5 Undervalued Stocks to Buy Now

Daniel Pronk•May 23, 2026

Summary

Daniel provides a comprehensive analysis of five specific stocks that he believes offer value in the current market environment. His thesis revolves around the idea that the market is currently punishing high-growth companies for prioritizing market share over short-term profits, or is unfairly discounting high-quality firms due to fears of AI competition.

Sea Limited (SE): This company is seeing explosive growth in its e-commerce (45%) and fintech (71%) segments, even as its gaming division serves as a cash flow generator. Daniel notes that the stock has corrected 53% from recent highs despite revenues and operating income being at all-time highs, resulting in a forward P/E of 20.7.

Nubank (NU): Daniel highlights that this digital bank is growing its net income by 41% year-over-year with a return on equity of 29%. He points out that it trades at a forward P/E of only 13, which he considers an all-time low for a business with such massive market share opportunities remaining in Brazil and Mexico.

S&P Global (SPGI): Characterized as a 'toll booth' on the global financial system, this company is trading at 20x forward earnings, well below its median of 28.6. Daniel argues that SPGI's proprietary data makes it a beneficiary of AI rather than a victim of disruption.

Constellation Software (CSU): Daniel views this vertical market software acquirer as exceptionally high quality, noting its 20% compounding growth in revenue and free cash flow. He mentions that even with pessimistic assumptions of 13% growth and a 17x FCF multiple, the stock could compound at 15% annually.

Construction Partners (ROAD): This infrastructure play focuses on the recurring maintenance of asphalt roads in the U.S. Southeast. Daniel likes its 22.6% annual revenue growth and its strategy of acquiring local operating companies to double revenue by 2030.

Mentioned Stocks

Sentiment: BUYAction: RECOMMENDED

Reasoning: Daniel describes Nubank as 'truly, truly undervalued' at a forward P/E of 13. He emphasizes its 41% net income growth, high ROE of 29%, and the massive runway for growth in Mexico and Brazil where it still has low market penetration in many financial services.

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CSU

Sentiment: BUYAction: BOUGHT

Reasoning: Daniel explicitly states he has been a buyer on the way down, mentions a purchase price of approximately $2,400 per share, and views the stock as undervalued at 15x free cash flow. He argues vertical market software is resistant to AI disruption because customers prioritize reliability over new interfaces.

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Sentiment: BUYAction: RECOMMENDED

Reasoning: Daniel believes Sea Limited is offering significant value with a forward P/E of 20.7 while in a 53% correction. He notes that Shopee and its lending business are growing rapidly (45% and 71% respectively) and that the underlying business fundamentals are at all-time highs.

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ROAD

Sentiment: BUYAction: RECOMMENDED

Reasoning: Daniel finds this 'boring' business attractive due to its 22.6% revenue CAGR and the high recurring demand for road maintenance. He notes the company is executing well on an acquisition-led strategy and suggests they often beat their own conservative guidance.

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SPGI

Sentiment: BUYAction: RECOMMENDED

Reasoning: Daniel argues that the 20x forward P/E is cheap compared to the historical median of 28.6. He believes S&P Global's proprietary data protects it from AI disruption and actually makes it a beneficiary of AI integration into customer workflows.

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