Key insights
- The article identifies three undervalued stocks (LEN, LAD, VTRS) based on low forward P/E ratios and institutional/insider buying. Lennar (LEN) benefits from a housing supply deficit and decreasing construction costs. Lithia Motors (LAD) is driven by its growing finance arm and analyst upgrades. While not fully detailed, Viatris (VTRS) is also presented as a value play. Positive, but limited, influence on US equities.
Been spending the last couple weeks screening for stuff that's actually cheap and not cheap for a reason. Filtered for forward P/E between 4-9x, cross referenced with institutional filings and insider activity, and ended up with three that I think are genuinely interesting. Not sexy picks but that's kind of the point.
LEN (Lennar): ~7x forward P/E
Homebuilder trading about 30% below its 52-week high. On paper you'd think housing is in trouble but the thesis is pretty simple. There's a roughly 4 million home deficit in the US and anyone with a 3% mortgage isn't selling anytime soon. So new builds are basically the only supply.
They just spun off Millrose Properties to go asset-light which should free up capital. Sitting on $2.1B cash with debt-to-capital under 15%. Construction costs came down 7% YoY and inventory turns went from 1.7x to 2.5x. Guiding 85k home deliveries for 2026.
The thing that caught my attention is 5 US politicians have opened LEN positions in the last 12 months. Take that however you want but I pay attention to it.
Spring selling season is the near term catalyst.
LAD (Lithia Motors): ~8.9x forward P/E
Auto retailer with 455 locations across the US, UK, and Canada. Not exciting until you look at the numbers. Revenue $37.6B, grew 4% YoY. But the real story is their finance arm, Driveway Finance Corp, just turned its first profitable year at $75M with guidance toward $150-200M annual. That's a high margin recurring revenue stream bolted onto a retail business.
Morningstar has fair value at $387 vs current price around $270. That's 43% upside. Simply Wall St has it at an even bigger discount. Management bought back 11.4% of outstanding shares in 2025 which tells you they agree with the valuation gap.
UK same-store gross profit up 10%, aftersales gross profit up 9.4% same-store. Web traffic up 21% YoY to about 200k visits/month. Multiple analysts have buy ratings (Citi $366, BofA $335).
VTRS (Viatris): ~5.5x forward P/E
This is the turnaround play. New CEO finished the "Phase 2" restructuring, divested billions in non-core assets, paid down a ton of debt. Now positioned as a specialty pharma/high-barrier generics company in 165+ countries.
Guiding $14.7B revenue for 2026 with 3% growth and $450-550M from new product launches. The big catalyst is MR-141 for presbyopia with an FDA date in October. Their trial targets like 90% of US adults over 45 so the TAM is massive if it gets approved.
What got me interested was the hiring data. Open positions jumped 170% in 3 months to about 370 roles. Companies don't hire like that if they're just maintaining. Vanguard and BlackRock both added to positions late 2025. Institutional ownership is around 84%.
At 5.5x forward P/E and 6.5x EV/EBITDA this thing is priced like it's dying but the operating data says otherwise.
None of these are going to 10x overnight. But at these valuations with institutional money flowing in, I think the downside is pretty limited and there's a real margin of safety in all three. The market is so focused on AI and growth right now that boring stuff like this gets left behind.
Source for some of the data: altindex.com/news/value-stocks-to-buy-march
Curious if anyone else is looking at these or has a reason I'm wrong.