My favourite altcoin is SLM (Slimcoin), and yes, I think it's undervalued.

Why I'm thinking so? Because it features a really interesting innovation (Proof-of-burn, see http://en.bitcoin.it/wiki/Proof_of_burn) and is the first/only one using this concept. The low value was justified in the beginnings of the coin because the code was buggy, but now all major problems have been solved. There should be no barriers to adoption now.