Night Owl Report: What’s Warren Buffett’s secret? The truth is, there is no secret. The only thing the legendary investor can be credited with is an uncanny ability to spot companies that would one day become big names at an early enough stage so they could be acquired at a fraction of current valuations.  Of course, this is easier said than done. To find undervalued stocks to buy before their values skyrocket, investors should focus on three main things a company should have: products that stand out, high profit margins, and high rates of return on invested capital (ROIC). Let's take a look at Generac Holdings Inc. .