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As the ASX200 edges up by 0.15% to 8,474 points, investors are closely watching the IT sector's strong performance alongside a mixed landscape where Energy and Materials have seen declines. In this environment, identifying undervalued stocks can be crucial for investors looking to capitalize on potential growth opportunities within sectors that may not currently be in favor but hold long-term promise.
Top 10 Undervalued Stocks Based On Cash Flows In Australia
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Accent Group (ASX:AX1) | A$2.59 | A$4.91 | 47.3% |
| Telix Pharmaceuticals (ASX:TLX) | A$24.60 | A$43.18 | 43% |
| MLG Oz (ASX:MLG) | A$0.59 | A$1.16 | 49.3% |
| Ingenia Communities Group (ASX:INA) | A$4.85 | A$9.22 | 47.4% |
| hipages Group Holdings (ASX:HPG) | A$1.14 | A$1.98 | 42.4% |
| Millennium Services Group (ASX:MIL) | A$1.145 | A$2.24 | 48.9% |
| Vault Minerals (ASX:VAU) | A$0.355 | A$0.65 | 45.6% |
| Genesis Minerals (ASX:GMD) | A$2.63 | A$4.82 | 45.5% |
| Energy One (ASX:EOL) | A$5.75 | A$10.51 | 45.3% |
| FINEOS Corporation Holdings (ASX:FCL) | A$1.90 | A$3.76 | 49.4% |
Underneath we present a selection of stocks filtered out by our screen.
Data#3
Overview: Data#3 Limited provides information technology solutions and services across Australia, Fiji, and the Pacific Islands, with a market capitalization of A$1.15 billion.
Operations: The company's revenue segment includes a Value-Added IT Reseller and IT Solutions Provider, generating A$805.75 million.
Estimated Discount To Fair Value: 39%
Data#3 is trading at A$7.74, significantly below its estimated fair value of A$12.68, suggesting undervaluation based on cash flows. Despite a forecasted revenue growth of 33.3% per year, which outpaces the Australian market's 5.8%, earnings growth is expected to be slower than the market average. Recent board changes include Bronwyn Morris as Chair of the Audit and Risk Committee, potentially strengthening financial oversight and strategic direction for future performance improvements.
Infomedia
Overview: Infomedia Ltd is a technology company that develops and supplies electronic parts catalogues, service quoting software, and e-commerce solutions for the automotive industry worldwide, with a market cap of A$522.79 million.
Operations: The company generates revenue from its Publishing - Periodicals segment, amounting to A$140.83 million.
Estimated Discount To Fair Value: 36.8%