Central banks are still warning about sticky inflation, and that keeps a tight focus on interest rates and cash. In this setting, companies that already generate solid cash flows yet trade below estimated fair value can quietly become tomorrow’s regret for investors who ignore them. This article highlights three stocks from the Undervalued Stocks Based On Cash Flows screener that look especially interesting right now.

The stocks below are just a starting sample from this idea. The full screen surfaced 810 more companies with equally compelling cash flow stories that are not covered here. To go deeper, head straight into the Undervalued Stocks Based On Cash Flows screener to identify and analyze the highest conviction opportunities for your watchlist.

MercadoLibre (MELI)

MercadoLibre is a leading e-commerce and fintech company in Latin America, running its Mercado Libre Marketplace alongside Mercado Pago, a broad financial services platform that processes payments, holds wallet balances, offers investments through Mercado Fondo, and extends credit via Mercado Crédito. The company reports about US$35.2b in revenue from internet software and services, reflecting how commerce, payments, logistics, advertising and classifieds are tightly linked, with Mercado Pago’s recurring cash flows particularly relevant for cash flow based valuation. MercadoLibre’s stock is a large cap with a market value of roughly US$97.5b.

Investors evaluating cash flow focused opportunities may find MercadoLibre notable because Mercado Pago is generating recurring payments, wallet and lending cash flows that can be modeled in a DCF, while the stock is described as trading at an estimated discount to fair value. The trade off is a thinner current profit margin of about 5.3% and a debt heavy funding mix, as management channels cash into areas such as the expanding credit portfolio and AI and logistics investments. The potential value of a stronger, more cash generative ecosystem, assuming fintech cash flows remain durable and funding risk stays contained, is presented as not fully reflected in today’s price.

MercadoLibre’s expanding fintech cash engine and thinner 5.3% margin suggest that headline earnings may not tell the whole story. Put the pieces together with the DCF valuation analysis for MercadoLibre

Build your own cash flow shortlist

MercadoLibre and the two other stocks in this list came from a single screen, but your best ideas will often come from filters tailored to you. Use our Screener to combine valuation, cash flows, balance sheet strength and risks into your own shortlist, or start with any of our curated Investing Ideas.

Merck (MRK)

Merck is a global healthcare company best known for its human health pharmaceuticals, where blockbuster products like cancer drug Keytruda and HPV vaccine Gardasil generate large, recurring cash flows that are central to its inclusion in this cash flow focused screener. In 2024, Merck reported about US$59.6b in pharmaceutical revenue alongside roughly US$6.7b from Animal Health and US$0.3b from other sources, so human medicines are the main economic engine while animal health provides an additional stream. The stock is a mega cap with a market value around US$375.5b.

Investors looking at Merck today see a cash flow story built on current blockbusters plus a fast growing late stage pipeline, helped by the Moderna melanoma vaccine partnership and newer drugs like WINREVAIR and Capvaxive. The catch is that earnings have been volatile, with margins compressed by a large one off loss, high debt and the future loss of exclusivity for Keytruda, so the cash flow path is not entirely smooth. For anyone focused on undervalued cash flow potential, Merck offers a mix of powerful franchises and real execution risk that suggests it may merit closer examination rather than a quick verdict.

Merck’s blockbuster cash flows and late stage pipeline often make the headlines, yet the real story lies in the trade off between that strength and upcoming patent and margin pressures. Get the full picture in the 2 key rewards and 5 important warning signs

Clear Secure (YOU)

Clear Secure runs a secure identity platform under the CLEAR brand that focuses on subscription and service fees linked to identity verification, especially through its CLEAR Plus airport membership. This ties it directly to the cash flow driven theme of this screener. The company generates about US$1.0b from secure biometric identity verification and related services, almost entirely in the United States, and has a market cap of roughly US$6.0b.

Clear Secure interests value focused investors because its membership model and airport identity services produce recurring cash flows that our DCF work suggests are undervalued. Recent free cash flow strength, raised 2026 guidance and growing CLEAR1 and corporate memberships point to a business that can potentially compound cash returns if adoption keeps building. At the same time, softer profit margins, reliance on travel volumes and insider selling, combined with leadership and pricing changes, raise questions about how durable those cash flows will be. The trade off between discounted valuation and these execution and governance risks is what makes Clear Secure worth a closer look for this screener’s audience.

Clear Secure’s recurring membership cash flows and raised 2026 guidance suggest a story investors may not be fully pricing in yet. See how the analysis report for Clear Secure reframes those travel, governance, and pricing questions.

Seeking Alternatives Before The Crowd Moves

Fresh ideas move first and slow research often gets caught chasing momentum after stocks are already flying. Scan these curated lists while it matters and consider acting before the crowd.

• Spot resilient cash generators before sentiment turns and use the 79 resilient stocks with low risk scores to focus on companies where balance sheets and risk scores already look built for shocks.
• Explore interest in real assets by scanning the 31 elite gold producer stocks for producers that combine meaningful scale with balance sheets investors may not be fully watching yet.
• Monitor potential infrastructure demand by assessing the 39 power grid technology and infrastructure stocks and look for companies positioned for grid-related projects while they may still be under the radar.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.