Gap’s latest beat flew under the radar, but the setup — margin stability, brand strength, and discounted valuation — makes it one to watch. 

Read on for more names quietly building momentum while staying out of the spotlight.

Don’t Let These Undervalued Stocks Slip Through Your Fingers!

We now send our favorite value picks via text, too, so you’ll get the same actionable news without having to open your inbox.

👉 Click here to get stock picks by text and uncover the best value opportunities!

Financials

Bancolombia (NYSE: CIB) just hit a new 52-week high of $50.60, capping a 13% surge in the past month and a nearly 59% gain since January.

The stock has outperformed both the broader finance sector and the foreign banking group, but the story goes deeper than price action.

The bank has built a streak of four straight earnings beats, most recently posting $1.79 per share versus $1.66 expected.

For the current fiscal year, earnings are projected at $6.79 on $6.87 billion in revenue, with another year of steady growth forecast in 2026 at $7.09 per share.

Valuation adds another layer. The stock trades at just 7.4x forward earnings and 6.9x trailing cash flow, well below industry averages.

Its PEG ratio sits near 1.0, and the dividend yield north of 11% dwarfs the peer group, offering a payout profile that’s hard to ignore.

Peers like Credicorp are also delivering strong results, but Bancolombia’s mix of consistent earnings, discounted multiples, and generous capital returns sets it apart.

The stock is rewriting its value case in real time.

Retail

Gap (NYSE: GAP) shares staged a modest rebound after a mixed second-quarter fiscal 2025 report, rising 0.6% in early trading despite flat revenue and slightly missed adjusted EBITDA.

EPS of $0.57 beat estimates by 4%, showing that the company can still deliver bottom-line surprises even when top-line growth slows.

Same-store sales inched up just 1%, while Old Navy and Gap brand strength helped margins hold steady.

The market seems focused on earnings beats and potential guidance rather than the headline softness, with shares hovering around $22.10—roughly 23% below their 52-week high of $28.89.

Gap trades at attractive multiples relative to its peers, with room to rerate if management navigates tariffs and cost pressures effectively.

Historical trends show post-earnings gains in 68% of the last five years, with a median one-day bump of 7.6%, highlighting the stock’s event-driven potential.

For investors watching the apparel sector momentum, Gap offers a setup where modest growth, strong brand positioning, and consistent earnings beats could quietly support upside if execution steadies.

They’re a private company, but Pacaso just reserved the Nasdaq ticker “$PCSO.”

No surprise the same firms that backed Uber, eBay, and Venmo already invested in Pacaso. What is unique is Pacaso is giving the same opportunity to everyday investors. And 10,000+ people have already joined them.

Created a former Zillow exec who sold his first venture for $120M, Pacaso brings co-ownership to the $1.3T vacation home industry.

They’ve generated $1B+ worth of luxury home transactions across 2,000+ owners. That’s good for more than $110M in gross profit since inception, including 41% YoY growth last year alone.

And you can join them today for just $2.90/share. But don’t wait too long. Invest in Pacaso before the opportunity ends September 18.

Invest While You Still Can

_{Paid advertisement for Pacaso’s Regulation A offering. Read the offering circular at invest.pacaso.com. Reserving a ticker symbol is not a guarantee that the company will go public. Listing on the NASDAQ is subject to approvals.}

Technology

ScanSource Inc. (NASDAQ: SCSC) has been back in the headlines after a volatile stretch that saw shares climb 16% in the past month, even as they remain down 14% on the year. 

Over five years, though, the stock has still delivered a 113% gain, highlighting the contrast between short-term pressure and long-term performance.

Recent weakness was tied to softer quarterly results, with revenue sliding and earnings growth slowing.

Over the past five years, sales have declined by 1.5% annually while EPS grew at just 5.4%, showing a business more reliant on cost control than demand expansion.

Return on invested capital has averaged just over 8%, trailing stronger peers.

Valuation looks reasonable at 10.7x forward earnings, near $39.50 per share. That discount may attract some buyers, especially with profit growth of 23% expected over the next two years.

But mixed results from past growth initiatives leave institutions cautious.

ScanSource has delivered over 100% returns since 2020 while navigating short-term volatility.

The business favors steady margins over aggressive expansion. The next move depends on whether stability can carry the stock through a tougher growth backdrop.

Lululemon Athletica (NASDAQ: LULU): Once the athleisure darling, Lululemon trades near $204 — down 45% YTD but far from its $400 highs.

Consensus targets sit around $322, with some bulls eyeing $500.

Inventory headwinds and softer demand weigh on near-term earnings, yet brand power, product innovation, and global expansion keep the recovery story alive.

Forecasts for 2025 range $196–$247, with longer-term 2030 projections still cautious.

At just 13x forward earnings, LULU sits well below historical levels. For those willing to ride the volatility, it’s a beaten-down leader with durable brand equity and room for upside if execution steadies.

First Busey Corporation (NASDAQ: BUSE): This 157-year-old regional bank leans conservative, but that’s exactly what makes it worth watching.

First Busey’s $19 billion asset base is supported by a debt-to-equity ratio of 0.13 and a steady deposit franchise anchored in Central Illinois. 

The recent CrossFirst Bankshares acquisition helped drive a 67% year-over-year revenue jump, yet the stock remains priced like a slow mover.

Profitability metrics lag peers, and margins have room to improve.

Even so, consistent cash flow, a 4% dividend yield, and disciplined lending give it a solid value case in a crowded regional banking field. 

The current multiple of 21.9x reflects deal-related earnings noise, but normalized returns and conservative balance sheet management should appeal to long-term buyers looking for scale without excess.

1st Source Corporation (NASDAQ: SRCE): This 160-year-old regional bank has been steady rather than flashy, but the fundamentals are leaning in its favor.

EPS has compounded at 13.6% annually over the last five years, well ahead of revenue growth, a clear sign of expanding profitability. 

Net interest margins have climbed 29 basis points in two years, giving the core lending book more earning power.

Yet the stock has gone nowhere, flat at $64.24, while the S&P 500 gained double digits over the same stretch.

At just 1.3× forward P/B, SRCE is trading more like a sleepy regional than a bank with proven earnings momentum.

If margins continue to improve and sentiment shifts, investors stepping in now could catch a rerating.

This is the kind of overlooked setup where steady execution eventually forces the market to pay attention.

That's our coverage for today; thanks for reading! Reply to this email with feedback or any value names you'd like us to dig into.

Best Regards,
—Noah Zelvis
Undervalued Edge