Massively Undervalued Stocks to Buy Now: We scoured the market to find three underweight stocks. These companies have a lot of potential upside, but they must also overcome obstacles to get there. Nothing in life is guaranteed, but if they execute on the right strategies, they can overcome any potholes in their roadmap.
Overstock.com
Overstock.com Inc (NASDAQ:OSTK) is an online retailer based in Midvale, Utah. It has a 62% upside from this point, even though it has already experienced a massive 2,000-percent growth since its share price low when COVID-19 triggered a market crash.
It grew on the back of its ecommerce infrastructure, which gave it an advantage in a socially distant age. The company’s share price reached a peak of $128.50 in late August 2020 and has since struggled to sustain a price north of $100 per share. And its founder is seemingly on a mission to torch everything about his reputation and continuously gets the brand bad press.
However, it has a new CEO, long-time Overstock veteran Jonathan Johnson, who is refocusing the company’s efforts. He pulled away from the hardcore blockchain focus and instead is strengthening Overstock’s retail distribution and supply chain.
Long before its founder steered the company toward his blockchain-fueled vision, the company was a great online home good store. It returned to these roots and is back to selling home furnishings and furniture.
Sales revenue has increased to over $1 billion for the fiscal year 2020, and the company turned in its first annual operating profit since 2016. It’s still unclear whether it can sustain eps in the green (which explains why it’s stock is so volatile), but analysts believe it has lots of upside based on cash flow projections.
Stamps.com
Stamps.com Inc. (NASDAQ:STMP) is an internet-based mailing and shipping company based in Santa Monica, California. Like Overstock, Stamps.com has eye-popping upside potential. STMP intrinsic value suggests a 72% upside opportunity.
The company should continue to benefit as more entrepreneurs leverage the internet to build their businesses. Government assistance is quickly running dry, and with a large group of the population still unemployed, entrepreneurship is bound to grow.
Every successful Etsy, Amazon, or eBay seller with a scalable business is using services like Stamps.com for shipping services. It’s these small business-serving tools that will ultimately fuel the global economy’s recovery, and American entrepreneurs have historically been counted on to drive new innovation and a growing GDP.
Forward-looking earnings projections are a bit choppy but generally trending higher. The likelihood is that value investors will identify STMP share price as sitting substantially below fair market value when analysts run their latest cash flow projections, and that could lead to a boon for current investors.
Digital Turbine
Digital Turbine has an upside of about 66.8% from its $6 billion market capitalization. That puts investors in a great position if they jump on before the end of the calendar year 2021. Its fiscal year 2021 earnings could propel the company’s stock prices up.
The economy is reopening, and people are shifting away from using certain tools. This is causing a free-for-all as come companies rush to service a mobile-connected society. This is where Digital Turbine comes in.
The Austin, Texas-based technology company works at the convergence of media and mobile communications. It’s a full-suite and vertically integrated company that delivers end-to-end solutions for mobile operators, device OEMs, and more.
At the heart of it all is mobile content monetization, which isn’t as easy to unlock as it sounds. A buzzy app like Clubhouse Drop-In Audio is dropping the ball of its Android launch and failed to see any true scalable platform growth over a year after being founded.
Regardless of which app wins, Digital Turbine does. In fact, its success transcends any single carrier, phone manufacturer, or app. It’s servicing the general mobile industry, and that’s the shovel in a gold rush that will help it sustain growth.
In fact, of everything on this list, it’s probably the most sustainably solid of the growth prospects.
Stocks That Are Massively Undervalued: Bottom Line
Overstock, Digital Turbine, and Stamps.com offer significant upside potential for value investors willing to bet on analyst projections for discounted cash flow forecasts. The upside opportunity for each company is north of 50% should value capture be realized.
With that said, beaten down stocks are often priced low for a reason. Sometimes it’s not apparent at first glance that a new threat has emerged or a company is saddled with debt or has serious competition nipping at its heels.
Nevertheless, each of these companies based solely on financials makes a compelling case for further investigation and the potential to reward patient investors who buy when the companies are out of favor. At some point stocks in the news get shelved for those that offer the great potential upside with the lowest risk assessment.
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