In This Article:
The Australian market has been flat in the last week but is up 20% over the past year, with earnings expected to grow by 12% per annum. In such an environment, identifying stocks that may be undervalued by investors can present opportunities for those looking to capitalize on potential discrepancies between a company's intrinsic value and its current market price.
Top 10 Undervalued Stocks Based On Cash Flows In Australia
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Data#3 (ASX:DTL) | A$7.25 | A$13.49 | 46.2% |
| Westgold Resources (ASX:WGX) | A$3.27 | A$6.29 | 48% |
| VEEM (ASX:VEE) | A$1.63 | A$3.22 | 49.3% |
| Telix Pharmaceuticals (ASX:TLX) | A$21.46 | A$41.58 | 48.4% |
| Ingenia Communities Group (ASX:INA) | A$4.96 | A$9.38 | 47.1% |
| Vault Minerals (ASX:VAU) | A$0.395 | A$0.79 | 49.7% |
| Millennium Services Group (ASX:MIL) | A$1.145 | A$2.24 | 48.9% |
| Megaport (ASX:MP1) | A$6.97 | A$13.48 | 48.3% |
| Genesis Minerals (ASX:GMD) | A$2.49 | A$4.81 | 48.2% |
| Energy One (ASX:EOL) | A$5.63 | A$11.09 | 49.2% |
We're going to check out a few of the best picks from our screener tool.
Codan
Overview: Codan Limited develops technology solutions for United Nations organizations, security and military groups, government departments, individuals, and small-scale miners, with a market cap of A$2.81 billion.
Operations: The company's revenue segments include Communications at A$326.91 million and Metal Detection at A$219.85 million.
Estimated Discount To Fair Value: 43.3%
Codan is trading at A$15.49, significantly below its estimated fair value of A$27.33, suggesting it may be undervalued based on cash flows. Earnings grew by 20.1% last year, and are forecast to grow 17.4% annually, outpacing the Australian market's growth rate of 12.2%. Codan was recently added to the S&P/ASX 200 Index and reported a net income increase from A$67.7 million to A$81.39 million for the fiscal year ending June 2024.
Ingenia Communities Group
Overview: Ingenia Communities Group (ASX:INA) is a prominent operator, owner, and developer of residential communities and holiday accommodations with a market cap of A$2.02 billion.
Operations: The company's revenue segments include A$134.84 million from Tourism - Ingenia Holidays, A$23.67 million from Residential - Ingenia Gardens, A$86.50 million from Residential - Lifestyle Rental, and A$205.81 million from Residential - Lifestyle Development, along with A$19.26 million generated through Fuel, Food & Beverage services.