Most value setups ask you to wait around indefinitely for the thesis to show up. This one pays you 3.2% and reports tomorrow morning, which you have to admit is a better arrangement.

Steel

Cleveland-Cliffs (NYSE: CLF) returned to profitability in the third quarter, posting $165 million in GAAP net income after a $134 million loss in Q2. Adjusted EBITDA more than doubled sequentially to $612 million, while revenue reached $5.6 billion and adjusted earnings climbed to $0.28 per share.

At roughly $13.67 in early trading, the steelmaker carried an equity value near $7.8 billion and an estimated enterprise value of $15.4 billion including net debt. Against management’s newly projected $4 billion-plus in 2027 adjusted EBITDA, that works out to less than 4 times prospective earnings before interest, taxes, depreciation, and amortization.

The discount rests on more than an optimistic forecast. Average selling prices rose to $1,177 per ton from $1,124 in Q2, shipments reached 4.2 million net tons, and unit costs improved. At that valuation, you would be paying a modest multiple if the contract-driven recovery continues.

New Contracts Strengthen the Outlook

Cliffs expects approximately $715 million in fourth-quarter adjusted EBITDA, despite seasonal slowdowns and maintenance. Recently signed customer contracts and stronger domestic steel pricing underpin its 2027 projection, well above analysts’ roughly $2.5 billion forecast. Management also expects free cash flow and property sales to accelerate debt reduction.

Debt Makes the Forecast Critical

Long-term debt stood at $7.65 billion in September, while year-to-date operating cash flow was only $129 million. Lower steel prices, soft auto demand, or weaker contract realizations could quickly make the projected multiple misleading. Debt reduction and sustained margins should matter more to your valuation than one exceptional quarter.

Media

Pinterest (NYSE: PINS) gained a fresh catalyst Monday as Phillip Securities initiated coverage with a Buy rating and a $30 price target. The analyst highlighted a large gap between the platform's international audience and the advertising revenue it generates, pointing to room for better monetization.

At approximately $22, Pinterest carries a market value of around $12.5 billion and trades near 10 times forward adjusted earnings. Second-quarter revenue climbed 18% to $1.18 billion, while free cash flow increased 37% to $270 million, giving the subdued multiple operating support.

International markets account for roughly 83% of monthly active users but only 25% of 2025 revenue. If you assign even modest revenue-per-user gains to that existing audience, the potential earnings contribution becomes meaningful without relying on another surge in user growth.

Advertising Tools Could Close the Gap

Pinterest finished June with a record 640 million monthly users and adjusted EBITDA of $311 million, up 24% year over year. Its AI-powered Performance+ tools are designed to improve advertising results, while the company repurchased more than $2 billion of shares during the first half.

Better overseas ad yields could compound those improvements.

Competition Could Delay Monetization

Pinterest lost $47 million under GAAP accounting in Q2, and management warned of slower third-quarter revenue growth amid tougher digital advertising competition. International ad spending remains uneven, and a forward multiple depends on expected profits materializing.

Progress in overseas revenue per user, rather than today's analyst target, should determine whether your confidence is justified.

Gaming

Boyd Gaming (NYSE: BYD) drew two Wall Street upgrades Monday, with Morgan Stanley lifting its rating to Overweight and Susquehanna moving to Positive. Both firms set $83 price targets after the stock's summer decline, citing a discounted valuation and prospects for a Las Vegas recovery.

At roughly $70, Boyd trades at a forward enterprise-value-to-EBITDA multiple of about 6, versus its historical average near 8.5.

That represents a 29% discount to its customary multiple, even as Midwest and South casinos, online operations, and managed properties provide support beyond the struggling Las Vegas market.

Second-quarter revenue totaled $1.03 billion, and adjusted EBITDAR reached $350.5 million, with property operating margins near 40%. Growth across Boyd's other operations means you need not depend entirely on a Las Vegas rebound to justify examining the discounted valuation.

Local Operations Could Regain Ground

Susquehanna expects Boyd's Las Vegas Locals portfolio to return to growth during Q4 as construction disruption eases. Midwest and South operations posted higher revenue and adjusted EBITDAR in Q2, while online and managed segments strengthened.

Boyd also returned more than $170 million through dividends and buybacks, leaving $551 million under its repurchase authorization.

Debt and Demand Remain Risks

Adjusted EBITDAR slipped from $357.9 million a year earlier, and weak destination traffic continues to hurt Las Vegas results. Total debt stood at approximately $2.6 billion in June, limiting flexibility if gaming demand deteriorates.

With third-quarter earnings due October 22, a credible local-market recovery, rather than analyst optimism alone, must justify your patience.

Ally Financial (NYSE: ALLY)

Ally lends money to people buying cars, and funds that lending with online savings deposits. It is the old GMAC, now a digital bank, and the market has stayed wary as wholesale used vehicle prices drifted lower and credit stayed front of mind. The stock is down about 5% over the past year and sits below its 50- and 200-day moving averages.

Here is the part that gets lost: retail auto net charge-offs were 157 basis points last quarter, down 18 from a year earlier, and the provision only rose because Ally was building reserves against a growing loan book, which is a very different thing from losses getting worse. 

Its cost of funds also fell 12 basis points while net interest margin excluding original issue discounts rose 11, though the retail auto portfolio yield was roughly flat, so the gain is coming from deposits rather than new loan pricing.

The analysts covering it carry a Buy consensus with an average target roughly 30% above the current price. Results arrive at about 7:30am tomorrow, with the call at 9am.

Valley National Bancorp (NASDAQ: VLY)

Valley National is a regional bank built around commercial real estate lending in New Jersey, New York, and Florida. Commercial property is exactly the loan book nobody wants right now, which is the entire reason you can buy this at about 9 times forward earnings with a dividend near 3.5%.

Be clear-eyed about why: nonaccrual loans rose $30 million last quarter to $462.6 million, including three commercial property loans totalling $49.6 million that carried no allocated reserves, and allowance coverage of nonaccruals slipped to about 128% from 135%. 

That is the bear case stated plainly, and it is also why Thursday’s report matters more than it would for a cleaner bank. The consensus rating is Buy with an average target around 30% above the current price, so the market is being paid to take that risk rather than ignoring it. Third quarter results are confirmed for Thursday before the open.

Dow (NYSE: DOW)

Dow makes the basic chemicals and plastics that end up in packaging, paint, insulation, and car interiors, so it rises and falls with global industrial demand. That demand has been through a prolonged downturn, margins are squeezed, and the stock trades near 12.5 times forward earnings while paying a dividend of about 4.7%. 

You should know the company already halved that dividend in July 2025, from 70 cents a quarter to 35, citing the macro environment, so the current yield is what survived a cut rather than one that has held throughout.

Whether 35 cents holds through a longer trough is the honest risk here. The counter is that the average analyst target sits about 15% above the current price, and chemical cycles do eventually turn without needing anything clever to happen first. Third quarter results are confirmed for Thursday.

That's our coverage for today; thanks for reading! Reply to this email with feedback or any stocks you want me to check out.

Best Regards,
—Noah Zelvis
Undervalued Edge