Warren Buffett is known for his careful approach to investing. Part of that strategy is finding undervalued stocks, with the expectation that the market will come to recognize their true worth and reward them accordingly with gains. Yet, Buffett fans tend to pay more attention to some of Berkshire Hathaway's flashier and more exciting holdings and ignore others.

Three excellent holdings that investors may be overlooking right now are Ally Financial (NYSE: ALLY), (NYSE: KR), and Floor Decor (NYSE: FND). All three are underrated Buffett stocks that could lead to formidable shareholder value over the long term.

Ally Bank has only been around since 2010, but that doesn't tell the whole story. It actually got its start as the financial branch of General Motors, and auto loans remain one of its most important segments. However, it has pivoted to offering a completely digital bank, as well as other financial services, and it's now a major player in online banking as the 22nd-largest bank in the U.S. by assets.

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Source Fool.com