3 Stocks Estimated To Be Trading Up To 41.3% Below Intrinsic Value
editorial-team@simplywallst.com (Simply Wall St)
4 min read
In a week marked by busy earnings reports and macroeconomic data, global markets saw mixed performances with major U.S. indexes finishing mostly lower, while European markets faced pressure from geopolitical concerns and economic forecasts. Amidst this volatility, investors are increasingly on the lookout for stocks that may be undervalued relative to their intrinsic value as they navigate cautious market conditions. Identifying such stocks involves assessing companies with strong fundamentals that may not yet be fully appreciated by the market, offering potential opportunities for growth as broader economic factors stabilize.
Top 10 Undervalued Stocks Based On Cash Flows
Name
Current Price
Fair Value (Est)
Discount (Est)
Provident Financial Services (NYSE:PFS)
US$18.85
US$37.48
49.7%
Proya CosmeticsLtd (SHSE:603605)
CN¥97.24
CN¥194.47
50%
Arteche Lantegi Elkartea (BME:ART)
€6.10
€12.20
50%
Elica (BIT:ELC)
€1.725
€3.44
49.8%
Beyout Investment Group Holding Company - K.S.C. (Holding) (KWSE:BEYOUT)
Overview: Kawasaki Heavy Industries, Ltd. operates in aerospace systems, energy solutions and marine engineering, precision machinery and robotics, rolling stock, and motorcycle and engine sectors both in Japan and internationally with a market cap of ¥959.11 billion.
Operations: The company's revenue segments include Aerospace Business at ¥435.40 billion, Power Sports & Engine at ¥594.38 billion, Energy Solutions & Marine at ¥388.09 billion, Precision Machinery / Robot at ¥249.35 billion, and Vehicle at ¥196.26 billion.
Estimated Discount To Fair Value: 25%
Kawasaki Heavy Industries appears undervalued, trading 25% below its estimated fair value of ¥7635.87. Despite a volatile share price recently, the company is expected to grow earnings significantly at 22.1% annually, outpacing the JP market's 8.9%. However, debt coverage by operating cash flow is weak and profit margins have declined from last year’s 3.2% to 1.7%, raising concerns about dividend sustainability and future return on equity projections.
Overview: Johnson Health Tech. Co., Ltd. manufactures and sells sports and fitness equipment across the Americas, Europe, Asia, and other international markets with a market cap of NT$47.68 billion.
Operations: The company's revenue segments are comprised of NT$36.91 billion from Asia, NT$10.35 billion from Europe, and NT$20.94 billion from America.
Estimated Discount To Fair Value: 41.3%
Johnson Health Tech .Co. is trading at NT$157.5, significantly undervalued with an estimated fair value of NT$268.27, suggesting potential upside based on cash flows. Despite recent share price volatility and high debt levels, earnings are projected to grow 33.54% annually, surpassing the TW market's growth rate of 19.1%. Recent expansions in Vietnam could enhance revenue streams, although net income decreased in Q2 compared to last year despite higher sales figures.
Overview: Sports Gear Co., Ltd. manufactures and sells OEM footwear products across the United States, Europe, Asia, China, Taiwan, and internationally with a market cap of NT$25.58 billion.
Operations: The company generates revenue of NT$15.93 billion from its Footwear Manufacturing Business.
Estimated Discount To Fair Value: 23.4%
Sports Gear Co., Ltd. is trading at NT$130.5, undervalued relative to its estimated fair value of NT$170.38, indicating potential based on cash flows. Despite a volatile share price and a dividend not well-covered by free cash flows, earnings are projected to grow 38.1% annually, outpacing the TW market's 19.1%. Recent revenue growth and a TWD 1 billion fixed-income offering could support future financial stability and expansion efforts.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include TSE:7012 TWSE:1736 and TWSE:6768.
