10 perfectly rated stocks trading dirt cheap this July

2026-07-07 · By Lubin Danilo, founder of Lubin Investment

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10 companies currently pass every quality criterion in my screener AND trade below 5 years of their annual free cash flow: Futu Holdings, Yuanbao, Grupo Aeroportuario Centro Norte, Afya, Universal Insurance, RenaissanceRe, Collegium Pharmaceutical, SkyWest, Mercury General, and Selective Insurance. A good score is never enough on its own: the price has to follow.

Key takeaways

• 10 companies in my screener pass every one of my financial quality criteria AND trade below 5 times their annual free cash flow.
• The insurance sector dominates this list (4 out of 10 names), a pattern that keeps recurring since I started tracking this monthly ranking.
• The cheapest name on the list (Futu Holdings, valued at under a third of a year of cash) doesn't mean it's the best deal: you always need to understand why the market is skeptical.
• This list changes every month: some companies drop off once their share price recovers, others enter when the market sells them off for no fundamental reason.

Why I recalculate this list every month

My screener judges every company on two separate axes: the quality of its business (ten concrete financial criteria, like profitability, cash growth, or debt discipline) and its price (the P/FCF, meaning the share price divided by the free cash flow it generates each year). A P/FCF of 5 means you are paying today for the equivalent of 5 years of that cash. Lower generally means cheaper, all else equal.

The intersection of the two, maximum quality and among the lowest prices in the market, is rare. That's exactly what this list tracks every month: companies that check every financial box but that the market treats as if something were wrong.

Insurance, still the king of this list

Four of the ten companies come from P&C insurance or reinsurance: Universal Insurance, RenaissanceRe, Mercury General, and Selective Insurance. That's no accident. These are cyclical businesses exposed to natural catastrophes, which regularly pushes the market to price them with skepticism even when their underwriting discipline stays excellent. I've already covered RenaissanceRe (RNR) on my site: a Bermuda-based reinsurer that insures other insurers against major catastrophes, with a maximum quality score.

The Futu Holdings case: the cheapest, not necessarily the best deal

Futu Holdings, the Hong Kong-based online broker, trades at barely over four months of its annual cash flow. That's the lowest price on the entire list. But an extremely low price is never free: the market is pricing in a real geopolitical and regulatory risk specific to Chinese and Hong Kong companies listed abroad (capital restrictions, regulatory tension, delisting risk). The same caution applies to Yuanbao, the Chinese online insurer right behind it on the list.

How I actually use this list

This list is not a bundled buy recommendation. It's a starting point for further digging: every name deserves an understanding of why the market is avoiding it before concluding it's a good deal. A low price can hide a real risk (regulatory, geographic, cyclical) or, on the contrary, simple market neglect of a company too small or too obscure to attract attention. Quality, measured by my ten criteria, already screens out fragile businesses. What remains is judging, company by company, whether the price compensates for a real risk or is simply excessive.

What changed since June

Compared with my mid-June ranking, the makeup of this list has shifted: some names dropped off as their share price recovered, others joined as the market kept punishing entire sectors (insurance, regional aviation) with no fundamental change in their results. That's the main point of recalculating this ranking every month rather than freezing it once and for all.

FAQ

What is the P/FCF used to build this ranking?

The share price divided by the free cash flow it generates each year. A P/FCF of 5 means you are paying today for the equivalent of 5 years of that cash.

Why does insurance dominate this list so much?

These are cyclical businesses exposed to natural catastrophes, which the market often prices with skepticism even when the company's underwriting discipline stays excellent.

Is a very low price like Futu Holdings' always a good deal?

No. An extremely low price usually prices in a real risk: here, a geopolitical and regulatory risk specific to Chinese and Hong Kong companies listed abroad.

Is this list a buy recommendation?

No, it's a starting point for further research on each name. Every company deserves individual analysis to understand why the market is pricing it that way.

How often is this list updated?

I recalculate it every month using real data from my screener, which tracks more than 5,000 stocks worldwide.

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About the author

Written by Lubin Danilo, founder of Lubin Investment. A self-taught individual investor, I find fundamental analysis fascinating, and it has delivered excellent results. For three years now, my performance has beaten the S&P 500. But analyzing every stock took too much time: sites with incomplete data, calculation methods and criteria never aligned with mine. And spotting the best stocks was just as time-consuming, even with my own well-defined checklist. So I put my software development background to work to build this software, base my investment strategy on its results, and share it with people who share the same passion as me. It judges a company's quality and its price separately, using criteria drawn from the financial literature (Warren Buffett, Michael Mauboussin, Aswath Damodaran).