3 Value Stocks Flying Under the Radar—For Now

Key Points

• Value stocks have underperformed growth names recently, leading some investors to prioritize strongly undervalued names.
• Three companies with value metrics flashing and the support of analysts include TEN, GTN, and VYX.
• Though all three have experienced share price increases year-to-date, there remains a case for each that they are undervalued relative to peers or the broader market.

As a group, value stocks have tended to underperform their growth peers in recent quarters. This may position some companies in the value category as even more compelling, given that they may now trade at a deeper discount relative to their intrinsic value compared to some other popular names within the same industries.

Now may also be an opportune time for investors taking a longer view on value names, particularly given recent volatility and uncertainty about the broader economy. The three companies below all enjoy analyst support but may be unfamiliar to value investors.

Long View on Contracts, Supported by Fleet Management and Dividend Health

Tsakos Energy Navigation Ltd. NYSE: TEN provides sea-based crude oil and petroleum transportation services. It got a modest boost on mixed earnings for the first quarter after it reported in mid-June. Earnings per share (EPS) beat analyst predictions handily but still came in below the prior-year quarter. Revenue was about half a million dollars shy of expectations, but this obscures the fact that the company has an impressive $3.7 billion in backlog with contracted employment averaging more than 12 years.

A longer contract horizon is only possible if Tsakos adequately maintains its fleet, and the company appears to be doing just that. The company is on track to sell off another six of its older vessels by the end of the year, following prior sales of 14 vessels, freeing up about $100 million for everything from new builds to dividend payouts.

Speaking of dividends, Tsakos' yield of 5.97% is achievable with a strong payout ratio of 26.7%, making the stock an attractive choice for passive income seekers as well. Despite growing by about 12% this year, shares of TEN may still be substantially undervalued; the company's price-to-earnings (P/E) ratio of 4.5 is still significantly below the transportation sector as a whole, which has a P/E ratio of around 13.1.

Strategic Station Swap and Debt Refinancing Boost Gray's Prospects

Television broadcasting outfit Gray Media Inc. NYSE: GTN made headlines earlier in the summer when it agreed to swap stations with The E.W. Scripps Co. NASDAQ: SSP in markets in Michigan, Louisiana, and elsewhere. The deal should drive growth by creating a duopoly in Lansing and bulking up Gray's offerings in other locations.

The company also recently refinanced $700 million in debt, extending maturities until 2032, which should remove some of the near-term pressure on the company even as it must eventually reckon with higher interest rates. Nonetheless, investors should keep an eye on Gray's cash holdings and free cash flow, particularly as it may make additional acquisitions in the future.

Shares of GTN have already surged by some 58% year-to-date (YTD), threatening to eat away at the company's proposition as a value play. However, with a P/E ratio of 2.3, when the broader sector sits at 21.6, and analysts betting on upside potential of more than 16%, value investors may still find reason to consider Gray.

First-Quarter Revenue Decline for NCR Voyix Hides Firm's Success With Tariffs and ARR

Digital commerce tech firm NCR Voyix Corp. NYSE: VYX develops point-of-sale hardware and software, scanners, check processors, and more. Despite a middling first quarter in which revenue dropped about 13% year-over-year (YOY), the company still outperformed analyst predictions on both the top and bottom lines. This marks NCR's success at bypassing an expected tariff surcharge for the full year of up to $20 million.

NCR's annual recurring revenue (ARR) has grown as a percentage of its total revenue, now representing two-thirds of overall sales. This bodes well for the firm's anticipated launch of its cloud-native Voyage Commerce Platform later in the year, a move that will shift a substantial part of its customer base to a recurring subscription model.

VYX shares are up about 9% YTD, likely driven also by the company's steady stock repurchasing actions that could total as much as $200 million in this latest series. Despite these gains, NCR Voyix still trades at an attractive price-to-sales ratio of 0.71, and four out of five analysts deem it a Buy.