Investors are rethinking risk as central banks keep 10Y bond yields high in key markets, which puts more focus on what a company’s cash flows are really worth. When money is no longer close to free, stocks with strong cash flow potential that trade below their SWS DCF fair value can stand out. This article highlights three stocks from the Undervalued Stocks Based On Cash Flows screener that fit that profile.

The three stocks below are just a sample, since the full screen surfaced 789 more companies with equally interesting cash flow stories that are not covered here. To identify and analyze ideas that best fit your style, head straight into the Undervalued Stocks Based On Cash Flows screener.

Reddit (RDDT)

Reddit runs a global online forum platform where users gather in interest based communities to share posts, comment, trade tips, and build niche groups around almost any topic. The company generates all of its roughly US$2.8b in revenue from its core Internet Information Providers segment, which includes advertising and related services across its communities. With a market cap of about US$34.3b, Reddit is a large, established player in social media style discussion platforms.

Reddit appears on this cash flow focused screen because it combines reported rapid growth, high margins, and ongoing debate around its future. Earnings growth in the last year was very large and profitability improved, yet the stock is still priced below some intrinsic value estimates after a sharp pullback that has been linked to concerns over search traffic and AI data licensing negotiations with Google and OpenAI. Reddit is scheduled to join the S&P 500 on 18 August 2026, which is expected to bring in index fund demand, and management has indicated a focus on higher quality ad products and AI tools. Investors weighing these factors against traffic volatility and dependency on external data deals may see Reddit as a case where sentiment and fundamentals are being closely compared.

Reddit’s mix of rapid growth, high margins, and a sharp pullback has many investors guessing what the cash flow story really implies for valuation. Get the fuller picture with the DCF valuation analysis for Reddit

Build your own cash flow shortlist around Reddit style ideas

Reddit and the two other stocks in this article are all examples surfaced by a single screener, but the real value comes from creating filters that match your own approach. Use our customisable Screener to combine valuation, growth, balance sheet and risk filters, or tap into any of our curated Investing Ideas for ready made starting points.

MasTec (MTZ)

MasTec is a large US infrastructure engineering and construction company that designs, builds, and maintains critical assets for communications networks, power grids, pipelines, renewable energy, and heavy civil projects. It generates most of its roughly US$16.1b in revenue from Clean Energy and Infrastructure (about US$5.6b) and Power Delivery (about US$4.5b), followed by Communications (about US$3.5b) and Pipeline Infrastructure (about US$2.6b). The stock has a market cap of around US$23.6b, which puts MasTec firmly in the large cap infrastructure space.

MasTec has caught investor attention because its record US$21.4b backlog in areas like grid upgrades, renewables, and data center power is paired with a long history of working on complex utility and energy projects. Earnings growth was very strong last year, and analysts expect both revenue and profit to increase at healthy double digit rates, yet the stock is flagged as trading below Simply Wall St’s estimate of fair value. The catch is that this growth story relies on heavy investment, higher debt, and a concentrated set of big customers, so delays or policy shifts could hit margins just as new capacity ramps. For investors who can handle that trade off, MasTec’s mix of scale, sector exposure, and cash flow potential is worth a closer look.

MasTec’s accelerating backlog and cash flow potential sit beside higher debt and customer concentration that many investors may be glossing over. Get the full story in the 4 key rewards and 2 important warning signs

Nu Holdings (NU)

Nu Holdings runs a mobile first digital bank across Brazil, Mexico, Colombia and a few smaller markets, offering cards, accounts, loans, insurance, crypto trading and travel and mobile phone services through a single app. Almost all of its roughly US$8.4b in revenue comes from banking activities and the stock is valued at about US$73.6b, which puts Nu among the larger listed financial institutions in the Americas.

Nu Holdings has caught investor attention because it combines very fast customer growth with strong profitability, including recent “high quality earnings” and a 27.2% return on equity, while still trading below one DCF estimate of fair value. At the same time, credit quality is a key area to monitor, with bad loans at 8.6% and expansion in Mexico and Colombia adding complexity. For investors who want exposure to Latin American banking disruption in a single stock, the mix of record earnings, new banking licenses and an active buyback program makes Nu Holdings a company that some may consider studying in more detail.

Nu Holdings combines rapid customer growth with strong profitability that many investors still might not have fully priced into their expectations. Get the full earnings, credit quality and expansion picture in the analysis report for Nu Holdings

Seeking Fresh Alternatives Before They Fly

New ideas can move from quiet accumulation to breakout momentum quickly. Before these fresh stock themes stop flying under the radar, check them while it matters and consider them early.

• Spot under the radar growth potential before momentum headlines arrive by reviewing the curated 19 high quality undiscovered gems that screens for quality first.
• Boost income research with a focused set of high yield opportunities by scanning the curated 10 dividend fortresses built for investors who care about durability as much as payout size.
• Review potential infrastructure-related ideas by checking the hand picked 40 power grid technology and infrastructure stocks that focuses on companies tied to grid upgrades and electrification trends.

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.