Everybody likes a deal. Whether it's clothes, electronics, or cars, people prefer to take advantage of a bargain whenever possible. The same goes for stocks -- finding undervalued companies can pay off hugely for investors because they offer high return potential.

Investing in undervalued stocks has a handful of benefits, but most notably, it offers a greater margin of safety since stocks only need to reach their intrinsic value for investors to profit. Investors can use many different metrics to analyze stocks and their valuations, but here are two of the most important ones.

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Source Fool.com