This company's products are almost certainly sitting in your kitchen right now, and its stock trades at roughly six tenths of what the business is estimated to be worth.

It pays a dividend near four percent that eats less than a third of profits, so it is covered rather than stretched. Read on, and see why the market stopped caring.

Energy

Select Water Solutions Inc. (NYSE: WTTR) gained support today as Bank of America maintained its Buy rating and raised its price target from $24 to $28. The increase followed Select Water’s $700 million agreement to acquire Pilot Water Solutions.

Pilot is projected to generate $120 million to $130 million of adjusted EBITDA in 2027. Including $10 million to $15 million of expected savings, Select is paying roughly 5.2 times EBITDA, below its own multiple of about 8.4 times. The $28 target stands roughly 45% above the $19.34 share price.

More than 80% of Pilot’s revenue comes from long-term contracts, with customer relationships averaging over seven years. The acquisition means you would own a business supported by recurring infrastructure revenue instead of shorter-cycle completion activity.

Contracted Water Reshapes the Earnings Mix

Management expects Water Infrastructure to produce about 70% of company profit by 2027. Pilot adds 700 miles of pipelines, 306,000 dedicated acres, and minimum-volume commitments covering 480,000 barrels per day. Those assets can deepen Select’s Permian position while savings improve the economics.

The Cash Portion Raises the Stakes

Select will fund $600 million of the purchase with cash and expects net leverage below 2 times at closing. A drilling slowdown could weaken water volumes, while integration problems could delay savings. Debt discipline will decide whether the contracted base strengthens your return or leaves shareholders carrying more financial risk.

Software

NiCE Ltd. (NASDAQ: NICE) received support today after Oppenheimer upgraded the stock from Perform to Outperform and set a $150 price target. The firm cited AI demand, enterprise customers, and cross-selling opportunities created by the Cognigy acquisition.

Around $106.81, NiCE trades at 15.5 times trailing earnings and carries a free cash flow yield near 10%. Oppenheimer says its valuation stands more than 50% below median multiples, while the target implies about 40% appreciation from the closing price.

The hidden value reaches beyond a low earnings multiple. NiCE could sell its Actimize financial-crime software unit for $2 billion, while Oppenheimer estimates Cognigy is already worth more than $2 billion. Subtracting those estimates from today’s $6.6 billion market value leaves $2.6 billion for the remaining customer-experience operation.

AI Is Becoming a Larger Revenue Engine

Second-quarter AI annual recurring revenue increased 52% to $362 million. Cloud revenue rose 12.6% to $609 million and represented 78% of total sales, showing that software revenue is expanding while NiCE integrates Cognigy and moves toward enterprise contracts.

The Asset Math Still Needs a Signed Deal

Actimize remains in negotiations, so its reported $2 billion value is not guaranteed. Competition from larger software companies could also pressure AI growth or pricing. Any final sale price deserves close attention in your assessment because NiCE would also surrender the unit’s operating profit.

Packaged Foods

Conagra Brands Inc. (NYSE: CAG) delivered a stronger fiscal first quarter than its depressed share price implied. Adjusted earnings reached $0.41 per share, beating the $0.28 consensus estimate, while adjusted EBITDA increased 2.4% to $451 million and management reaffirmed its full-year outlook.

Near $14, Conagra trades at approximately 9.8 times forward earnings and less than 7 times trailing free cash flow. That valuation also comes with a roughly 5% dividend yield, even after July’s dividend reduction, and reflects little confidence that the company can stabilize its large packaged-food portfolio.

The quarter offered early evidence of better operating discipline. Adjusted selling and administrative costs declined 3.7% even as advertising investment rose 15.1%, showing how management is funding its brands while cutting expenses elsewhere.

Margin Discipline Is Starting to Show

Net sales declined 1.4%, and organic volumes fell 2.1%, but adjusted EPS still increased 5.1%. Conagra also reduced net debt by $193 million from a year earlier, while lower interest expense and stronger earnings from the Ardent Mills joint venture helped offset pressure in grocery, snacks, and frozen foods.

Falling Volumes Remain the Central Risk

Consumers continue trading toward cheaper private-label products, and management expects organic sales to decline 1% to 3% this year.

Net leverage remains near 4 times EBITDA, leaving limited room for execution errors. Still, today’s profit beat, maintained guidance, and measurable cost progress give your assessment more than a low multiple and recognizable brands to consider.

McCormick (NYSE: MKC)

McCormick makes the spices, seasonings, and condiments sitting in your cupboard right now, plus Frank’s RedHot and French’s mustard. About as dull as a business gets, which is the entire point.

The stock trades roughly 41% below its estimated fair value with a quality score of 79 out of 100, paying a dividend near four percent that consumes under a third of profits. Margins are recovering after two brutal years, though inflation and freight costs remain live headwinds rather than solved problems. Quarterly results land tomorrow morning.

The bigger thing to know is that McCormick is combining with Unilever Foods in a deal expected to close around mid-2027, creating a business with roughly $20 billion in annual sales. That transaction changes the company’s debt profile and earnings base, so anyone buying the discount today is also buying into a materially different business once the deal closes.

PVH Corp (NYSE: PVH)

PVH owns Calvin Klein and Tommy Hilfiger, two brands you could pick out of a lineup blindfolded. On September 11, chief executive Stefan Larsson stepped into the open market and bought 14,179 shares at a weighted average of $70.53, roughly a million dollars of his own money.

The stock has been pressured all year on tariff worries, a soft Chinese consumer, and wholesale buyers ordering cautiously, and it trades at a low forward multiple.

Apparel is a sector where brand equity takes decades to build and about six quarters to squander, so the question is always whether weak numbers reflect a cycle or a decline. That is the valuation zone where apparel names either turn or keep sliding, and the man running it has placed his bet on the former. Worth watching whether other insiders follow him.

Macy’s (NYSE: M)

Macy’s is three years into a turnaround under Tony Spring, and the numbers have finally started cooperating. Comparable sales rose 2.7% last quarter, with the namesake brand up 1.1%, Bloomingdale’s up 11.3% and Bluemercury up 6.2%.

Management raised full-year earnings guidance to a range of $2.15 to $2.35. On top of that, $116 million in tariff refunds arrived, and roughly $96 million of it is being reinvested in the business and customer experience.

Department store retail is nobody’s favorite sector, which is exactly how a cheap valuation survives improving numbers for this long. The two smaller nameplates are doing the heaviest lifting here, so watch whether the core Macy’s brand can keep its own comps positive rather than leaning on Bloomingdale’s to carry the quarter.

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