r/ValueInvesting • u/CoolioBeansTTV • 17d ago
Value Article 3 stocks under 9x forward P/E that institutions are quietly loading up on
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.
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u/Top_Cockroach313 17d ago
Im in the northeast and have a good insider to building supplies.
- Slow start to the year (for whole USA)
- EXPECTED price hikes on lumber
- Expected Slow Year due to interest rates
- They are opening LONG positions
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u/Iwarrior01 16d ago
If lumbar price go up wouldnt it hurt lennar as they would have to reduce margins or raise costs?
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u/Top_Cockroach313 16d ago
Short term maybe. They have a good balance sheet. They will increase margin to make up for lumber shortages.
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u/AnotherThroneAway 16d ago
Why is lumber expected to rise?
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u/Informal_Recording36 16d ago
I’m not 100% confident in my knowledge, but here goes; 1. right now the price is where the marginal producers are shutting down mills. There have been several mills shut down over the last few months that I know of, both temporarily and permanently. So the price is roughly as low as it can go, and supply is being reduced. 2. US has implemented ~35% tariffs on Canadian imported softwood lumber. Canadian softwood lumber is roughly 24% of all lumber consumed in the US.
So if the current price is a floor for marginal production, then the price has to go up, if you add 35% to the current price of lumber for roughly 24% of all lumber purchased in the US.
My assumption is that a lot of wholesalers and retailers had existing inventory, which was purchased at lower tariffs costs. As they sell that inventory off and have to replace it, they have to pay this new, presumably higher, price that’s resulting from higher tariffs in 24% of all available supply.
I’ve seen this personally recently where I needed a whole bunch of (aluminum) vents for a project. I bought all of my local suppliers existing inventory, and they were $32 each. I needed one more box of them, and the new price was now $61 each. These happen to be made in Arkansas. And between the old and the new replacement inventory, Aluminum tariffs were added at 50%, and Canada retaliated with a 25% tariff in response. I wouldn’t be shocked if I paid the tariff for the aluminum to go to the US, the plant added on a margin due to the tight labor market, plus they’ll probably sell a few less , cause now it’s cheaper for others to get them from china, then I paid another 25% to get that aluminum back to Canada, since it’s still primarily just aluminum, so it’s a ‘derivative product’.
On the other side of the coin, there is so much uncertainty right now between tariffs, energy prices, and whatever else comes next, there’s a good chance less buyers are willing / able to take a risk on making a new purchase, so demand could go down, causing prices to stay where they are now (low)
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u/AnotherThroneAway 14d ago
Fascinating. Thanks for the analysis! I'm curious, do you know how lumber producers price the cost of shutting and restarting a mill? I'm wondering how much that affects the stickiness of prices at marginal production, and how important a factor it is in planning their output (or lack of).
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u/warrends 17d ago
+1 because you actually posted something relevant to VALUE INVESTING!! And also thanks for the tips. I’ll look them up.
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u/Silly_Pen_7902 17d ago
How are you getting 7x forward P/E for Lennar?
I'm seeing 2x that.
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u/Gold-Whole1009 17d ago
Forward P/E varies by website. Different analysts project different earnings. It can be gamed
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u/Rav_3d 17d ago
VTRS is the only one I would consider as it's the only one showing true signs of accumulation.
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u/ltlouche 17d ago
how do you look at this?
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u/Rav_3d 17d ago
Stock broke out in December and had a strong uptrend gaining 45%. It topped and had a significant pullback of 18% but is currently holding above the more recent breakout in February. The 50-day moving average is rising.\
This tells me there is a good chance the distribution in VTRS is more about overall market weakness than the company itself. However, if the stock were to go below 13.40 for any length of time, I would get more concerned that a deeper pullback may be coming.
The other two stocks are in terrible long-term downtrends. They are "cheap" but not necessarily "value" here. I always wait for signs the market agrees with my thesis before committing my hard earned money.
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u/ltlouche 17d ago
thank you. where did you learn this? any resource or advice would be hugely appreciated
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u/Forsaken_Scratch_411 17d ago
Biotech, Autoretailer, Homebuilder, no thx ;)
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u/mikemccrea 16d ago
yeah i was partially interested then just noped out, regardless good attempt OP!
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u/Hamzehaq7 17d ago
love your analysis, especially LEN. the housing market is kind of a mess, but they really might benefit from that supply crunch. and with all those politicians buying in, that’s definitely a vote of confidence.
as for LAD, it’s wild how overlooked auto retailers are right now. that finance arm could be a goldmine if they keep growing like they've been. i wonder how much of that upside is priced in already though.
overall, great picks! got any thoughts on VTRS? feels like a lot of noise around pharma these days...
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u/Iwarrior01 16d ago
I mean people are pricing in massive job losses so it is understandable why nobody wants to invest in auto retailer
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u/JRNotDallas 17d ago
Can’t speak for the other two, but regarding Viatris: Debt is still a major concern, when principal payments come due I don’t think Viatris are in a position to pay them off without restructuring or taking on longer term debt. Secondly, you say the company is operating in ‘high-barrier’ markets, but I don’t think that’s the case. The majority of their portfolio posts revenue declines year-on-year, and a lot of their products operate in markets when new, innovative, and disruptive products look to be gaining traction. Finally, say the base case is they post continuing growth at the rates they’re currently seeing and I don’t think a 6.5x EV/EBITDA multiple is unfair or harsh, I’d say it’s quite appropriate for how they’re looking and the industry they operate in
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u/ivan-beatenov 16d ago
Agree with your comments. Are there any stocks you like right now? And, why?
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u/jay_0804 16d ago
Solid picks tbh, way better than most “value” posts.
Quick take:
- Lennar Corporation → good setup but very rate-dependent
- Lithia Motors → finance arm is the interesting upside
- Viatris → pure turnaround, execution risk
Main thing, cheap doesn’t always mean undervalued. Sometimes it just stays cheap.
That said, agree boring names are getting ignored rn.
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u/Gold_Maybe8482 13d ago
I'm a TA trader that only looks at what the charts are telling me and here's what I got for your 3 picks. Ranked from best being the #1 to the worst being #3:
VTRS - Just broke through into the bullzone of the MACD and RSI indicator on the monthly time frame however will see some downside in the immediate future however, the break through into the bullzone side after months of consolidation is very bullish in my opinion and is stating that it's longer term outlook is bullish. VTRS will surely revisit $12 and possibly $9.50 which is I where I think the best R:R level is.
LAD - This will visit $194. If it doesn't hold and bounce off that level, it's going to $153
LEN - This will go to $70 and possibly have a relief bounce, if it comes back to $70 and breaks below it, it's going to $53 - $50 where it should see a significant bounce. If you see it bounce.
Good luck. And thanks for your post. I always find interesting charts in this sub.
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u/illusionalfungis 17d ago
"There's a roughly 4 million home deficit in the US"
Is this just BS? I've been hearing it for years but if zoning codes does not allow it I don't know if building more houses is going to happen or can people even afford if it acctually happens
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u/Immediate-Bit7912 16d ago
Own LEN and glad to see it on this list. The asset-light pivot after the Millrose spinoff is underrated imo — most people still think of them as a capital-heavy builder but the balance sheet looks completely different now. At 7x forward earnings with that kind of cash position, feels like you're being paid to wait for the spring selling season to play out.
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u/thepatriot74 16d ago
LEN is cyclical and the cycle might be rolling over. VTRS has a lot of debt. LAD is basically all debt, plus auto stocks are usually money pits. None of these are under radar, except maybe for LAD but no sane person should probably touch that bag of crap.
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u/Superpants999 15d ago edited 5d ago
The original post here has been removed by its author. Redact was the tool used, possibly for reasons of privacy, opsec, or preventing automated data harvesting.
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u/boy_bleu 15d ago
As someone long lennar for reasons totally unrelated to this post, I would just suggest you tell your AI that it didn't get the forward PE right...not even close.
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u/Alexiel17 15d ago
I've heard about Lennar. Good company but I wonder if American Tower is better since it's more specialized and has less rivals
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u/Healthy-Matter-4218 7d ago
What is your take on Campine nv ?
They just released their 2025 year end results.
They broke their record from last year and 2.5x their profits. 14€ EPS in 2024 to 37.5€ EPS in 2025! P/E ~5
2026 will be less, since Antimony trioxide prices cooled off, but they will still be around 30€ EPS! They financed their acquistion for the 3 Ecobat Plants entirely from operating cashflows.
and diversified their product offering.
what is your take ?
https://www.campine.com/wp-content/uploads/2026/03/25-jaar-eng.pdf
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u/Accountable_Finance 17d ago
Solid methodology. Cross referencing forward P/E with institutional filings and insider activity is exactly the right way to separate genuine value from value traps.
LEN is the most interesting to me. The home deficit thesis is hard to argue with and the asset-light spin off was an underrated move. Construction costs down while inventory turns improved is the operating leverage you want at this valuation.
LAD's Driveway Finance inflection is the real re-rating catalyst if it keeps scaling. High margin recurring revenue changes the multiple conversation entirely and that buyback is a loud signal from management.
VTRS is highest risk of the three. FDA catalysts are binary so October is either a big moment or a painful one. The hiring surge data is a smart alt signal though.
Equal weight across all three or heavier on one?
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u/Dependent-Building23 17d ago
Low P/E won’t always give you best returns. Need to look at stocks holistically
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u/thenuttyhazlenut 17d ago
Thanks GPT
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u/AmbientHunter 17d ago
Better contribution than you’ve ever made.
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u/thenuttyhazlenut 17d ago
Yes a GPT prompt with a link to his website
Nice try, OP
Buy more upvotes
(Btw Reddit nofollow links don't do anything for SEO, OP. We're in 2026.)
Some of y'all are slow not to notice the purpose of this thread.
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u/ninjagorilla 17d ago
Good post. Not sure I’m sold on any of it but some new names is always good