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As the Australian stock market wraps up a turbulent year, the ASX closed slightly down on its penultimate trading day of 2024, with only Energy and Healthcare sectors showing notable gains amidst widespread declines. In such a fluctuating environment, identifying stocks that are trading below their fair value can offer potential opportunities for investors seeking to capitalize on undervalued assets.
Top 10 Undervalued Stocks Based On Cash Flows In Australia
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Data#3 (ASX:DTL) | A$6.40 | A$12.29 | 47.9% |
| SKS Technologies Group (ASX:SKS) | A$1.935 | A$3.85 | 49.7% |
| Telix Pharmaceuticals (ASX:TLX) | A$24.67 | A$44.00 | 43.9% |
| Cettire (ASX:CTT) | A$1.51 | A$3.02 | 49.9% |
| Charter Hall Group (ASX:CHC) | A$14.63 | A$28.84 | 49.3% |
| Ansell (ASX:ANN) | A$33.78 | A$60.30 | 44% |
| Ingenia Communities Group (ASX:INA) | A$4.69 | A$9.24 | 49.2% |
| Millennium Services Group (ASX:MIL) | A$1.145 | A$2.24 | 48.9% |
| Genesis Minerals (ASX:GMD) | A$2.52 | A$4.90 | 48.6% |
| Sandfire Resources (ASX:SFR) | A$9.39 | A$16.58 | 43.4% |
Let's take a closer look at a couple of our picks from the screened companies.
Cettire
Overview: Cettire Limited operates as an online luxury goods retailer in Australia, the United States, and internationally, with a market cap of A$550.89 million.
Operations: The company generates revenue through online retail sales, amounting to A$742.26 million.
Estimated Discount To Fair Value: 49.9%
Cettire is trading at A$1.51, significantly below its estimated fair value of A$3.02, presenting a potential undervaluation based on discounted cash flow analysis. The company's earnings are projected to grow by 32% annually over the next three years, outpacing the broader Australian market's growth forecast of 12.6%. However, profit margins have decreased from 3.8% to 1.4% over the past year, which could be a concern for investors focusing on profitability improvements.
Flight Centre Travel Group
Overview: Flight Centre Travel Group Limited offers travel retailing services for both leisure and corporate clients across Australia, New Zealand, the Americas, Europe, the Middle East, Africa, Asia, and other international markets with a market cap of A$3.69 billion.
Operations: The company's revenue is primarily derived from its leisure segment, generating A$1.35 billion, and its corporate segment, contributing A$1.11 billion.