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As the Australian market wraps up 2024 with a two-day decline, the ASX has seen most sectors retreat into negative territory, marking a year-end characterized by profit-taking and sectoral losses. In this environment of fluctuating indices and cautious investor sentiment, identifying undervalued stocks becomes crucial for those seeking potential opportunities amidst broader market volatility.
Top 10 Undervalued Stocks Based On Cash Flows In Australia
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Data#3 (ASX:DTL) | A$6.39 | A$12.30 | 48% |
| SKS Technologies Group (ASX:SKS) | A$1.945 | A$3.85 | 49.4% |
| Atlas Arteria (ASX:ALX) | A$4.75 | A$9.54 | 50.2% |
| Charter Hall Group (ASX:CHC) | A$14.35 | A$28.70 | 50% |
| Cettire (ASX:CTT) | A$1.51 | A$3.02 | 49.9% |
| Telix Pharmaceuticals (ASX:TLX) | A$24.61 | A$46.58 | 47.2% |
| Ansell (ASX:ANN) | A$33.82 | A$60.33 | 43.9% |
| Genesis Minerals (ASX:GMD) | A$2.47 | A$4.90 | 49.6% |
| Millennium Services Group (ASX:MIL) | A$1.145 | A$2.24 | 48.9% |
| Syrah Resources (ASX:SYR) | A$0.205 | A$0.37 | 44.1% |
We're going to check out a few of the best picks from our screener tool.
Atlas Arteria
Overview: Atlas Arteria Limited owns, develops, and operates toll roads with a market cap of A$6.89 billion.
Operations: The company's revenue segments include APRR with A$1.70 billion, ADELAC at A$36.90 million, Warnow Tunnel generating A$25.10 million, Chicago Skyway contributing A$128.90 million, and Dulles Greenway bringing in A$115 million.
Estimated Discount To Fair Value: 50.2%
Atlas Arteria is trading at A$4.83, significantly below its estimated fair value of A$9.64, highlighting potential undervaluation based on cash flows. Despite a forecasted low return on equity of 8.2% in three years, the company expects robust earnings growth at 22.31% annually, outpacing the Australian market's 12.6%. Recent board changes and increased toll revenue further underscore operational adjustments and growth prospects, though its dividend yield of 8.28% lacks coverage by earnings or free cash flow.
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The growth report we've compiled suggests that Atlas Arteria's future prospects could be on the up.
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Delve into the full analysis health report here for a deeper understanding of Atlas Arteria.
Megaport
Overview: Megaport Limited offers on-demand interconnection and internet exchange services to enterprises and service providers across various regions including Australia, New Zealand, Asia, North America, and Europe, with a market cap of A$1.18 billion.
Operations: The company's revenue is derived from three main geographical segments: Europe (A$31.88 million), Asia-Pacific (A$52.58 million), and North America (A$110.81 million).