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3 ASX Stocks Estimated To Be Up To 22.1% Below Intrinsic Value

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Over the last 7 days, the Australian market has remained flat, but it has risen 8.0% over the past 12 months with earnings expected to grow by 13% per annum over the next few years. In this context, identifying undervalued stocks can be crucial for investors looking to capitalize on potential gains while navigating a relatively stable yet promising market environment.

Top 10 Undervalued Stocks Based On Cash Flows In Australia

Name

Current Price

Fair Value (Est)

Discount (Est)

Regal Partners (ASX:RPL)

A$3.25

A$6.36

48.9%

Shine Justice (ASX:SHJ)

A$0.70

A$1.32

46.9%

Nanosonics (ASX:NAN)

A$2.99

A$5.85

48.9%

Infomedia (ASX:IFM)

A$1.62

A$3.07

47.2%

HMC Capital (ASX:HMC)

A$7.50

A$13.79

45.6%

Millennium Services Group (ASX:MIL)

A$1.145

A$2.24

48.9%

Life360 (ASX:360)

A$15.17

A$28.27

46.3%

Lovisa Holdings (ASX:LOV)

A$30.94

A$57.21

45.9%

Little Green Pharma (ASX:LGP)

A$0.097

A$0.17

42.7%

Sandfire Resources (ASX:SFR)

A$8.42

A$16.79

49.8%

Click here to see the full list of 37 stocks from our Undervalued ASX Stocks Based On Cash Flows screener.

Let's dive into some prime choices out of the screener.

Aussie Broadband

Overview: Aussie Broadband Limited (ASX:ABB) offers telecommunications services to residential and business customers in Australia, with a market cap of A$883.60 million.

Operations: Aussie Broadband's revenue segments include Business (A$94.21 million), Wholesale (A$125.25 million), Residential (A$549.59 million), and Enterprise and Government (A$85.85 million).

Estimated Discount To Fair Value: 10.4%

Aussie Broadband appears undervalued based on discounted cash flow analysis, trading at A$2.99 against a fair value estimate of A$3.34. Despite recent shareholder dilution, the company’s earnings grew by 83.8% last year and are forecasted to grow 23.69% annually over the next three years, outpacing the Australian market's growth rate. Recent activities include a $120 million equity raise for acquisitions or further investments in its fibre assets and residential revenue streams remaining dominant.

ASX:ABB Discounted Cash Flow as at Aug 2024
ASX:ABB Discounted Cash Flow as at Aug 2024

Navigator Global Investments

Overview: Navigator Global Investments (ASX:NGI), formerly HFA Holdings Limited, operates as a fund management company in Australia with a market cap of A$816.04 million.

Operations: Navigator Global Investments generates revenue primarily from its Lighthouse segment, which accounts for $120.49 million.

Estimated Discount To Fair Value: 22.1%