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As we enter January 2025, global markets are showing signs of optimism, with U.S. stocks rebounding due to cooling inflation and strong bank earnings, while European indices rise on hopes of continued interest rate cuts. In this environment, identifying undervalued stocks becomes crucial for investors aiming to capitalize on potential market opportunities.
Top 10 Undervalued Stocks Based On Cash Flows
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Atlantic Union Bankshares (NYSE:AUB) | US$37.87 | US$75.61 | 49.9% |
| Dongsung FineTec (KOSDAQ:A033500) | ₩18390.00 | ₩36679.19 | 49.9% |
| Thai Coconut (SET:COCOCO) | THB10.80 | THB21.59 | 50% |
| Gaming Realms (AIM:GMR) | £0.36 | £0.72 | 49.9% |
| Sudarshan Chemical Industries (BSE:506655) | ₹1114.70 | ₹2219.89 | 49.8% |
| Equity Bancshares (NYSE:EQBK) | US$43.13 | US$86.04 | 49.9% |
| LifeMD (NasdaqGM:LFMD) | US$4.90 | US$9.77 | 49.8% |
| Shinko Electric Industries (TSE:6967) | ¥5879.00 | ¥11701.39 | 49.8% |
| Hd Hyundai MipoLtd (KOSE:A010620) | ₩129300.00 | ₩257307.05 | 49.7% |
| Vista Group International (NZSE:VGL) | NZ$3.19 | NZ$6.18 | 48.4% |
Let's dive into some prime choices out of the screener.
Zhende Medical
Overview: Zhende Medical Co., Ltd. focuses on the research, development, production, and sale of medical care and protective equipment in China with a market cap of CN¥5.69 billion.
Operations: Revenue Segments (in millions of CN¥):
Estimated Discount To Fair Value: 48.9%
Zhende Medical is trading at CN¥21.38, significantly below its estimated fair value of CN¥41.84, indicating it may be undervalued based on cash flows. Despite a drop in sales to CN¥3.13 billion for the nine months ending September 2024, net income increased slightly to CN¥307.46 million from the previous year, suggesting resilience in profitability. However, profit margins have decreased from 10.2% to 5.1%, which could be a concern moving forward.
West Holdings
Overview: West Holdings Corporation, along with its subsidiaries, operates in the renewable energy sector both in Japan and internationally, with a market capitalization of approximately ¥74.32 billion.
Operations: West Holdings Corporation's revenue is primarily derived from its operations in the renewable energy sector, both domestically and internationally.
Estimated Discount To Fair Value: 38.4%
West Holdings is trading at ¥1874, well below its estimated fair value of ¥3040.43, highlighting potential undervaluation based on cash flows. Revenue and earnings are projected to grow faster than the Japanese market at 12.6% and 14.9% annually, respectively. However, concerns arise as dividends are not covered by free cash flows and debt coverage by operating cash flow is inadequate. The company will report Q1 2025 results on January 14, 2025.