These 4 Stocks are Too Cheap to Ignore

Four stocks are trading at a real discount right now, and not the kind that's cheap for a reason. These are profitable, growing companies the market has mispriced, and every one of them earns an a top-tier rating from our Zen Ratings system, indicating a high likelihood of market-beating upside potential.

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A couple have already started to move, so the question isn't just whether they're cheap. It's whether it's too late. Here's why the answer looks like no.

Get the 4 severely undervalued stocks here… 

JAZZ — Jazz Pharmaceuticals

Let's start with Jazz Pharmaceuticals (JAZZ), a company that develops and sells medicines in neuroscience and oncology, think treatments for sleep disorders, epilepsy, and certain cancers.

This is a genuinely profitable pharma company, with gross margins up around 88%, and it is trading at a steep discount to what it's worth. A discounted cash flow model pegs fair value up near $640 a share. The stock is trading around $256. That is roughly 60% below fair value, a profitable company, not a lottery ticket. On top of that you've got a PEG ratio of about 0.7. PEG is just the price-to-earnings ratio adjusted for growth, and anything under 1 is considered cheap for the growth you're getting. Jazz is under 1.

Jazz has run hard, shares are up over 130% in the last year. The logical question to ask is if it's up big, hasn't it been missed?

But here's why the move isn't over. The run hasn't closed the gap. Even after doubling, this thing still trades at a massive discount to fair value. When a stock climbs that much and is still this cheap on the underlying math, it usually means the business got a whole lot more valuable while the price was catching up, and there's more catching up to do.

Wall Street is leaning in too. 16 analysts cover the stock, and the group lands on a Strong Buy recommendation. One of the loudest voices is David Amsellem at Piper Sandler, who ranks in the top 4% of all analysts we track for his stock-picking performance, meaning when he makes a call, it pays to listen. His price target implies serious upside from here.

Our own quant system backs all of this up. The Zen Ratings look at 115 different fundamental and technical factors, and they boil down to a single letter grade, A through F. Jazz earns an A, a Strong Buy recommendation, and it sits in the top 2% of every stock we track.

The component grades are exactly what you want on a value pick. Safety comes in at the top 23%. Growth, top 14%. Momentum, top 7%. Financials, top 6%. And the standout, Value, top 1% of the entire market.

The one honest weak spot is Sentiment, which grades a touch below average, the smart-money signals and estimate revisions haven't fully turned yet. But the positives far outweigh that one negative. It's a cheap, profitable business, trading at 60% below fair value, with top-tier analyst conviction and a top 2% overall rating, that is a lot of value hiding in plain sight.

That's the deepest discount on this list. But the next one might be the cheapest by the raw numbers.

SBLK — Star Bulk Carriers

Next up is Star Bulk Carriers (SBLK), and this one is cheap in a way that jumps off the page. Star Bulk is the largest US-listed dry bulk shipping company, they own and operate a huge fleet of vessels that haul dry cargo like iron ore, coal, and grain across the world's oceans.

This stock is trading at a PEG ratio of roughly 0.37. Under 1.5 is cheap for the growth you're getting. Under 1 is very cheap. A number like this, 0.37, is deep into bargain territory.

The growth estimates are also impressive. Looking forward, earnings are expected to grow at a rate of 33% per year, which is twice the industry average.

And you're getting paid to wait, with a dividend yield north of 3.5%, at a pretty sustainable payout ratio of 40%. This is also a seriously profitable operation, for every dollar of sales that comes in, close to a quarter of it ends up as actual profit.

Interestingly enough, Wall Street simply hasn't shown up, there's essentially a single analyst putting out a rating. Now that cuts both ways, but thin coverage on a company this size and this profitable looks like an opportunity, it means the crowd of analysts hasn't crowded in yet. The one analyst on record, from Jefferies, ranks in the top 14% and has it as a Strong Buy recommendation.

The Zen Ratings are where Star Bulk really shines. It earns an A, a Strong Buy recommendation, and it sits in the top 1% of all 4,600-plus stocks we track, in an industry that itself carries an A grade, one of the strongest-scoring corners of the entire market.

On the components: Momentum, top 14%. Growth, top 11%. Financials, top 8%. The AI grade, top 7%, a factor that measures how likely a stock is to outperform based on patterns in the data, not how much artificial intelligence the company uses. And the standout, once again, Value, top 4% of the market.

The honest tradeoff here is that shipping is cyclical. Rates rise and fall with global trade, and the dividend can move around with them, this is not a set-it-and-forget-it utility. But with the fleet printing strong margins, a rock-bottom valuation, and an A rating on top, you're being paid well to accept that cyclicality.

Cheap and cyclical is one flavor. The next pick is cheap and almost nobody is watching it.

TCMD — Tactile Systems Technology

Our third pick is a genuine hidden gem, Tactile Systems Technology (TCMD).

Tactile makes medical devices that treat chronic swelling conditions like lymphedema. Their flagship system is a pneumatic compression device patients use at home. Not a flashy business, but a very good one, and here's a detail that tells you a lot about the quality: this is a nearly debt-free company. When money is tight and rates are high, a small-cap that doesn't owe anybody is playing on easy mode, it can invest, acquire, and ride out a rough patch without sweating a loan payment.

Tactile just reported earnings, and the profit number was excellent, earnings came in more than double what Wall Street expected, and their core business grew double digits.

And yet the stock sold off after the report, a double digit dip. Management trimmed the top end of its growth outlook for the year, from about 12% down to around 11%, and flagged some near-term choppiness in how orders are timed. Not a change to the long-term story, but enough for a jittery market to hit the sell button. When a profitable, growing company gets marked down on a modest guidance tweak, that's worth a closer look, not a guarantee, but the kind of pullback that can hand a patient investor a better entry.

This isn't a stock that's run away from you either. It spiked early in the year, then spent months drifting sideways, and this week's drop has it back toward the lower end of that range. In other words, you're not chasing it. And the valuation leaves real room, with a PEG right around 1.

There's more value underneath, too. On a discounted cash flow basis, fair value comes out up near $81 a share against a stock trading around $29, that's better than 60% below what the cash flows say it's worth.

On the analyst side, coverage is thin, only three analysts follow it. But all three rate it a Strong Buy recommendation, and their targets sit well above where the stock trades today. When the few people doing the work all land on the same answer, that's worth a long look.

And the quant picture is excellent. Tactile earns an A, a Strong Buy recommendation, in the top 1% of every stock we track. The component grades cluster tight and high. Sentiment, Safety, and Financials all come in around the top 13%. Value, top 11%. And the standout, Growth, top 9%.

The one place it grades soft is the AI factor, which lands slightly below average, a reminder that the price-pattern signals aren't screaming yet. But a fresh earnings beat, a deep discount to fair value, and a top 1% overall rating on a company most investors have never heard of, that is exactly the kind of quiet name worth finding early.

Speaking of names the market is still figuring out, the last one has already been discovered. In a big way.

MKSI — MKS Inc

Up almost 200% in the past year. That is not a typo. Here's what it is, and why, even after a move like that, it still belongs on a list of cheap stocks.

The company is MKS Inc (MKSI). They're a worldwide supplier of the sophisticated instruments, components, and process-control systems that go into making semiconductors, a classic picks-and-shovels play on the whole chip and AI buildout. They don't have to pick which chipmaker wins. They supply the tools either way.

Here's the number that matters most: despite that enormous run, MKS still carries a PEG ratio of about 0.95. Under 1. That's GAARP in action, Growth At A Reasonable Price. The market is paying up for the stock, sure, but earnings are growing fast enough that on a growth-adjusted basis you're still getting it at a reasonable number. And it just beat earnings again, and it has topped estimates in most of its recent quarters.

The stock has actually pulled back more than 20% in just the last month. So this isn't buying the very top, it's a proven winner that just went on sale, in an industry with years of demand ahead of it as the world builds out AI computing.

And Wall Street is genuinely pounding the table. 15 analysts cover it, with the consensus landing on a Strong Buy recommendation. The average price target implies an upside of more than 40%. But what's even more interesting is that the most bullish forecast comes from the highest-rated analysts on the panel, people who rank in the top 1%, top 2%, or top 3% on the Street for actual stock picking performance. Some of those analysts see as much as 100% upside in the cards.

The Zen Ratings seal it. MKS earns an A, a Strong Buy recommendation, in the top 2% of all stocks, and here's the part worth pausing on: it is the number 1 rated stock in its entire industry, topping a list of more than 20 names that includes names like Sensata. Number 1.

On the components: Value, top 19%. Sentiment, top 10%. Momentum, top 9%. And the standout, Growth, top 8%. Safety sits just outside the cluster but still above average, up around the top 27%. Put it together and you get a fast-growing, well-supported business that the market has recognized, but at a price the growth still justifies.

A number 1 industry rating, a sub-1 PEG on a stock this far into a winning trend, and top 1% analysts pounding the table, that is a cheap stock that has already proven it can move.

Conclusion

So there are the four. Jazz Pharmaceuticals, trading at 60% below fair value. Star Bulk, a single-digit-PEG shipper paying you to wait. Tactile Systems, the hidden gem coming off a fresh earnings beat. And MKS, the number 1 stock in its industry, on sale after a pullback. Four different flavors of cheap, all carrying an A from our system.

A couple of these have already started running, so if any of them speak to you, it pays to do your homework sooner rather than later. You can pull a free rating on over 4,600 stocks yourself, just by typing in a ticker at WallStreetZen.com. 

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