Welcome back to Undervalued Edge, your evening briefing on the value plays Wall Street keeps overlooking.
Markets keep chasing the same handful of names while an activist investor is publicly pushing a household brand company toward a sale. Below are the names on our radar this week, starting with the one driving today’s headline.
AI Stocks (Sponsored)
Most people know Elon Musk for rockets, EVs, Neuralink, and tunnels.
But his newest move may be tied to something completely different.
This technology is already being rolled out in multiple states, demand is rising fast, and major AI players are racing to secure access.
A few little-known companies control the supply chain behind it.
That means anyone who wants in, including Musk, Sam Altman, or other AI leaders, may need to go through them first.
Click here to see the little-known stocks tied to Elon’s next big move.
*This ad is sent on behalf of Altimetry, 110 Cambridge Street, Cambridge, MA 02141. If you would like to optout from receiving offers from Altimetry please click here.
Banking
Hope Bancorp’s Margin Recovery Has Not Closed Its 25% Book-Value Gap
Hope Bancorp Inc. (NASDAQ: HOPE) trades near $13.45 after reporting second-quarter net income of $33 million, up 12% from the previous quarter. Earnings reached $0.26 per share, driven by stronger lending, lower funding costs, and expense control, improving the bank’s core results.
Net interest margin expanded to 2.96%, up from 2.90% in the first quarter and 2.69% one year earlier. Gross loans increased 2% sequentially to $15.03 billion, while nonperforming assets declined from the previous quarter.
Hope still trades about 25% below its $17.97 per-share book value and almost exactly at its $13.85 per-share tangible book value. You are not paying a premium for the early signs of improving profitability.
The Discount Needs Better Returns
Margin expansion and lower credit costs strengthen your valuation case, while the $0.14 quarterly dividend yields above 4%. Hope also returned $44.6 million through dividends and stock repurchases during the first half.
Commercial Real Estate Keeps the Gap Open
Commercial real estate accounts for more than half of the loan portfolio, and integration work remains incomplete. You need continued margin growth, stable credit quality, and cleaner execution before the stock can move meaningfully above tangible book value.
Application Software
Blackbaud’s AI Campus Expansion Meets a 6.8x Earnings Multiple
Blackbaud Inc. (NASDAQ: BLKB) trades near $35 after expanding its Student First relationship into a strategic innovation partnership for higher education. The companies will coordinate product development, sales, and marketing around an AI-powered platform covering enrollment, financial aid, tuition payments, fundraising, and financial management.
The announcement gives Blackbaud a fresh product catalyst before second-quarter results arrive on July 29. Analysts expect roughly $5.19 in adjusted earnings per share this year, while the company’s own guidance calls for $280 million to $290 million in free cash flow.
At the current price, Blackbaud trades near 6.8 times forecast earnings. You are paying a deeply compressed multiple for a profitable software company with predictable recurring revenue and aggressive share repurchases.
Cash Generation Makes the Discount Harder to Ignore
Annual guidance implies a free-cash-flow yield above 17% against a market value near $1.63 billion. Recurring revenue represented more than 98% of first-quarter sales, giving your valuation case a steadier base than the low earnings multiple suggests.
Earnings Must Turn the Partnership Into Proof
The Student First expansion included no contract value or near-term revenue target, while growth remains modest and total debt sits near $1.2 billion. You still need stronger organic growth, stable margins, and a clean July 29 report before the discount can become a genuine rerating case.
Market Risk (Sponsored)
Wall Street banks are warning that the next market crisis could be unlike anything investors have seen in decades.
If Goldman Sachs and Morgan Stanley are right, portfolios could remain under pressure for 10 years or longer.
After repeated market shocks since 2022, some experts believe the instability could continue well into the 2030s.
See How to Defend Your Portfolio Now
Biotechnology
MapLight’s 67% Trial Crash Leaves 72% of Its Value in Cash
MapLight Therapeutics Inc. (NASDAQ: MPLT) trades near $12.18 after losing roughly 67% in one session on mixed Phase 2 schizophrenia data. The 210/3 mg twice-daily dose met the primary endpoint, but the 330/6 mg once-daily regimen showed only a numerical improvement and did not achieve statistical significance.
The selloff treated the convenient dosing failure as the defining result. Yet the successful twice-daily arm also improved key symptom measures and a prespecified cognition endpoint, with no serious or drug-related severe adverse events reported.
MapLight ended March with $395.2 million in cash, cash equivalents, and investments against a current market value near $551 million. The balance equals roughly $8.74 per share, meaning you are paying only about $3.44 above the company’s liquid-capital position for the entire pipeline.
The Main Dose Still Has a Path Forward
Management plans to discuss the program with the FDA and prepare another confirmatory trial that could support an eventual application. The twice-daily result gives your valuation case clinical substance, but it does not remove the need to reproduce the benefit in another study.
Cash Protection Can Disappear Quickly
MapLight used $51.2 million in operating cash during the first quarter and remains far from an approved product. You still face trial risk, regulatory uncertainty, dilution, and the possibility that twice-daily dosing limits commercial demand even if the drug ultimately succeeds.
Actionable Picks This Week
Mattel (NASDAQ: MAT), the toy and family entertainment company behind Barbie, Hot Wheels, and Fisher-Price, is trading around 8 times earnings, less than half the industry average and a fraction of what its closest peers command, and an activist shareholder is not letting that slide.
In May, the investor sent an open letter urging the board to explore a sale or merger, arguing the market is not giving the brand portfolio credit. The stock hit a 52-week low after a rough first quarter where North America sales slipped, and management pointed to tariffs, currency swings, inflation, and higher ad spend, leaving shares down roughly 30 percent this year.
Wall Street’s own targets are scattered, with the average analyst target implying solid upside and deeper cash flow models pointing even higher, though the desks that cut targets after the activist letter still see the stock as cheap, just less dramatically so. Q2 earnings land August 4, and the real number to watch is whether management says anything about entertaining outside offers.
Veeva Systems (NYSE: VEEV) trades around $186 against fair value estimates that cluster closer to $285 to $290, a real discount even after you throw out the more aggressive outlier estimates north of $300. Veeva is the cloud software backbone for global life sciences companies, so owning it is a bet that pharma and biotech R&D spending keeps flowing through software rather than spreadsheets.
The most recent quarter beat and guidance moved higher, and the company just launched a new environmental health and safety product line to widen its footprint. The honest pushback is that the stock already trades above what a straight earnings multiple comparison would justify, so you are paying for durability the bulls have not fully proven yet. Consider accumulating on weakness rather than chasing strength.
Genuine Parts Company (NYSE: GPC) already reported, and it was a good one. Q2 adjusted earnings beat estimates, sales rose 6 percent, and management reaffirmed full-year guidance while confirming its planned motion and industrial business separation stays on track for the first quarter of 2027.
The stock jumped more than 20 percent on the print, which took some of the deep discount off the table, but shares still sit modestly below fair value estimates, and the dividend gives you a floor while you wait for the separation to unlock more value. The risk is that the post-earnings pop already priced in the good news, leaving less room for error if the spin-off timeline slips.
Teva Pharmaceutical (NYSE: TEVA) is the one to approach with your eyes open. The stock has more than doubled over the past year, and depending on which valuation lens you use, it looks either meaningfully overvalued on a straight earnings multiple basis or meaningfully undervalued on a cash flow basis tied to its branded pipeline, led by Austedo and Uzedy.
Both readings are live right now, which is exactly why this is the contrarian pick and not the safe one. If you believe the branded pipeline is doing enough heavy lifting to justify paying up, the cash flow case wins. Q2 earnings land July 29.
Income Strategy (Sponsored)
His official paycheck? $400,000 a year.
But the real story is somewhere else: As much as $250,000 per month… from a single source.
It’s not real estate. It’s not the stock market.
So what’s actually producing this level of cash flow — and why are more investors turning to it today?
Fast Movers to Watch
Amkor Technology (NASDAQ: AMKR) reports tonight after the close, so consider this your last look before the numbers. This is one of the few Western pure plays in advanced chip packaging, the step that turns raw silicon into the finished modules going into AI servers, and a fresh $1.5 billion deal with Nvidia to expand capacity has kept the story alive.
The stock is not cheap on trailing earnings, trading north of 30 times, but cash flow-based models still peg it as undervalued, and analysts have been raising estimates into the print. Watch for commentary on forward bookings and order book durability into the back half of the year.Pentair (NYSE: PNR) already warned. Two and a half weeks ago, the company slashed full-year guidance after a much sharper Pool segment inventory correction than expected; the stock fell about 17 percent in a single session, and the CFO resigned four months into the job.
Tomorrow’s formal Q2 report should mostly confirm what management already told you, but the Flow segment, which makes water and cooling infrastructure for data centers, is the part of the business that did not just miss. The stock is trading near its 52-week low with heavy institutional ownership still intact, which tells you the big money has not bailed on the Flow story.Ingram Micro (NYSE: INGM) reports Q2 after the close on July 30, and this one keeps getting overlooked because people underestimate how leveraged it is to enterprise server demand.
Morgan Stanley just raised its price target here, citing an industry forecast for the server market to grow roughly 82 percent this year. A confident guide on the call could push estimates meaningfully higher across the board.
What's the most you've ever been down on a position you ultimately held through — and won?
Everything Else
A free report names a handful of small companies showing the same early growth patterns most investors miss before the biggest moves begin.
Oil tumbled as much as 7 percent after the US and Iran paused military strikes, triggering a broad relief rally across stocks, bonds, and gold.
Intel posted Q2 earnings of 42 cents per share against a 21-cent estimate, with revenue of $16.13 billion topping forecasts by nearly 12 percent.
SAP shares rose in pre-market trading after the company reported a 27 percent jump in cloud order backlog and revenue that beat European analyst forecasts.
Iberdrola agreed to take control of Finnish utility Caruna in a $2.3 billion deal, one of several multi-billion-dollar utility and energy transactions signed this month.
That's our coverage for today; thanks for reading! Reply to this email with feedback or any [blank] stocks you want me to check out.
Best Regards,
—Noah Zelvis
Undervalued Edge
