10 Best Undervalued Smallmid Cap Stocks for January 2026
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Market Overview & Selection Criteria
In the current market environment, small and mid-cap stocks around the $10B market cap range present compelling opportunities for value-focused analysis, particularly those showing strong intrinsic value potential relative to their financial metrics. ValueSense's proprietary screening methodology identifies these 10 best undervalued small-mid cap stock picks by prioritizing high Quality ratings, elevated intrinsic value estimates, robust Free Cash Flow (FCF) generation, and attractive ROIC alongside manageable debt levels. Stocks were selected from the undervalued small-mid cap universe using filters for market caps between $9.6B-$10.3B, positive FCF where possible, revenue growth trends, and Quality ratings above 4.8. This watchlist emphasizes diversification across semiconductors, infrastructure, automotive, logistics, energy, biotech services, retail, diagnostics, airports, and aerospace maintenance sectors, offering educational insights into stock picks with potential margin expansion and growth catalysts.
Featured Stock Analysis
Stock #1: Amkor Technology, Inc. (AMKR)
| Metric | Value |
|---|---|
| Market Cap | $10.3B |
| Quality Rating | 6.3 |
| Intrinsic Value | $94.9 |
| 1Y Return | 65.0% |
| Revenue | $6,449.1M |
| Free Cash Flow | $623.1M |
| Revenue Growth | 0.1% |
| FCF margin | 9.7% |
| Gross margin | 13.5% |
| ROIC | 6.9% |
| Total Debt to Equity | 43.5% |
Investment Thesis
Amkor Technology, Inc. (AMKR) stands out in the semiconductor sector with a Quality rating of 6.3 and an impressive intrinsic value of $94.9, suggesting significant undervaluation for investors analyzing fundamental metrics. The company generates $6,449.1M in revenue and $623.1M in Free Cash Flow, with a solid 9.7% FCF margin and 13.5% gross margin. Despite modest 0.1% revenue growth, its 6.9% ROIC and conservative 43.5% Total Debt to Equity indicate efficient capital use in a capital-intensive industry. Over the past year, AMKR delivered a strong 65.0% 1Y Return, highlighting resilience amid market volatility. This positions AMKR as a key pick in semiconductor stock analysis for those tracking undervalued growth stocks with steady cash flows.
Key Catalysts
- Strong 1Y Return of 65.0% demonstrates market momentum in chip packaging demand.
- Healthy FCF of $623.1M supports potential dividends or buybacks.
- Attractive intrinsic value $94.9 vs. current metrics signals upside potential.
- Balanced Total Debt to Equity 43.5% enables flexibility for expansion.
Risk Factors
- Stagnant revenue growth 0.1% could pressure margins if demand softens.
- Lower gross margin 13.5% exposes vulnerability to input cost inflation.
- Sector cyclicality in semiconductors may amplify short-term volatility.
Stock #2: Dycom Industries, Inc. (DY)
| Metric | Value |
|---|---|
| Market Cap | $10.1B |
| Quality Rating | 6.9 |
| Intrinsic Value | $348.5 |
| 1Y Return | 96.7% |
| Revenue | $5,172.9M |
| Free Cash Flow | $296.8M |
| Revenue Growth | 20.1% |
| FCF margin | 5.7% |
| Gross margin | 19.5% |
| ROIC | 11.9% |
| Total Debt to Equity | 71.8% |
Investment Thesis
Dycom Industries, Inc. (DY), a leader in infrastructure services, earns a Quality rating of 6.9 with an intrinsic value of $348.5, pointing to substantial value in the stock watchlist. With $5,172.9M revenue, $296.8M Free Cash Flow, and 20.1% revenue growth, DY showcases robust expansion. Its 5.7% FCF margin, 19.5% gross margin, 11.9% ROIC, and $10.1B market cap underline operational strength, bolstered by a 96.7% 1Y Return. At 71.8% Total Debt to Equity, the balance sheet supports growth in telecom and broadband infrastructure, making DY a standout for infrastructure stock picks.
Key Catalysts
- Exceptional 96.7% 1Y Return reflects surging infrastructure spending.
- Double-digit revenue growth 20.1% driven by network buildouts.
- High ROIC 11.9% indicates efficient project execution.
- Elevated intrinsic value $348.5 offers long-term appreciation potential.
Risk Factors
- Elevated Total Debt to Equity 71.8% could strain during economic slowdowns.
- Modest FCF margin 5.7% limits immediate shareholder returns.
- Dependency on government contracts may introduce execution risks.
Stock #3: BorgWarner Inc. (BWA)
| Metric | Value |
|---|---|
| Market Cap | $9,962.2M |
| Quality Rating | 5.7 |
| Intrinsic Value | $49.0 |
| 1Y Return | 49.5% |
| Revenue | $14.2B |
| Free Cash Flow | $1,568.0M |
| Revenue Growth | 0.1% |
| FCF margin | 11.1% |
| Gross margin | 18.5% |
| ROIC | 2.3% |
| Total Debt to Equity | 63.4% |
Investment Thesis
BorgWarner Inc. (BWA) in the automotive sector features a Quality rating of 5.7 and intrinsic value of $49.0, appealing for automotive stock analysis. Generating $14.2B revenue and a robust $1,568.0M Free Cash Flow (11.1% FCF margin), alongside 18.5% gross margin and 49.5% 1Y Return, BWA demonstrates scale. Flat 0.1% revenue growth is offset by 2.3% ROIC and 63.4% Total Debt to Equity at a $9,962.2M market cap, positioning it as a value play in electrification transitions.
Key Catalysts
- Strong FCF generation $1,568.0M funds EV component investments.
- Solid 49.5% 1Y Return amid auto sector recovery.
- Scale from $14.2B revenue provides competitive moat.
- Intrinsic value $49.0 suggests undervaluation in transition markets.
Risk Factors
- Low ROIC 2.3% signals capital efficiency challenges.
- Stagnant revenue growth 0.1% risks obsolescence in EVs.
- Moderate debt 63.4% vulnerable to interest rate hikes.
Stock #4: U-Haul Holding Company (UHAL)
| Metric | Value |
|---|---|
| Market Cap | $9,933.3M |
| Quality Rating | 5.9 |
| Intrinsic Value | $51.1 |
| 1Y Return | -26.7% |
| Revenue | $5,972.5M |
| Free Cash Flow | $3,348.6M |
| Revenue Growth | 4.3% |
| FCF margin | 56.1% |
| Gross margin | 46.8% |
| ROIC | 3.6% |
| Total Debt to Equity | 99.6% |
Investment Thesis
U-Haul Holding Company (UHAL) offers a Quality rating of 5.9 and intrinsic value of $51.1, with standout $3,348.6M Free Cash Flow (56.1% FCF margin) from $5,972.5M revenue. High 46.8% gross margin and 4.3% revenue growth shine, despite -26.7% 1Y Return and 3.6% ROIC. At 99.6% Total Debt to Equity and $9,933.3M market cap, UHAL's logistics model provides defensive cash flows for value stock portfolios.
Key Catalysts
- Exceptional FCF margin 56.1% and absolute FCF $3,348.6M for reinvestment.
- High gross margin 46.8% from asset-light operations.
- Steady revenue growth 4.3% in essential moving services.
- Intrinsic value $51.1 indicates recovery potential.
Risk Factors
- Negative 1Y Return -26.7% reflects recent underperformance.
- High Total Debt to Equity 99.6% heightens leverage risk.
- Low ROIC 3.6% questions capital returns.
Stock #5: Permian Resources Corporation (PR)
| Metric | Value |
|---|---|
| Market Cap | $9,890.0M |
| Quality Rating | 6.5 |
| Intrinsic Value | $21.9 |
| 1Y Return | -2.0% |
| Revenue | $5,191.9M |
| Free Cash Flow | $3,033.6M |
| Revenue Growth | 7.6% |
| FCF margin | 58.4% |
| Gross margin | 41.3% |
| ROIC | 16.2% |
| Total Debt to Equity | 32.7% |
Investment Thesis
Permian Resources Corporation (PR) in energy boasts a Quality rating of 6.5 and intrinsic value of $21.9, with $3,033.6M Free Cash Flow (58.4% FCF margin) from $5,191.9M revenue. Strong 41.3% gross margin, 7.6% revenue growth, 16.2% ROIC, and low 32.7% Total Debt to Equity at $9,890.0M market cap make it a top energy stock pick, despite -2.0% 1Y Return.
Key Catalysts
- Outstanding FCF margin 58.4% and ROIC 16.2% in oil production.
- Positive revenue growth 7.6% from Permian basin assets.
- Low debt 32.7% supports drilling expansion.
- Intrinsic value $21.9 for commodity upcycles.
Risk Factors
- Mild 1Y Return decline -2.0% tied to oil price swings.
- Commodity exposure risks revenue volatility.
- Growth dependent on energy demand trends.
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Stock #6: Charles River Laboratories International, Inc. (CRL)
| Metric | Value |
|---|---|
| Market Cap | $9,880.9M |
| Quality Rating | 4.9 |
| Intrinsic Value | $360.5 |
| 1Y Return | 10.8% |
| Revenue | $4,023.7M |
| Free Cash Flow | $543.7M |
| Revenue Growth | (0.9%) |
| FCF margin | 13.5% |
| Gross margin | 32.3% |
| ROIC | 1.3% |
| Total Debt to Equity | 76.2% |
Investment Thesis
Charles River Laboratories International, Inc. (CRL) in healthcare services has a Quality rating of 4.9 and high intrinsic value of $360.5. With $4,023.7M revenue, $543.7M Free Cash Flow (13.5% margin), 32.3% gross margin, and 10.8% 1Y Return, it shows stability despite -0.9% revenue growth and low 1.3% ROIC. 76.2% Total Debt to Equity at $9,880.9M market cap suits healthcare stock analysis.
Key Catalysts
- Elevated intrinsic value $360.5 in drug development services.
- Healthy gross margin 32.3% and FCF $543.7M.
- Positive 1Y Return 10.8% amid biotech demand.
- Sector tailwinds from R&D pipelines.
Risk Factors
- Negative revenue growth -0.9% signals demand softness.
- Low ROIC 1.3% indicates inefficiency.
- Debt levels 76.2% pressure in high-rate environments.
Stock #7: Albertsons Companies, Inc. (ACI)
| Metric | Value |
|---|---|
| Market Cap | $9,800.1M |
| Quality Rating | 4.8 |
| Intrinsic Value | $36.3 |
| 1Y Return | -11.3% |
| Revenue | $81.4B |
| Free Cash Flow | $497.4M |
| Revenue Growth | 2.1% |
| FCF margin | 0.6% |
| Gross margin | 27.3% |
| ROIC | 6.3% |
| Total Debt to Equity | 496.7% |
Investment Thesis
Albertsons Companies, Inc. (ACI), a grocery retailer, scores 4.8 Quality rating with intrinsic value of $36.3. Massive $81.4B revenue pairs with $497.4M Free Cash Flow (0.6% margin), 2.1% revenue growth, 27.3% gross margin, and 6.3% ROIC, offset by -11.3% 1Y Return and high 496.7% Total Debt to Equity at $9,800.1M market cap.
Key Catalysts
- Scale from $81.4B revenue in defensive grocery sector.
- Improving revenue growth 2.1% and ROIC 6.3%.
- Stable gross margin 27.3% supports essentials demand.
- Intrinsic value $36.3 for merger arbitrage plays.
Risk Factors
- Low FCF margin 0.6% limits flexibility.
- Extreme Total Debt to Equity 496.7% risks restructuring.
- Negative 1Y Return -11.3% from competitive pressures.
Stock #8: Qiagen N.V. (QGEN)
| Metric | Value |
|---|---|
| Market Cap | $9,783.1M |
| Quality Rating | 6.7 |
| Intrinsic Value | $62.5 |
| 1Y Return | 1.6% |
| Revenue | $2,070.8M |
| Free Cash Flow | $359.3M |
| Revenue Growth | 5.3% |
| FCF margin | 17.3% |
| Gross margin | 63.9% |
| ROIC | 8.8% |
| Total Debt to Equity | 0.0% |
Investment Thesis
Qiagen N.V. (QGEN) in diagnostics achieves 6.7 Quality rating and intrinsic value of $62.5. $2,070.8M revenue yields $359.3M Free Cash Flow (17.3% margin), 5.3% revenue growth, 63.9% gross margin, 8.8% ROIC, and 1.6% 1Y Return, with zero Total Debt to Equity at $9,783.1M market cap—ideal for biotech value stocks.
Key Catalysts
- Debt-free balance sheet (0.0% Total Debt to Equity).
- High gross margin 63.9% from IP-protected tech.
- Steady revenue growth 5.3% in genomics.
- Strong Quality rating 6.7 and ROIC 8.8%.
Risk Factors
- Modest 1Y Return 1.6% lags peers.
- Niche market risks innovation competition.
- FCF scale smaller vs. revenue base.
Stock #9: Grupo Aeroportuario del Sureste, S. A. B. de C. V. (ASR)
| Metric | Value |
|---|---|
| Market Cap | $9,778.2M |
| Quality Rating | 7.2 |
| Intrinsic Value | $555.0 |
| 1Y Return | 24.7% |
| Revenue | MX$35.3B |
| Free Cash Flow | MX$9,176.2M |
| Revenue Growth | 20.9% |
| FCF margin | 26.0% |
| Gross margin | 71.4% |
| ROIC | 22.1% |
| Total Debt to Equity | 48.1% |
Investment Thesis
Grupo Aeroportuario del Sureste, S. A. B. de C. V. (ASR) tops with 7.2 Quality rating and intrinsic value of $555.0. MX$35.3B revenue and MX$9,176.2M Free Cash Flow (26.0% margin) drive 20.9% revenue growth, 71.4% gross margin, 22.1% ROIC, and 24.7% 1Y Return at 48.1% Total Debt to Equity and $9,778.2M market cap.
Key Catalysts
- Highest Quality rating 7.2 and ROIC 22.1%.
- Explosive revenue growth 20.9% from travel recovery.
- Exceptional gross margin 71.4% in oligopoly airports.
- Strong 1Y Return 24.7% with high intrinsic value.
Risk Factors
- Currency exposure (MX$) to peso fluctuations.
- Travel sector cyclicality post-pandemic.
- Moderate debt 48.1% in capex-heavy business.
Stock #10: StandardAero, Inc. (SARO)
| Metric | Value |
|---|---|
| Market Cap | $9,626.7M |
| Quality Rating | 5.0 |
| Intrinsic Value | $34.6 |
| 1Y Return | 20.8% |
| Revenue | $5,872.1M |
| Free Cash Flow | ($42.6M) |
| Revenue Growth | 17.8% |
| FCF margin | (0.7%) |
| Gross margin | 14.1% |
| ROIC | 9.3% |
| Total Debt to Equity | 99.1% |
Investment Thesis
StandardAero, Inc. (SARO) in aerospace maintenance has 5.0 Quality rating and intrinsic value of $34.6. $5,872.1M revenue shows 17.8% revenue growth and 20.8% 1Y Return, with 14.1% gross margin and 9.3% ROIC, but negative $42.6M Free Cash Flow (-0.7% margin) and 99.1% Total Debt to Equity at $9,626.7M market cap.
Key Catalysts
- Rapid revenue growth 17.8% in aviation aftermarket.
- Positive 1Y Return 20.8% from fleet expansions.
- Solid ROIC 9.3% despite FCF challenges.
- Intrinsic value $34.6 for recovery narrative.
Risk Factors
- Negative Free Cash Flow -$42.6M signals cash burn.
- High Total Debt to Equity 99.1% amid growth.
- Thin gross margin 14.1% vulnerable to supply issues.
Portfolio Diversification Insights
These 10 best stock picks create a balanced stock watchlist with sector allocation: semiconductors (AMKR 10%), infrastructure (DY 10%), automotive (BWA 10%), logistics (UHAL 10%), energy (PR 10%), healthcare (CRL 10%), retail (ACI 10%), diagnostics (QGEN 10%), airports (ASR 10%), and aerospace (SARO 10%). High-FCF names like UHAL, PR, and ASR (avg. 46.8% FCF margins) complement growth stories (DY, ASR at 20%+ revenue growth), while debt-free QGEN hedges leveraged plays (ACI, UHAL). Cross-references include infrastructure synergies (DY-UHAL), energy-commodities (PR), and aviation (ASR-SARO). Quality ratings average 6.0, with ROIC leaders (ASR 22.1%, PR 16.2%) offsetting lower ones (CRL 1.3%), promoting risk-adjusted portfolio diversification across cycles.
Market Timing & Entry Strategies
Consider entry during sector rotations favoring small-mid caps, such as post-earnings beats or when intrinsic values exceed current prices by 20%+ (e.g., DY at $348.5, ASR at $555.0). Monitor revenue growth accelerations (DY 20.1%, ASR 20.9%) and FCF inflection points (SARO's negative to positive). Use dollar-cost averaging for volatile picks like PR amid commodity dips, or wait for debt reductions in high-leverage names (ACI, UHAL). Track 1Y Returns for momentum (DY 96.7%) vs. laggards (UHAL -26.7%) signaling rebounds, aligning with ValueSense screeners for undervalued stocks to buy.
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FAQ Section
How were these stocks selected?
These 10 best undervalued small-mid cap stock picks were filtered using ValueSense criteria focusing on ~$10B market caps, Quality ratings 4.8+, strong intrinsic values, FCF generation, and sector diversity for comprehensive stock watchlist analysis.
What's the best stock from this list?
ASR leads with the highest Quality rating 7.2, 22.1% ROIC, 20.9% revenue growth, and 24.7% 1Y Return, making it a top performer in this undervalued stocks collection based on metrics.
Should I buy all these stocks or diversify?
Diversification across 10 sectors reduces concentration risk; allocate based on Quality ratings and catalysts rather than buying all, using this as educational investment opportunities framework.
What are the biggest risks with these picks?
Key concerns include high debt (ACI 496.7%, UHAL 99.6%), negative FCF (SARO), stagnant growth (AMKR, BWA), and sector cyclicality (energy PR, aviation SARO/ASR).
When is the best time to invest in these stocks?
Optimal timing aligns with intrinsic value discounts widening, positive revenue growth momentum (e.g., DY, ASR), or FCF improvements, monitored via ValueSense tools for stock picks entry points.