+28%)

Alphabet is cheap because of concerns about the origin of its revenues (advertising) and the fact the company is behind Microsoft in terms of AI. For me, this problems are only temporary and don’t erase the fact that the stock is a huge FCF machine.

2. GTT (France)

Current price: 120.50€

Fair value estimate: 144€ (+19%)

GTT has a virtual monopoly on LNG shipbuilding. The order book is full, but the question is whether they will be able to maintain this high level of orders for the next decade?

3. Paycom (US)

Current price: $207.56

Fair value estimate: $226 (+9%)

Paycom is experiencing the difficulties of a 30% annual growth stock turning into a 15% to 20% annual growth stock. They also explained that their new product cannibalizes their other products. But it is maybe an opportunity as it can probably take market share from their competitors.

4. Unitedhealth (US)

Current price: $524.90

Fair value estimate: $608 (+15%)

After a blank year, the stock could take its revenge, as its qualities have remained unchanged.

5. Evolution (Sweden)

Current price: 1200.60SEK

Fair value estimate: 1653SEK (+37%)

The Swedish leader in online casinos suffers from being in a sector unloved by investors. This in no way detracts from its intrinsic qualities, as most of the risks are probably already priced into the share price.