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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% |
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.
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%