Hedge funds cut NFLX, keep big bets on MSFT, AMZN, add NVDA
When InvestingPro’s Fair Value model identified Altice USA (NYSE:ATUS) as significantly undervalued in August 2024, the telecommunications company was trading at just $1.79 per share. Nine months later, this analysis has proven remarkably accurate, with the stock delivering a 54.75% return for investors who acted on the signal.
For investors seeking similar opportunities, InvestingPro’s Most undervalued list continues to identify potentially mispriced stocks using the same proven methodology.
Altice USA, a provider of broadband, television, and telephony services, was experiencing volatile trading prior to the Fair Value signal, with monthly returns swinging between -26% and +28%. Despite this volatility, InvestingPro’s comprehensive analysis indicated a fair value significantly above the trading price, projecting potential upside of 40.78%.
The company’s fundamentals at the time showed annual revenue of $9.11 billion and EBITDA of $3.46 billion. While facing some operational challenges, including slight pressure on margins, InvestingPro’s financial health score of 3.16 suggested underlying stability that the market was not fully appreciating.
The stock’s subsequent performance has validated this analysis. Following the fair value alert, ATUS saw an immediate positive response, with a 33.7% gain in September 2024. Despite recent mixed earnings results and significant insider selling by director Patrick Drahi, the stock has maintained most of its gains, currently trading at $2.53.
Recent developments have brought both challenges and opportunities. While the company missed Q4 2024 estimates, Citi maintains a Buy rating, citing opportunities for cost reduction and positive price actions in 2025. The company’s revenue has slightly decreased to $8.95 billion, but management’s focus on operational efficiency has helped maintain investor confidence.
InvestingPro’s Fair Value methodology combines multiple valuation approaches, including discounted cash flow analysis, peer comparisons, and analyst consensus targets, while considering company-specific factors and market conditions. This comprehensive approach helps identify opportunities that simpler valuation metrics might miss.
For investors looking to uncover similar opportunities, InvestingPro offers real-time access to fair value alerts, financial health scores, and detailed analysis across thousands of stocks. With its proven track record in identifying mispriced securities, InvestingPro continues to help investors make more informed investment decisions based on comprehensive fundamental analysis.