Hello and welcome to the Undervalued Edge, the twice-weekly newsletter covering the biggest opportunities in the [blank] world.

Today, we’ll look into the latest [blank] news, highlight some recent movers, and investigate an under-the-radar [blank] stock with potential.

Retail

MINISO Group Holding Limited (NYSE: MNSO) trades near $11 after first-half revenue climbed 22.4% to $1.69 billion. North American revenue jumped 37%, while operating cash flow increased 45.5% to roughly $217 million.

The valuation tells a very different story. MINISO trades near seven times forward earnings and carries a dividend yield around 6%, even as its store network expands and international sales keep growing. More than $1 billion of cash and current financial assets also sits on the balance sheet, equal to roughly one-third of the company’s market value.

Shareholders are already benefiting from that liquidity. MINISO returned about $193 million through dividends and repurchases during the first half and has another HK$2 billion buyback program in place, so you are not waiting for management to discover capital returns.

Growth Is Coming With a Price

Selling and distribution expenses jumped nearly 36% in Q2, pushing adjusted operating margin down to 12.6% from 17.2%. Your upside now depends on international expansion eventually producing enough scale to reverse that margin compression.

The Stock Already Reflects Plenty of Doubt

Adjusted Q2 net profit declined, while investment and foreign-exchange losses pushed GAAP results into the red. MINISO still has to prove that 20%-plus revenue growth can translate into stronger earnings, but a seven-times forward multiple leaves far less optimism embedded in the current price.

Financial Technology

PayPal Holdings Inc. (NASDAQ: PYPL) trades near $54.46 after reports that Stripe and Advent International abandoned their takeover pursuit. The consortium had offered $60.50 per share, a price PayPal’s board reportedly considered inadequate, before financing and regulatory concerns helped derail the talks.

The selloff leaves PayPal near 10 times its roughly $5.38 adjusted EPS outlook for 2026. Management also expects about $6 billion of adjusted free cash flow, equal to roughly 13% of the current market value, so you are getting substantially more cash-flow yield after today’s deal premium disappeared.

PayPal plans around $6 billion in share repurchases this year, also roughly 13% of its current equity value. Q2 payment volume increased 10% to $486 billion, while revenue rose 5%, showing the underlying business did not suddenly weaken with today’s takeover news.

The Lower Price Makes Buybacks More Powerful

PayPal can now retire more shares with the same repurchase dollars than it could before today’s drop. Your upside does not require another bidder if sustained free cash flow keeps shrinking the equity base at roughly these valuations.

The Market Still Questions the Core Franchise

Branded checkout growth remains sluggish, operating margins have faced pressure, and competition from Stripe, Apple, Google, and other payment platforms continues. A rejected $60.50 offer provides an interesting valuation marker, but the stock ultimately needs stronger checkout trends and consistent cash generation to prove today’s discount is excessive.

Cybersecurity

N-able Inc. (NYSE: NABL) expanded its share-repurchase authorization by $50 million, leaving roughly $95 million available for buybacks. Against a market value near $810 million, the remaining authorization equals almost 12% of the company.

The announcement arrives after a punishing August reset. N-able lost about 36% in one session after management reduced its 2026 revenue and ARR forecasts, yet Q2 subscription revenue still rose 6.1%, and ARR reached $544.5 million.

At roughly 10 times forward earnings and 7 times guided adjusted EBITDA, you no longer have to pay a premium software multiple for the business. Non-GAAP gross margin remains above 80%, and adjusted EBITDA margins are running close to 30%.

A Cheaper Stock Gives the Buyback More Weight

A lower share price gives management considerably more purchasing power. If N-able deploys a meaningful portion of the $95 million authorization around current levels, your ownership percentage can benefit even without a return to faster growth.

The Selloff Was Not Without Cause

Renewal rates weakened, pricing pressure affected parts of the portfolio, and management lowered its growth expectations. N-able also disclosed a material weakness in internal controls, so the market has legitimate reasons to keep the valuation restrained.

Shares remain roughly 50% below year-ago levels despite today’s rebound. You do not need the old growth story to return for the valuation to work, but N-able must stabilize renewals, protect margins, and turn its large buyback authorization into actual share reduction.

HP Inc. (NYSE: HPQ)

HP looks like the clearest value setup in the group, with the market still focused on the weaker parts of its hardware business. Fiscal third-quarter revenue rose 12.5% to $15.7 billion, adjusted EPS reached $0.83, and free cash flow came in at $1.6 billion, while management raised its full-year cash and earnings outlook.

Personal Systems volumes are under pressure and higher memory costs could squeeze margins, but those concerns are already reflected in a valuation that remains below estimated fair value. HP also has enough cash generation to keep funding its dividend and buybacks while it waits for the PC cycle to settle. The appeal here is not a sudden hardware revival, but getting paid to wait while a mature business continues producing cash.

ICON plc (NASDAQ: ICLR)

ICON is the patient value play, with a large backlog and a valuation that still reflects concerns about biotech and clinical-trial spending. Second-quarter revenue reached $2.06 billion, adjusted EBITDA was $327.2 million, net business wins totaled $3.12 billion, and book-to-bill came in at 1.51. Management reaffirmed its 2026 outlook, while the backlog gives the company substantial work already in hand as funding conditions improve.

Current valuation work continues to show ICON below estimated intrinsic value, with its sales multiple also sitting well below life-sciences peers. The setup needs time, but the combination of backlog, new bookings and a discounted valuation gives you something concrete to wait for.

SAIC (NASDAQ: SAIC)

SAIC is the least flashy of the three, which is part of what makes the valuation interesting. The government technology contractor recently secured a $400 million recompete supporting a U.S. intelligence agency, adding to its established base of defense and government work. SAIC reports fiscal second-quarter results before Monday’s open, giving you a near-term read on bookings, margins and its outlook.

The stock trades below estimated fair value, although the discount is smaller than the one attached to some of the other names here. Government budget timing remains the main risk, but steady contract wins and cash generation do not require a heroic growth story to make the numbers work.

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