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Commentary ● August 12

Identifying Undervalued Stocks Through Free Cash Flow

Michael Rose

This week, we present AAII’s strategy that explores the basics of cash flow analysis and the implementation of a price-to-free-cash-flow (P/FCF) screen. Low price-to-free-cash-flow ratios may represent neglected firms trading at attractive prices. Our screen looks for companies with a price-to-free-cash-flow ratio below the median for their industry and below their own five-year average. The AAII Price-to-Free-Cash-Flow screen has shown impressive long-term performance, with an average annual gain of 16.7% since inception in 1998, versus the S&P 500 index’s 7.5% return over the same period. Year to date, the Price-to-Free-Cash-Flow screen has returned 24.1%, compared to the S&P 500’s 9.5% return.

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Ranked P/B Ratio as of 8/18/2026

COMPANY NAME	TICKER	P/B RATIO
LanzaTech Global, Inc.	LNZA	0.31
Regis Corporation	RGS	0.36
Imperial Petroleum Inc.	IMPP	0.42
StealthGas Inc.	GASS	0.52
Pyxis Tankers Inc.	PXS	0.55

See All 21 Stocks

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Stock Superstars Report Portfolio

Approach: David Dreman

David Dreman is the chairman and founder of Dreman Value Management. Over the past 30 years, he has been at the forefront of research into contrarian value investing and behavioral finance. This research has led to five books on the topic. These works include Dreman's most recent book, Contrarian Investment Strategies: The Psychological Edge, which was published on January 12, 2012 by Simon & Schuster. Additionally, he is a senior columnist for Forbes, where he has been writing a regularly published column, titled "The Contrarian," for over 30 years.

Top SSR Watchlist Ideas Ranked by Trailing P/E (as of 8/18/2026)

COMPANY NAME	TICKER	TRAILING P/E
First American Financial Corporation	FAF	10.0
East West Bancorp, Inc.	EWBC	13.0
M&T Bank Corporation	MTB	13.3
United Bankshares, Inc.	UBSI	13.3
The PNC Financial Services Group, Inc.	PNC	14.0

See All 7 Stocks

A+ Stock Grades

Stocks with grades of B or better across all quant factors as of 8/18/2026.

Top Graded Stocks (43) Bottom Graded Stocks (47)


COMPANY NAME	TICKER	VALUE		GROWTH		MOMENTUM		EPS REV		QUALITY		SECTOR
COMPANY NAME	TICKER	Score	Grade	Score	Grade	Score	Grade	Score	Grade	Score	Grade	SECTOR
AerCap Holdings N.V.	AER	84	A	89	A	64	B	81	A	90	A	Industrials
Centene Corporation	CNC	93	A	89	A	87	A	84	A	71	B	Health Care
CONMED Corporation	CNMD	68	B	100	A	62	B	82	A	90	A	Health Care
Crawford & Company	CRD.A	70	B	73	B	74	B	84	A	94	A	Financials
Constellium SE	CSTM	81	A	77	B	82	A	91	A	85	A	Materials

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COMPANY NAME	TICKER	VALUE		GROWTH		MOMENTUM		EPS REV		QUALITY		SECTOR
COMPANY NAME	TICKER	Score	Grade	Score	Grade	Score	Grade	Score	Grade	Score	Grade	SECTOR
Alvotech	ALVO	26	D	18	F	18	F	15	F	29	D	Health Care
American Superconductor Corporation	AMSC	26	D	27	D	14	F	31	D	24	D	Industrials
Ardelyx, Inc.	ARDX	22	D	29	D	14	F	8	F	35	D	Health Care
Ares Management Corporation	ARES	10	F	26	D	31	D	29	D	15	F	Financials
AeroVironment, Inc.	AVAV	14	F	33	D	29	D	40	D	13	F	Industrials

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Stock Upgrades & Downgrades

Stocks with at least two upgrades or downgrades across all quant factors. Data as of 8/18/2026, compared to previous trading day.

Upgrades (20) Downgrades (11)

COMPANY NAME	TICKER	VALUE	GROWTH	MOMENTUM	EPS REV	QUALITY	SECTOR
ACV Auctions Inc.	ACVA	D ▲	D ▲	C ▲	C ▲	C ▲	Industrials
Assembly Biosciences, Inc.	ASMB	F ▲	F ▲	B ▲	B ▲	D ▲	Health Care
Bausch Health Companies Inc.	BHC	A ▲	C ▲	C ▲	C ▲	B ▲	Health Care
Brookfield Infrastructure Corporation	BIPC	A ▲	B ▲	D ▲	F ▲	C ▲	Utilities
Big Sky Industrial Inc.	BSIN	F ▲	F ▲	A ▲	B ▲	D ▲	Energy

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COMPANY NAME	TICKER	VALUE	GROWTH	MOMENTUM	EPS REV	QUALITY	SECTOR
Agilysys, Inc.	AGYS	F ▲	A ▲	B ▼	C ▼	A ▲	Information Technology
Amer Sports, Inc.	AS	F ▼	D ▲	D ▲	C ▼	A ▲	Consumer Discretionary
BrainsWay Ltd.	BWAY	F ▲	D ▼	A ▲	D ▼	C ▲	Health Care
Clene Inc.	CLNN	NA ▲	F ▲	C ▼	D ▼	F ▲	Health Care
Carvana Co.	CVNA	F ▲	D ▲	D ▼	D ▼	C ▲	Consumer Discretionary

See All 11 Stocks

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