Market Watch: Three Undervalued Stocks Trading at Steep Discounts to Intrinsic Value
As major indices like the Dow and S&P 500 grapple with volatility in the first quarter of 2026, a selective hunt for undervalued equities is gaining traction among investors. While macroeconomic crosscurrents persist, fundamental analysis suggests several names may be priced well below their long-term potential. Using a cash-flow-based valuation screener, we highlight three stocks trading at a notable discount to their estimated fair value.
Viavi Solutions Inc. (VIAV)
The provider of network test and assurance solutions holds a market capitalization of $5.66 billion. Its operations span Network and Service Enablement ($924.8M in revenue) and Optical Security and Performance Products ($318.9M). Currently trading around $24.46, the stock is priced approximately 13.6% below its estimated fair value of $28.31, based on future cash flow models. While the company forecasts a high return on equity and solid profit growth, investors are weighing recent challenges, including a Q2 2026 net loss of $48.1 million, significant insider selling, and operating cash flow that falls short of covering its debt obligations.
Kontoor Brands, Inc. (KTB)
The apparel company behind iconic denim brands Wrangler ($1.86B revenue) and Lee ($745.81M revenue) is valued at $3.32 billion. With shares near $59.73, Kontoor presents the most striking valuation gap in this review—trading at an estimated 40.4% discount to a fair value of $100.27. This disconnect comes despite a robust forecast for annual earnings growth exceeding 20%. Recent results, however, show net income declines and dividend instability. Strategic partnerships with Goody and Cherry aim to drive brand visibility, but concerns linger over whether operating cash flow can adequately support the company's debt amid these expansions.
Robert Half Inc. (RHI)
The global talent solutions and consulting firm, with a market cap of $3.46 billion, derives revenue from Contract Talent Solutions ($3.48B), Protiviti ($1.95B), and Permanent Placement ($439.5M). Trading at $34.61, Robert Half shares are priced about 34.5% below their estimated cash flow value of $52.83. Although recent earnings dipped to $31.76 million from $54.29 million a year prior and its dividend payout appears unsustainable, analysts project annual earnings growth of nearly 24% over the next three years—potentially yielding a return on equity above 22%.
This analysis, based on historical data and analyst forecasts using an unbiased methodology, is not financial advice. It does not constitute a recommendation to buy or sell any security and does not consider individual objectives or financial situations. Our long-term focused analysis is driven by fundamental data and may not incorporate the latest price-sensitive announcements. The author and publisher have no position in the stocks mentioned.
Investor Perspectives
Michael Tan, Portfolio Manager at Cedar Oak Capital: "In a market that's rewarding growth at any price, these cash flow-based valuations are a useful sanity check. Kontoor's deep discount is particularly intriguing if consumer spending holds up."
Sarah Chen, Independent Value Investor: "Robert Half's cyclical sensitivity worries me, but that's often when the best value opportunities emerge. The projected ROE is compelling if they can navigate the economic soft patch."
David R. Miller, Editor of 'The Contrarian Ledger': "This is classic value trap screening. Viavi's insider selling and Kontoor's debt issues are massive red flags the model glosses over. Chasing discounts without quality is a recipe for permanent capital loss."
Anita Rossi, CFA, Senior Analyst at Horizon Advisors: "The methodology highlights the margin of safety principle. However, investors must independently verify the sustainability of those future cash flows, especially in the face of potential recessionary pressures."