5 Undervalued Stocks to Buy After Earnings

Daniel Pronk•May 13, 2026

Summary

Daniel identifies a divergence in the market where the broader index is rising while many individual stocks remain well below their peaks. He argues that this environment offers a significant amount of value for investors willing to look past the dominant mega-cap names. His thesis centers on identifying companies with double-digit growth rates and record-breaking fundamentals that have suffered from market-wide sector sell-offs or temporary margin compression.

Skyward (SKWD): Daniel describes Skyward as a specialty insurance company that dominates niche markets with limited competition and a balanced portfolio. He points out that the company has never missed analyst consensus as a public company and is currently trading at a low multiple of approximately 8.7 times 2026 earnings projections. Daniel highlights that despite industry headwinds, Skyward's operating earnings per share reached an all-time high of $1.25 in Q1, putting them on track to exceed their full-year guidance.

Shift 4 (FOUR): Daniel explains that Shift 4 is a globally diversified payment processor that has seen its share price fall despite posting robust earnings and organic growth. He notes that the company is trading at an exceptionally low valuation of 6.5 times its 2026 free cash flow expectations while aggressively reducing its share count by 20% over the last year. Daniel is particularly encouraged by the founder’s recent personal investment of $16 million into the stock at $41 per share, suggesting strong internal confidence.

Brookfield Asset Management (BAM): Daniel identifies BAM as a major beneficiary of the AI revolution due to its extensive portfolio of energy and infrastructure assets required to power data centers. He shares his personal valuation model, which suggests a fair value of $70 per share based on a 17% annual growth rate and a 4% dividend yield. Daniel emphasizes that the CEO expects a record-breaking fundraising year, with $67 billion raised year-to-date, positioning the stock for significant outperformance.

Mercado Libre (MELI): Daniel argues that Mercado Libre remains the dominant e-commerce and fintech player in Latin America, growing significantly faster than the regional market average. He dismisses concerns over declining margins, explaining that the company is intentionally sacrificing short-term profits to aggressively expand its high-growth advertising and credit sectors. Daniel notes that their advertising revenue grew by 73% in USD terms and that non-performing loans are actually decreasing as a percentage of their portfolio.

Mentioned Stocks

FOUR

Sentiment: BUYAction: RECOMMENDED

Reasoning: Daniel notes the stock is 'ridiculously cheap' at 6.5x 2026 free cash flow expectations. He is impressed by the 20% reduction in share count and the founder buying $16 million worth of shares recently at $41 per share.

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BAM

Sentiment: BUYAction: BOUGHT

Reasoning: Daniel has been actively buying BAM, citing it as an 'AI winner' due to its infrastructure and energy assets. He provides a fair value price target of $70 per share and expects 20% annual earnings growth.

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SKWD

Sentiment: BUYAction: RECOMMENDED

Reasoning: Daniel views Skyward as a high-growth specialty insurer trading at a significant discount (under 9x forward earnings). He highlights their perfect track record of meeting consensus and the CEO's confidence in beating 2026 guidance. He mentions the stock is currently trading around $45.58.

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MELI

Sentiment: BUYAction: RECOMMENDED

Reasoning: Daniel believes the 15% post-earnings drop is a buying opportunity. He argues that margin compression is a healthy sign of aggressive reinvestment into credit and ads (which grew 73%). He maintains that their credit portfolio quality is actually improving despite market fears.

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