3 Undervalued Stocks You've Never Heard Of: August 2024

Core Insights - Investing in undervalued stocks can yield substantial returns by evaluating fundamental strengths, industry positioning, and growth potential [1] Industry Insights - The insurance sector has shown resilience and growth, providing stability and steady returns due to essential services and financial robustness [2] - The professional services sector, particularly executive search and recruitment, thrives during economic downturns as businesses seek top talent, indicating high profitability and operational efficiency [3] - The regional banking sector presents compelling opportunities, especially for institutions with high net interest margins despite increased costs, showcasing effective management in a rising interest rate environment [4] Company Insights - NMI Holdings (NMIH): Specializes in insurance with a record-high insurance coverage of $203.5 billion, marking a 2.1% sequential growth and a 6.4% annual increase in insurance in force [5][6] - NMI Holdings' credit performance improved with a default rate of 0.76% and a loss ratio of 0.2%, indicating strong financial health [6] - Heidrick & Struggles International (HSII): Focuses on executive search and consulting, reporting an adjusted EBITDA of $28.8 million for Q2 2024, with a margin of 10.3%, impacted by nonrecurring expenses [7][8] - The Executive Search segment maintained a robust adjusted EBITDA of $52.7 million with a margin of 25.1%, reflecting solid performance [8] - TFS Financial (TFSL): Operates in regional banking, reporting a net interest income decrease of $2.1 million, or 3%, for Q3 fiscal 2024, attributed to rising costs of interest-bearing liabilities [9][10] - Despite a slight decline in net interest margin to 1.67%, TFS Financial maintains a high margin, demonstrating resilience in a challenging interest rate environment [10][11]