What stocks are undervalued right now

Screening Filters

1. Market Cap ≥ $1,000,000,000

   • Purpose: Focus on larger, established U.S. companies.
   • Rationale: When looking for “undervalued” stocks, it’s more reliable to use valuation ratios on companies that are reasonably mature and liquid. Very small/micro-cap stocks can look statistically cheap due to thin trading, volatile earnings, or poor data quality, which makes “undervaluation” harder to trust.

2. Region: United States

   • Purpose: Limit results to U.S.-based companies or those primarily traded as U.S. listings.
   • Rationale: This directly matches your request for “stocks in the US market.” It keeps the universe aligned with U.S. accounting standards, market dynamics, and benchmarks.

3. Exchange: XNYS (NYSE), XNAS (NASDAQ), XASE (AMEX)

   • Purpose: Include only major U.S. exchanges.
   • Rationale: These are the primary U.S. stock exchanges. Restricting to them generally ensures better liquidity, reporting standards, and data quality, which is important when assessing valuation.

4. Net Margin ≥ 5%

   • Purpose: Ensure companies are consistently profitable.
   • Rationale: To call a stock “undervalued,” we typically want it to have solid underlying business performance. A minimum net profit margin of 5% filters out firms that are barely profitable or losing money, where low valuation ratios may reflect justified concerns rather than true undervaluation.

5. Debt-to-Equity ≤ 1

   • Purpose: Focus on companies with moderate or low leverage.
   • Rationale: High debt can make a stock look cheap (low P/E or P/B) but actually be risky (“value traps”). Capping debt/equity at 1 targets businesses whose balance sheets are relatively healthy, increasing the odds that “cheap” really means undervalued, not distressed.

6. P/E (TTM) between 3.0 and 15

   • Purpose: Identify stocks trading at a low multiple of their trailing earnings.
   • Rationale: The P/E ratio is a core valuation metric.
     • Max 15: Below both the historical long-term U.S. market average (often ~16–20) and many current market multiples, which is a common threshold for “value” stocks.
     • Min 3: Excludes extremely low P/Es that can signal one-off anomalies, accounting noise, or very high risk, rather than genuine bargains.

7. Price-to-Book (P/B) between >0 and 2

   • Purpose: Target companies trading relatively close to or below the value of their net assets.
   • Rationale:
     • Max 2: P/B below 2 is a classic quantitative definition of value; it suggests the market isn’t placing a very high premium on the company’s book value.
     • Min >0: Ensures we’re not including invalid or nonsensical values (e.g., negative book value), which would distort the “undervalued” signal.

Why Results Match Your Request

• The search is restricted to U.S. stocks on major U.S. exchanges, matching “US market.”
• Valuation filters (P/E 3–15, P/B ≤ 2) explicitly target companies priced more cheaply than typical market levels on earnings and book value—standard ways to approximate “undervalued.”
• Profitability (net margin ≥ 5%) and balance sheet strength (debt/equity ≤ 1) help avoid weak or distressed firms that might look cheap for good reason, focusing instead on healthier businesses that are more likely to be genuinely undervalued rather than value traps.
• Market cap ≥ $1B reduces noise from tiny, illiquid, or speculative names and concentrates on companies where valuation metrics are more meaningful.

Together, these filters create a focused list of established, profitable, financially sound U.S. companies that the market is currently valuing at relatively low multiples, which is precisely what you’d look for when searching for potentially undervalued U.S. stocks.